Yahoo! has acquired Israel-based advertising startup Clarity Ray. The startup raised $500,000 about two years ago, when it was offering tools for online publishers to circumvent ad blockers, but has since shifted its focus from ad blocking to ad security and fraud detection. Yahoo! confirmed the acquisition to TechCrunch, but the terms of the deal are unknown. In a statement on its website, Clarity Ray says its vision is to make “the eco-system safe, compliant and sustainable for consumers, publishers and advertisers”. “This once-in-a-lifetime opportunity enables the mass scaling of our technology, impact and ideas to the absolute forefront of our field, while working with an amazing team who shares our passion,” the statement says. Twitter experiments A sizeable number of users are seeing tweets favorited by others in their timeline, just like retweets, in an experiment that is annoying a lot of people, according to The Next Web. Those users are also getting notifications when others follow someone new. Washington Post now inserting Amazon affiliate links into news articles The Washington Post, which is owned by Amazon founder Jeff Bezos, is now including “buy it now” buttons wedged into its online book reviews, as well as on news items and letters to the editor. The button links to related content available for purchase on Amazon. Overnight The Dow Jones Industrial Average is down 50.67 to 16,662.91. The Australian dollar is currently trading at US93 cents.
In my last article I responded to an interview in Vox with Marc Andreessen. Andreessen lamented that, in spite of a historic gold rush in technology companies, the IPO is dying in the United States due to zealous over regulation in the form of Sarbanes–Oxley, for example. As a result, the general public is missing out on the incredible gains that were experienced in the listed US technology companies of yesteryear. Yes, the regulators have gone too far and it is creating serious friction in the IPO pipeline. However I argued that perhaps the real reason that technology companies appear to Marc to be listing later and later is because, not surprisingly, the top venture capitalists are keeping these returns all for themselves. It's been a relatively recent phenomenon that US technology companies have been waiting longer and longer to go public. In the US, technology IPOs of yesteryear companies went public much earlier, with market capitalisations in the hundreds of millions of dollars instead of the tens of billions. As a result, the general public had the ability to share in the spectacular returns that technology companies can generate over time as software eats the world and industry after industry is being wholesale remapped and reshaped, with revenue growth at a speed unprecedented in history. Even though eBay's share price went up a spectacular 163% on opening day, if you bought shares on market after this rise and held on until today you'd have made over 3500%. If you bought Amazon the day after it listed, you'd be up over 27,000%. If you'd bought Microsoft at IPO in 1986, you'd be up 66,500% today and 3000% in the first eight years alone. Unfortunately for investors in the US, the general public is missing out. You only have to look at Facebook listing at $104 billion and Twitter listing at $24 billion to get a feeling for just how late these companies are going to market. So who is making all the money as the stocks go from the tens of millions of dollars in market capitalisation to the tens of billions? The answer, not surprisingly, are the venture capitalists. You can't blame them for doing so, because of course their business model is to make as much money as possible for their limited partners. There is another stock market, however, outside the US that is not subject to Sarbanes–Oxley and where technology listings are about to boom. This market is already quite a large market for equity capital issuances. In fact, as much money was raised there in the last five years as NASDAQ. The only problem from a technology company perspective is that most of the money raised there has been for resources companies. I am, of course, talking about the Australian Securities Exchange. Now let me tell you how this has all come about, and why now. There is a disaster in venture capital in Australia with only around $30 million per annum for the whole of seed stage investments, $40 million in early stage and $20m in late stage. AVCAL reports there were 16 "investments" done with this grand sum of $20 million in late stage venture capital in 2013. I am quite perplexed about how they defined "late stage" here, because the very definition of a late stage round size is usually greater than $20 million in one single investment, let alone 16. The only conclusion I can make is that these investments were triaged into bleeding zombie companies – hardly a sign of a successful late stage industry. Either that, or AVCAL has now taken up reporting of late stage investments to include lemonade stands. Atlassian, one of Australia's most successful technology companies, just raised $US150 million in a late stage round. The entire Australian venture capital industry simply isn't big enough to fund that single round. In addition to the lack of venture financing, a major terraforming of the economy is needed. Although we have $1.5 trillion dollars in the fourth largest pool of retirement funds (superannuation) in the world, these funds don't invest very much in Australian venture capital because none of the VCs to date have demonstrated that they can generate a return. It's hard to claim that venture capital is even an asset class in this country, as it's missed every single major technology success story this country has produced all the way back from Radiata: Atlassian, Kogan, Big Commerce, RetailMeNot, Campaign Monitor, OzForex. The list goes on and on. For the life of me, I can't think of one they actually invested in. The funds being invested into Australian VC come roughly equally from corporates, government and high net worth individuals. Corporate investment in VC in Australia is in decline, and with the government recently turning its tap off with the cancellation of the IIF program, I don't see a path to resurrecting a domestic venture capital industry any time within the next decade or two without a serious change in philosophy, which is not going to come from either of the two major political parties. The incumbent Liberal party is currently implementing a program of austerity, and the previous Labor government was, at best, only interested in trying to win union votes from bailing out the inefficient and dying local manufacturing sectors. The biggest impact Labor had on the sector during their tenure was to change the laws on the taxation of option schemes, which wiped out the primary incentivisation mechanism for the technology industry (and, ironically, the primary means by which wealth is redistributed from owners to workers). While I personally was not sorry to see the IIF go, I was hopeful that the axing of the program would be replaced with something more effective for financing technology companies down under. A better way would be through taxation reform for investors in qualifying risky technology ventures –front-end relief in the form of tax credits or a reduced rate of tax and back-end relief in the form of capital gains tax reductions or exemptions like the UK's Enterprise and Seed Enterprise Investment Schemes. At the end of the day, the Australian government only provided $25 million a year into the IIF program, which is paltry when you consider Singapore, with a population of 5.4 million, has committed $SG16 billion ($US12.8 billion) into scientific research and development over a four year period from 2011 to 2015. So how are Australian companies getting financed? Whilst the big US VC brands like Accel, Sequoia, Spectrum and Insight are actively prospecting down here, they are mostly just looking for cheap deals by value investing in late stage companies outside the hot money Silicon Valley market. The investments that they have made to date, and which have been trumpeted in the media, have for the most part been majority buyouts or exits (Campaign Monitor, 99designs, RetailMeNot, etc). A notable exception to this has been Accel's investment in Atlassian. However, the lack of funding has not deterred Australia's entrepreneurs from building world class technology companies. Instead, they have focused on raising funds from the best source possible: selling something valuable to their customers. This story continues on page 2. Please click below. Almost all of Australia's best technology companies have bootstrapped all the way through. Those that did take outside funding, for the most part, didn't take it until they reached quite a late stage. As a result, we have some very well run technology companies, and some world class companies in the making. Although I am pretty active in the startup community, every second week I am shocked to discover yet another Australian technology company that I have never heard of generating $10 million, $20 million, $50 million or more in revenue per annum. Until recently, I had never heard of companies like RedBubble, Nitro, and Pepperstone. The latter of which has, in just three years, become the 11th biggest forex broker in the world, turning over $70 billion a month through their online platform). Because the Australian technology industry is mostly bootstrapped, it took longer to get here, but coming down the pipeline are an incredible number of great technology companies. So if the Australian VC industry is dead, then how are these great companies going to raise funds when they need them? Well, I believe the answer is staring them right in the face. It's called the Australian Securities Exchange (ASX). After all, what better way to fund a company than by crowdsourcing it? This is what the resources industry already does today, via the ASX. If you have an early stage speculative mining company, you don't go begging down Coal Hill Road pitching to mining VCs and spending six months negotiating a telephone directory thick preferred stock structure. No, you write a prospectus detailing what you're going to do with the money and list it on the ASX. Likewise if you're BHP or Rio Tinto, you can go to the ASX and the market is deep enough to raise billions. Crowd sourcing equity from the public has been done successfully for decades in resources. The ASX is in the top five globally for the total amount of money raised for equity issuances from 2009-13. There is no Sarbanes–Oxley in Australia, and listing costs are quite low. (In Freelancer's IPO, the underwriting fees were $450,000, legal fees were around $100,000, and investigating accountants cost about $50,000.) Why go to a venture capital middleman unless they are a rockstar with solid operating experience that can add demonstrable value in some way? I believe that Malcolm Turnbull will bring in legislation to allow the general public to crowdfund early stage ventures without a registered offering document, as is starting to happen elsewhere around the world. This will generate further interest and appetite in investing in technology companies from the general public which already actively takes a punt on speculative, early-stage mining companies (not to mention the Melbourne Cup). At the moment, to invest in companies without a registered offering document you need to be a "sophisticated investor", which is curiously defined as a person having income of $250,000 per annum in each of the last two years, or net assets of $2.5 million. I don't know why being rich makes you automatically sophisticated, and being poor means you’re incompetent with your money, but I'm sure that something sensible will happen here. If, by miracle, we see some taxation relief for technology investments, then this will be accelerated. But I'm not holding my breath, even though the Australian government used to provide some form of taxation relief for investors in the mining industry. When we were considering listing Freelancer on the ASX, many people gave us the usual regurgitated responses as to why it wouldn't work; investors here don't understand technology and that we would trade at a discount compared to US markets. Professor George Foster from Stanford Graduate School of Business showed some time ago that country specific factors were a lot less important than company-specific financial statement-based information in explaining valuation multiples in an international setting. Markets are increasingly globalised. It's almost as easy for a US investor to buy Australian shares as US ones. Money flows to where it gets the greatest return for a given risk profile; basically if arbitrage exists, someone will take it. Our stock going to $2.50 from a 50 cent issue price in the biggest opening in the last 14 years and third biggest opening ever on the ASX for an issuance larger than seed size is testament to the amount of pent up interest amongst the general public to invest in technology. We took a calculated risk – nobody wants to be the first to try something new. But so far it has paid off. It’s great to see the sector now heating up with recent listings from companies like Ozforex, iSelect, iBuy and MigMe (up 95% yesterday on their IPO, and like I did, broke the bell), and with WiseTech Global, Vista Group, 1-page, Covata, BPS Technology, Grays Australia imminently coming down the pipeline. I suspect Ruslan Kogan will also be considering his options given the tremendous effort he has done bootstrapping Kogan to date. What surprised me is that the process was significantly easier, quicker and resulted in a more equitable and transparent capital structure than what I have experienced in any of the dozen venture capital financings I have been involved with in the past. Projecting forward, I think that the ASX will be the primary way in which technology companies raise equity in this country in the future. The ASX realises this as well, and is moving to position itself as a regional hub for the Asian technology sector. If it is successful—and I think there is a good chance it will be—it will cover a massive market. There are significantly more people in Asia (with dramatically rising incomes), significantly more micro, small, and medium enterprises (MSMEs). It’s a much bigger market for many industries, and there are a lot more mobile phones than the US, to draw comparison to just a few metrics. The ASX is in a fantastic position to capture this opportunity. In the second half of 2013 a total of 14 technology companies listed on the ASX. Since January 2014 there has been 55. In the entirety of 2013, a total of 59 companies were financed by Australian venture capital. This is the future for financing technology companies in Australia. Matt Barrie is chief executive at Freelancer.com
ThemeForest, owned by Melbourne-based tech company Envato, is now among the top 100 websites in the world in terms of traffic, according to the latest Alexa rankings. According to the rankings, compiled by the Amazon-owned analytics firm, ThemeForest is currently the 93rd most popular website on the planet, as well as the most popular Australian-owned website. The website also appeals to an international audience, with 17% of its visitors from the United States and 13.9% from India, with significant audiences in Brazil (3.9%), the UK (3.8%) and Germany (3.8%), according to Alexa. Envato’s director of strategy and business development, Ben Chan, told Private Media getting the website onto the top 100 list was not the product of any particular deliberate SEO or social media strategy. “We’re pretty excited about that – it really crept up on us. Our mission is to help our community to earn and learn, rather than to be in the top 100 listings,” Chan says. ThemeForest is one of eight marketplaces owned by Envato, spanning both media templates and what it terms “complex content”, including themes and HTML templates. Launched in 2008, ThemeForest primarily focuses on WordPress themes, and sits among the company’s “complex content” marketplaces. “Envato started out in 2006, and since then we’ve paid our community of designers, authors, freelancers, affiliates and instructors more than $180 million in earnings,” he says. Looking to the future, Chan identifies expanding Envato’s lead in complex content marketplace, as well as further expanding its multimedia portfolio. Follow StartupSmart on Facebook, Twitter, and LinkedIn
After two years development and having already raised $3 million in funding, Sydney-based e-commerce startup Alphatise has launched. Alphatise’s smartphone and web-based app allows consumers to request a product they want, indicate how much they’re willing to pay for it, and then gives sellers the opportunity to match that deal. If 10 people want to buy a TV for $800, sellers can offer all 10 that deal, or give it to the first five. Sellers are charged a 4% fee of the product price to access Alphatise consumers. The startup was founded by friends Paul Pearson, Richard Frey and Ben Nowlan, who says it has the potential to be a powerful platform. “What you’re getting is an e-commerce platform that allows you to buy what you want and have a say in what you pay,” Nowlan says. “Putting the consumer in the driver’s seat becomes an exciting prospect. “From a seller perspective, we’ve become fairly disruptive from that side as well. They can actually see customer demand, and we move away a lot of the noise from the market.” The startup counts eBay and Amazon among its competitors, which Nowlan says are basically all companies operating in the online retail space. One more direct competitor is Greentoe, a US startup out of Y Combinator which launched recently and offers a similar service. Greentoe shows its users an average price for the product they’re after from a bunch of vetted online retailers, and allows them to say what they’re willing to pay, and sellers can accept that price. Alphatise’s launch marks the first time customers get a chance to use the product, Nowlan says. Because the platform needs to be large it wasn’t possible to offer it as an MVP, although he says in many ways that’s how the platform will be treated in the weeks and months after launch. That’s not to say the Alphatise team didn’t have an MVP, theirs was just the absolute minimum. Alphatise’s MVP was essentially a bit of paper, Nowlan says. They polled various people by showing them a grid of products and getting them to tick the ones that they wanted and write down the price they would pay to buy it right then and there. “We found consumers would often put down they would buy the product now if it was within a 0-15% price variable,” Nowlan says. Armed with this research the team were able to approach investors and secure investment. Since beginning in 2012 the company has raised $3 million in funding and plans to open a Series A round in the coming months. For the platform to really thrive it needs a large user base and Nowlan says that is the biggest challenge for the startup moving forward. With that in mind, the startup is aiming for 100,000 Australian users by December. “We fully acknowledge that’s our biggest challenge, getting the demand and getting the businesses to meet that demand. “(Then) you’ll be able to create a wish for something and set the price, and have that demand met in minutes. Once we do that it becomes a different game. “We have ambitious goals, but that’s exactly what Australian startups need to do to be successful.”
Publishing startup Tablo, which recently secured $400,000 of funding and aims to make publishing e-books as easy as writing a blog, has launched new features to encourage collaboration amongst authors. According to the Melbourne-based startup, the developments are part of a “wider effort to transform the writer from a solitary character into a social one.” Branding it a “unique social network” the features will enable authors to create their own individual profiles – complete with a biography, photo and previous or upcoming works – and to share their writing with others in the online community. In turn, followers can browse the ‘bookshelf’ of their favourite authors, receive updates on new chapters as they are written, and become part of the creative journey. Bringing social elements to writing has proven successful for shorter-form online publishing platforms like Medium, but the community apect for writers is fairly well-covered by like Wattpad and Cowbird. However, the demand for the new features was quite organic. After Tablo built a tool for Nanowrimo (a popular event where authors attempt to write a book in 30 days) it found that authors were sharing their progress and using the opportunity to build their following. The 21-year-old entrepreneur behind Tablo, Ash Davies (who previously tried to self-publish a book and found the process lengthy and costly), told StartupSmart it was this that inspired him to build the social tools. “Writing has traditionally been seen as a lonely endeavour,” Davies says. “This, combined with the sad reality that the vast majority of authors struggle to see their work ever published, means that countless pages of writing from talented individuals, are never shared or read by others. Tablo is changing that. “Publishing a book in 2014 should not be the same as it was in 1914. Yes, authors still put words onto a page (whether digital or paper), but an ambitious or talented writer shouldn’t need a huge publishing deal to ensure their words are read. With our new social features, readers can discover and follow authors from day one. This will help authors secure and grow a loyal readership.” While Tablo’s offering is unique in the way it allows authors to publish and distribute their books through the iBook Store and Amazon, there have been a number of startups that have had similar ambitions to upend e-publishing and empower authors, with mixed results. Byliner is probably the most well-known and also incorporates social elements so that readers can follow their favourite authors. It’s monetised through a shared revenue of content sales with authors, but appears to be in trouble having recently notified its users by email that it has “struggled to reach the level of growth we’d been hoping for the business, and thus we’ve begun conversations with possible partners about the future of Byliner.” There have also been some questions about how much authors actually received. Creatavist (which powers the monthly publication Ativist) is another platform bringing the seamless e-publishing experience to authors, but it doesn’t offer the ability for distribution. Tablo authors receive 100% of royalties, but those who want to publish on the iBooks Store and Amazon need to subscribe, which starts at $7.95 per month. Davies would not confirm how much top authors were receiving specifically, but indicated the range for author's potential earnings is between $100 and $10,000 per year. Whether the new features can further promote the authors and increase that revenue remains to be seen. Interestingly, John Buck, one of the top authors on the platform, reinvested the money he made through Tablo into the startup during its recent funding round.
Twitter stocks have surged by almost 30% in after-hours trading following the announcement of its second quarter financial performance, which included revenue of $312 million and $0.02 earnings per share. The figures beat analysts’ estimates, with Wall Street expecting Twitter to post revenue of $283.07 million and losses of $0.01 per share. Its revenue for the quarter is up 124% from the same period a year ago. Eighty-one per cent of revenue in the period came from mobile advertising. Its average monthly active users (MAUs) increased by 24% year-over-year, to 271 million, while Mobile MAUs reached 211 million, an increase of 29% year-over-year and made up 78% of the company’s total MAUs. Twitter chief executive officer Dick Costolo says the strong financial and operating results show the company’s continued momentum. “We remain focused on driving user growth and engagement, and by developing new product experiences, like the one we built around the World Cup, we believe we can extend Twitter’s appeal to an ever broader audience.” New Microsoft Windows phones arriving soon Microsoft is planning to launch two new Windows 8.1 devices shortly, The Verge reports. Sources told The Verge that Microsoft Devices chief Stephen Elop revealed the two handsets, a “selfie phone” and an “affordable high-end phone” at an internal company meeting this week. E-commerce company Jet raises $55 million Marc Lore, the former CEO of Diapers.com parent company Quidsi, which was sold to Amazon for $550 million, has raised $55 million to build out a new e-commerce company called Jet, Re/code reports. Little is known about what Jet plans on selling, but sources tell Re/code that the startup will be extremely tech focused and is working on innovating around its logistics network. Overnight The Dow Jones Industrial Average is 16,912.11 down 70.48. The Australia dollar is currently trading at US94 cents.
Amazon is reportedly set to launch its own mobile credit card reading technology, according to internal documents from the office supply store Staples, obtained by 9to5mac. The documents say Staples stores are preparing to stock a new product called the “Amazon Card Reader” alongside existing card readers from Square, PayPal, and Staples’ in-house brand. Amazon recently launched a new wallet app for smartphones and 9to5mac speculates that Amazon’s card reader will likely connect to that. Rocket Internet’s Easy Taxi raises $40 million Easy Taxi, a taxi calling app from Rocket Internet, has raised $40 million in a Series D funding round. The company launched in 2011 and has roughly 185,000 drivers, with 150,000 of those added over the past year. It’s available in 160 cities across 30 countries predominantly in Latin America, Africa, the Middle East and Asia. Easy Taxi co-CEO Dennis Wang says the funding will allow the startup to continue its growth in existing markets, while also scaling its operations and improving its service so as to appeal to “more audiences and geographies”. US cable companies say Google and Netflix biggest threat to net neutrality In a filing to the US Federal Communications Commission, Time Warner Cable claimed that the controversy over internet providers potentially charging websites for access to “fast lanes” on the internet is a “red herring”. It says the real danger is that Google or Netflix could start demanding payments from internet providers, as customers expect access to the most popular websites, an internet provider would have no choice but to pay. The National Cable and Telecommunications Association says a relatively connected group of large internet companies such as Google, Netflix, Microsoft, Apple, Amazon and Facebook have enormous and growing power over people’s ability to access what they want on the net.
The federal government has tabled an inquiry into the use of drones and other remotely piloted aircraft (RPAs), raising concerns about privacy and other issues. The Eyes in the sky report comes as interest in the technology grows, with companies such as Amazon and an Australian startup called Flirtey planning to use the technology to deliver products. The report notes that current regulations, maintained by the Civil Aviation and Safety Authority (CASA) covering the commercial use of RPAs are aimed at maintaining air safety and minimising the risk of a serious crash. Unfortunately, many people experimenting with the technology are unaware of the regulations currently governing their use. “Recent improvements in RPA piloting and control technologies, combined with drastic reductions in price have led to a substantial increase in the number of RPAs sold, both to consumers and potential business operators,” the report states. “The Committee has heard that this has led to a large increase in the number of untrained RPA operators, many of whom are either unaware of, or do not follow, CASA’s regulations. This presents a substantial risk to air safety.” The report notes interest in the technology is growing across a number of industries, including emergency services, law enforcement, agriculture, media and scientific research, as well as among hobbyists. Two key concerns raised in the report include the reliability of hobbyist drones, as well as the privacy issues they raise. “RPAs are an emerging technology and have not yet achieved the reliability expected of mature technologies,” the report states. “The capacity of RPAs to enter private property, to travel unnoticed, and to record images and sounds, which can be streamed live, creates significant opportunities for privacy breaches.” The chief operating officer of commercial RPA operator Solutions Australia, Mat Tubb, told Private Media that, contrary to popular misconception, the commercial use of drones in Australia is already regulated. “People who operate unmanned aircraft have to go through a very rigorous licencing process. It’s similar to getting a pilot’s licence,” he said. For its part, CASA has created a guide outlining the differences between commercial RPAs and model aircraft. Private Media contacted CASA for this story, but received no response prior to publication. Image credit: Flickr/minhocos
Anonymous messaging app Secret has raised $25 million from a group of investors led by Index Ventures. Sources tell the Wall Street Journal investors now value the company at $100 million. It follows a valuation of $40 million just four months ago. Secret was founded just nine months ago in San Francisco and it is likely among the fastest of any startup to reach a nine-figure valuation. LinkedIn acquires Newsle LinkedIn has announced it has acquired Newsle, a service that lets users important their contacts from Facebook or LinkedIn and scans the web to alert them whether anyone in their network has been mentioned on the web. In a post on LinkedIn’s blog, the company says LinkedIn and Newsle share a common goal. “We both want to provide professional insights that make you better at what you do,” it says. “For example, knowing more about the people in your network – like when they’re mentioned in the news – can surface relevant insights that help you hit your next meeting with them out of the park.” Google X director joins Amazon Babak Parviz, Google X director and founder of the Google Glass and contact lens projects at the tech giant has left the company to join Amazon.
Ash Davies wants to make publishing e-books as easy as publishing blogs. In 2012 he founded Tablo, a cloud-based e-book publishing platform that has just secured $400,000 in seed funding. Tablo’s platform allows authors and readers to create, share and discover new e-books. “A lot of people think that, because publishing has gone digital, that it’s simple,” Davies says. “It’s still incredibly complicated and expensive though, and it’s even harder for an author to have their work discovered. “We’ve built the best publishing tool in the world, where publishing a book to major bookstores is as easy as publishing a blog. “Authors can drop in a document or write in the cloud and reach the iBooks Store or Amazon with a single click.” Lead investor and former CEO of the Catch Group, Paul Reining, has joined Tablo as a director and adviser, while other investors include Y Combinator partner Kevin Hale, and one of Tablo’s most successful authors, John Buck. Davies says the advantage Tablo has over traditional publishing methods is the service allows authors to build an audience as they write, by releasing parts of their book as they work on it. “Traditionally authors write solitarily for months and years before submitting to publishers,” he says. “Tablo empowers authors to connect with readers while they write their book.” The advantage of that share-as-you-write approach, Davies says, is that by the time the book is finished, it already has a following. “We have a number of successful authors on the platform, and the key point of difference is we help that author build their readership as they write their book. “The next bestseller can be discovered before it’s been published. “As opposed to traditional publishing where an author will work very hard for a long time and then publish to an empty audience.” Since going live roughly 12 months ago, Tablo has built a community of 10,000 authors from 100 different countries. It offers a ‘freemium’ based subscription model. It costs nothing to create and share books, but authors who want to publish on the iBooks Store and Amazon need to subscribe, which starts at $7.95 per month. Authors receive 100% of the royalties, once Apple and Amazon take their commissions. The startup is a graduate of the AngelCube accelerator program and he says the program had a big role in making the funding round possible. “As a new entrepreneur it was never going to be easy,” Davies says. “But going through AngelCube and working with their network made it easier and at the core of it we have a great product.”
10 massive announcements from Google I/O: A new version of Android is coming for cars, smartwatches and TVs6:48AM | Thursday, 26 June
Google’s head of Android, Sundar Pichai, delivered a keynote speech overnight to the tech giant’s annual developer conference, Google I/O. In terms of big announcements, he didn’t disappoint, with key points including a new version of Android – called Android L – that will work with smart cars, wearables and TVs. For small businesses, a major piece of news is Google Drive for Work, a new cloud computing product set to go head-to-head with Microsoft’s Office 365 and OneDrive. The new product will cost businesses just $US10 per user per month, and allow them to access unlimited storage. Where Microsoft bumped its storage limits to one terabyte earlier this week, Google will allow individual files of up to five terabytes in size. Meanwhile, Google Docs, Sheets and Slides are now able to create or save Microsoft Office files in both Android and Chrome Browser, with support coming soon to iOS. Here are 10 other massive announcements from the Google I/O keynote: 1. Android is absolutely hammering Apple in the marketplace Sorry Apple fans, but the iPhone has well and truly been left in the dust. According to figures read out during Pichai’s keynote, the number of users to have actively used an Android smartphone in the past 30 days has grown to over a billion. This is up from 77 million in 2011, 233 million in 2012, and 538 million last year. But it’s not just in smartphones that Apple is being left behind. Google revealed that in 2012, 39% of all tablets ran Android, growing to 49% last year. This year, that has grown to 62%. In even worse news for the iPad, those figures exclude non-Google Android devices such as Amazon’s Kindle. As if Google needed to stick the boot in to Apple further, Pichai told the conference: “If you look at what other platforms are getting now, many of these things came to Android four, maybe five years ago.” The quote was a reference to a number of features, such as maps, text prediction, cloud services, widgets and support for custom keyboards, which have long been features of Android since around version 1.5, but have only recently been added to iOS. 2. Android L, with a new app platform and interface The biggest news out of the conference was, of course, the newest version of Android, codenamed “Android L”. The latest version is designed to power a range of new devices, including wearables, cars and TVs. The assumption will be that while users will always carry their mobile around with them, they are increasingly likely to be simultaneously using a second device. Cosmetically, the new version will be built around a new, “flat” design language called “Material”, which bears a slight resemblance to Microsoft’s tile interface. The new interface will be carried through Google’s mobile apps, including its Chrome web browser. However, the biggest changes are under the hood, with Android L getting upgraded to 64-bit. It also adds BlackBerry-style containerisation separating work and personal apps. Meanwhile Dalvik, the app runtime environment used in Android, is getting dumped in favour of the new Android Runtime Environment (ART). For most developers, the change will mean better performance with no need to change their code. ART is also truly-platform, meaning developers will be able to write apps once and deploy them to devices running Intel x86, ARM or MIPS processors. Android L will be available to developers starting from today. 3. Android Wear One of the big growth areas for mobile device makers is in wearables. Google has developed a platform for these devices, known as Android Wear, which it demonstrated at the conference. “Android Wear supports both round and square displays, because we think there will be a wide array of fashionable choices,” said Pichai. As many have predicted, notification cards and Google Now integration are key features of its wearables platform. LG has made its first Android Wear device, the LG G Watch, available for pre-order, while Samsung is releasing a version of its Gear smartwatches that runs Android Wear, known as “Samsung Gear Live”. Meanwhile, Motorola’s smartwatch, with a round clockface, will be available later this year. For developers, Google has made a software development kit (SDK) available allowing for customer user interfaces, support for voice actions, and transferring data to or from a smartphone or tablet. This article continues on Page 2. Please click below. 4. Android Auto Google has also released its smart car platform, known as Android Auto. Google says it has now signed up 25 major auto makers to the platform, including Ford, Honda, Hyundai, Chrysler, Chevrolet, Volvo, Volkswagen, Kia, Renault, Mitsubishi, Subaru, Skoda, Jeep, Suzuki and Nissan. Android Auto will be able to be driven by voice commands, and is designed to make app development for cars as simple as developing apps for smartphones and tablets. Again, for developers, Google has released an SDK allowing for car and auto apps. Key focuses for the platform are navigation (Google Maps), communications (both audio and messaging) and streaming audio services. Android Auto also contains a screen that displays notification cards in real time. 5. Android TV Google’s new smart TV platform, announced during the keynote, is known as Android TV. It can be used to power a range of different devices, from smart TVs to set-top-boxes and dedicated streaming sticks. Android TV allows the user to use their smartphone, tablet or smartwatch as a voice-powered remote control for their TV. Android TV devices will include all the functionality of ChromeCast, but also add the ability of directly running apps directly. 6. ChromeCast Speaking of things TV related, Google says its low-cost ChromeCast sticks are currently outselling every other streaming device combined. New capabilities coming to the sticks include a new section on the Google Play app store for apps designed with added ChromeCast capabilities. ChromeCast owners will soon be able to mirror the screen of their Android smartphone or tablet wirelessly on their TV screen. Users will also soon get the capability of sending content to a ChromeCast device by logging in with a PIN, even if they aren’t on the same WiFi network. Another new feature is that users will be able to set a picture or photo as a wallpaper on their ChromeCast for when they’re not using the device. 7. Android L integration with ChromeBooks Up until now, Google has maintained two separate operating systems: Android for smartphones and tablets, and Chrome OS for its ChromeBook series of laptops. A massive update for Android L is that ChromeBooks will now be able to run Android apps. Meanwhile, apps running on a users’ tablet or smartphone will be mirrored on the screen of their ChromeBook device. 8. Google Fit At Apple’s WWDC, the introduction of a health framework was one of the largest announcements. Given the sheer volume of announcements at Google I/O, the introduction of Google Fit is almost an afterthought. Basically, like Apple HealthKit, Google Fit is a single set of APIs that blends data from multiple apps and devices to create a comprehensive picture of a users’ health. Google is promising a developer preview of Google Fit in the next few weeks. 9. Google Play Already, I’ve noted one big upgrade to Google Play, namely the addition of a section dedicated to apps with ChromeCast playback. Presumably, there will be similar sections dedicated to Android Wear and Android Auto. But there are other changes afoot for Google’s Play download store. First, Google says that it has paid out $US5 billion to app developers over the past year, which is two-and-a-half times higher than a year earlier. Second, Google also announced the takeover of a startup called Appurify, which will provide automation services for apps being developed either for Google Play and Android or iOS. And thirdly, for those interested in games, Google Play is adding the ability to save a snapshot of your progress in a game to the cloud, as well as special quests for games. 10. Cloud tools and services Last, but certainly not least, Google has added a range of new cloud tools and services. These include Cloud Monitoring, which provides a dashboard with real time metrics for apps running in Google’s cloud services. A second, called Cloud Dataflow, is a data pipeline service similar to Amazon’s Data Pipeline. And a third, called Cloud Debugger, allows developers to more easily trace slowdowns in cloud-based apps. This article first appeared on Smart Company.
Amazon, the e-commerce internet giant, is launching its first smartphone. Media attention is focusing on whether the phone’s features, such as its rumoured 3D interface, are really as cool as portrayed in its trailer video which aims to wow early users. But by entering into the fray of an already hyper-competitive mobile phone industry, Amazon is doing a lot more than adding another gee-whizz feature to a smartphone. This launch tells us a great deal about CEO Jeff Bezos' strategy for his company – and what it might mean for the future of competition and innovation in our increasingly digital world. First, let’s ask the obvious questions. Why is Amazon, known for internet retailing and related software development, entering a hardware market where leading incumbents like Nokia have already failed? After all, what does Amazon know about the telecoms business? Can it succeed where Google has failed? We have seen Google, which has virtually limitless financial resources, enter the mobile phone handset industry by purchasing Motorola Mobile in 2012, only to take a heavy loss after selling it on less than two years later. Even incumbent firms who had a very strong set of phone-making capabilities have taken tough hits in this turbulent market – witness Nokia’s dramatic plunge, which led to a sale of its mobile phone business to Microsoft. Platform Number 1 You cannot understand Amazon’s move without situating it in the broader context of platform competition. Platforms, these fundamental technologies such as Google search, Facebook and the Apple iPhone, are the building blocks of our digital economy. They act as a foundation on top of which thousands of innovators worldwide develop complementary products and services and facilitate transactions between increasingly larger networks of users, buyers and sellers. Platform competition is the name of the game in hi-tech industries today. The top-valued digital companies in the world (Amazon, Apple, Google, Facebook) are all aggressively pursuing platform strategies. App developers and other producers of complementary services or products provide the armies that sustain the vibrancy and competitiveness of these platforms by adding their products to them. The more users a platform has, the more these innovators will be attracted to developing for them. The more complements available, the more valuable the platform becomes to users. It is these virtuous cycles – positive feedback loops, or “network effects” – that fuel the growth of platforms and transform them into formidable engines of growth for the companies and developers associated with them. The smartphone is a crucial digital platform. Achieving platform leader status in this space is a competitive position all the hi-tech giants are fighting for. Google has its ubiquitous Android operating system, Apple has shaped the whole market with the iPhone, Microsoft has purchased Nokia’s phone business, and Facebook has invested $19 billion in WhatsApp among other acquisitions for its growing platform. In fact, I suppose I should have rephrased my question a little earlier – why hasn’t Amazon already staked its claim to lead this digital space after having launched its Kindle Fire tablet and Fire TV set-top box? Opening the door Simply put, the smartphone is the main gateway to the internet today, and, in the hand of billions of users throughout the world, is the physical embodiment of a conduit that links those users to each other and to the whole content of the internet. There are almost 7 billion mobile phones in the world (and only 1 billion bank accounts). And the trend is staggering. Mobile payment transaction value surpassed $235 billion worldwide in 2013, and is growing at 40% a year, with the share of mobile transactions already reaching 20% of all worldwide transactions. So, while risky, Amazon’s entry into the smartphone business is a classic play: a platform leader entering an adjacent platform market that is also complementary to its primary business. All platform leaders aim to stimulate complementary innovation (think how video game console makers aim to stimulate the provision of videogames), and they often attempt not to compete too much with their complementors in order to preserve innovation incentives. But at some point all platform leaders start to enter these complementary markets themselves. Google has done it through Android, Apple has done it with iTunes, Facebook has done it with Facebook Home. It happens when platform leaders feel threatened by competition in their core market, or when they want to steer demand, competition and innovation in a particular direction. The idea is to use their own user base as well as their own content and technologies to create an unassailable bundle, one that is difficult for external competitors to break into. Think of it as creating barriers to entry, while expanding the core market. The reasoning behind entering a complementary market is well known, and related to the benefits of bundling. In the case of hi-tech platforms, the benefits are even stronger. By optimising and controlling the interface between a platform and complements, a company can have a structuring impact on the evolution of the platform ecosystem – and that means on all the innovators around the world that invest and make efforts to develop complementary products and services. In your hands So, these are the reasons why Amazon is entering the mobile phone market, despite the difficulties inherent in taking on an über-competitive market. This strategic choice makes a lot of sense. As to whether Amazon has a fighting chance of succeeding, there are reasons to be optimistic. Beyond its deep financial resources, Amazon has learned something of what it takes in the development and successful commercialisation of various versions of the Kindle. That has given it expertise in hardware, on top of its software background, and should prove a useful training ground to allow it to launch other consumer products such as the smartphone. But the ultimate judge will be you, gentle readers. Will you be willing to swap your favourite mobile phone for a yet another new kid on the block, even if it does let you browse Amazon’s ever-growing catalogue in splendid 3D? Annabelle Gawer is Associate Professor in Strategy and Innovation at Imperial College Business School. This story was originally published at The Conversation. Read the
Amazon has unveiled its long awaited smartphone – Fire. Features include Dynamic Perspective and Firefly, which the company is describing as breakthrough innovations that “let you see and interact with the world through a whole new lens”. Dynamic perspective uses a new sensor system to respond to the way you hold, view and move Fire. Firefly quickly recognises things in the real world – web and email addresses, phone numbers, QR and bar codes, music, movies, and millions of products which can be added to your Amazon shopping cart. It has a Quad-core Qualcomm Snapdragon 2.2 GHz processor, 4.7 inch HD display and is set to be released on July 25. Canadian court orders Google to block websites worldwide The Canadian Supreme Court has issued a temporary injunction which requires Google to block a group of websites from its search engine. The decision came despite arguments from Google’s lawyers that the Canadian courts did not have jurisdiction to make such an order. App that just says ‘Yo’ raises $1 million in investment The app, which took eight hours to build, allows users to send the word ‘Yo’ to their friends. Founder Or Arbel says the app deals with “context-based communications”. The app, which was released on April Fools’ Day this year, has raised $1 million in investment and has over 50,000 users, according to ThinkProgress. Overnight The Dow Jones Industrial Average is up 98.13 to 16,906.62. The Australian dollar is currently trading at US94 cents.
According to SEEK co-founder and Square Peg chief executive Paul Bassat, payments are the “holy grail of innovation”. He made the comment at The Australian Financial Review and Macquarie Future Forum on Tuesday, where some of Australia’s leading entrepreneurs declared the industry ripe for disruption. Despite banks in Australia being protected by complicated regulations, entrepreneurs are placing the industry under increasing pressure. Adding to banking woes are the likes of Google, Amazon, Apple and Facebook eyeing entry to the payments market. Here are the top four Australian disruptive financial services startups to watch: 1. Society One Society One is Australia's leading peer-to-peer lending platform, with a $5 million investment from Westpac’s Reinventure Group, a $50 million fund set up to back early stage startups. It’s rumored to be on the investment radar of both James Packer and Lachlan Murdoch. Borrowers list loan requirements and investors decide which loans they choose, how much to invest in each loan, and the rate at which you want to earn their interest. Its personal loan rate for a prime borrower is 9.80% pa, 5% lower than the average rate from the major banks. 2. Tyro Payments Tyro provides credit, debit and EFTPOS card acquiring services and does not take money on deposit. It was founded in 2003 by ex-Cisco employees Peter Haig, Andrew Rothwell and Paul Wood as MoneySwitch Ltd. Eleven-year-old Tyro is in its second year of profitable business operations. Disrupting the Australian banking industry was never going to be easy, and it took the team over $30 million in capital and a founder break-up to get there. At launch it was the first new entrant into the eftpos space in 15 years. 3. Pin Payments Pin Payments is an Australian-based startup operating from Melbourne and Perth that offers onsite payments and a developer API without the need for a merchant account. It received a grant from Commercialisation Australia and partnered with some of the Australian banks to make its offering possible. Both overseas-based Braintree and Stripe operate in the same space, but Pin has a solid local focus. Getting access to a payment system has previously been a juggle for companies, especially early stage ones. Pin Payments is aimed at developers who can easily integrate its service through their API. 4. CoinJar CoinJar, a Melbourne-based bitcoin exchange and payment system, which has raised $500,000 in seed funding from a range of individual investors and the Blackbird Ventures seed fund. Launched in February by Asher Tan and Ryan Zhou, CoinJar has over 10,000 active users in Australia. The company charges a low single-digit percentage fee for each transaction. CoinJar was the first company to get its Bitcoin app re-listed in the iPhone App Store, after Apple revised its app guidelines to include virtual currency apps that it previously excluded.
Thousands of black cab drivers in London have protested against technology-enabled taxi services such as Uber. They are upset that Uber allows its users to call a cab with their mobile phone and the fare is worked out using a mobile phone and GPS. Cabbies compare this to a taximeter, which legally only black cabs are allowed to use in London. The protests come just as Uber launches UberTAXI in London, which is open for black-taxi drivers to use unlike its uberX, EXEC and LUX services. Amazon has another supplier confrontation Amazon is refusing to sell upcoming Warner Home Video features as part of its effort to gain leverage in a confrontation with a supplier. In a standoff with Hachette Book Group, Amazon is refusing to take advance orders and delaying shipments. The two are currently negotiating e-book terms. Apple tax schemes under investigation European authorities have launched a probe into whether Apple’s corporate income tax arrangements in Ireland are legal, or whether they qualify as unlawful state aid. Ireland is the base of choice for many large tech companies’ international operations because of a low corporate tax rate and other favourable laws. Overnight The Dow Jones Industrial Average is down 102.04 to 16,853.88. The Australian dollar is currently trading at US94 cents.
Amazon plans to launch a marketplace for local services – a term which encompasses anything from babysitters to tradespeople, according to a Reuters report. The e-commerce giant will gauge demand and test logistics before beginning the expansion of the service, much like the way it launched its grocery delivery service Amazon Fresh, which was initially tested in Seattle before expanding to San Francisco and Los Angeles. Google acquires Skybox Imaging Google has paid $500 million in cash for Skybox Imaging, a company that provides high-resolution photos using satellites. In a statement announcing the acquisition, Google says Skybox’s satellites will help keep Google Maps accurate with up-to-date imagery. “Over time, we also hope that Skybox’s team and technology will be able to help improve internet access and disaster relief – areas Google has long been interested in,” the statement says. About.me raises $11 million About.me, the startup that enables its users to create a simple page where you can find information about them online, has announced it has raised $11 million. The company says it will use the money to invest in new features and to make its platform easier to use. Overnight The Dow Jones Industrial Average is up 2.82 to 16,945.92. The Australian dollar is currently trading at US94 cents.
Amazon’s move to patent the process of taking a picture of an object against a white background makes Australian startup Pixc stronger, according to founder Holly Cardew. Pixc is a web-based service aimed at online retailers that photoshops the background out of pictures and replaces it with a white background, within 24 hours for a small fee. Amazon recently made waves when it applied for and received the patent, which details a process using a camera and lighting and a particular studio arrangement in order to take a picture of an object against a white background. The patent includes a work flow chart that describes the process as follows: start, activate rear light source, activate front light source, position subject on elevated platform, initiate capture, end. “It shows how serious Amazon take their white backgrounds,’’ Cardew says. “This shows both to our customers and investors that white backgrounds are the key to selling a product online.” The decision to grant Amazon the patent had been widely mocked and some have gone so far as to call it the silliest patent ever awarded. “I think if you have the money and the right lawyers anything is possible, unfortunately,’’ Cardew says. “I am curious how they are going to enforce this as photographers have been using this technique for years. “The photographers are the ones who should be concerned as they will have to do more post photo editing, which means that companies like Pixc are even more relevant.” Cardew says Pixc doesn’t own a patent on the process it uses to produce its images of objects on a white background and she points out the structural advantages that behemoth’s like Amazon enjoy. “I wouldn’t get a patent unless I knew I had the funds or lawyers to fight it,’’ she says. “It can cost a lot to get a patent but unless you can enforce it, it is worthless.” Pixc is part of the Telstra backed muru-D accelerator program and Cardew is in the United States on a visit organised by the program where they are hoping to gain exposure to the US market.
Amazon is giving English and American customers the chance to shop without leaving Twitter. The online shopping giant is rolling out a new feature called #AmazonCart, which allows users to connect their Amazon and Twitter accounts and add products to their Amazon shopping basket by simply replying to any tweet containing an Amazon link, with #AmazonCart Apple and Samsung damages recalculated A US federal jury has recalculated the damages awarded in the court case involving the two smartphone competitors. The jury raised the amount owed for some patent infringements and lowered it for others. The changes offset each other meaning the total damages awarded in the new verdict stay the same as the original. The court awarded Apple $US119.6 million for patent infringements and Samsung $US158,400. Google and Facebook top three in tech by 2020, Apple not? One of the world’s top tech investors, Fred Wilson of New York’s Union Square Ventures, believes Apple will cease to be important by 2020. Wilson, speaking at the TC Disrupt conference in New York, said Apple is too rooted to hardware and isn’t invested enough in the cloud, something he says will provide the company significant challenges moving forward. Overnight The Dow Jones Industrial Average is up 17.66 to 16.530.55 and the Australian Dollar is trading at US93 cents.