Tuesday, June 11, 2013

tech now

tech now

Why Apple Gave Up On Genius For Apps, And What's Next For The App Store's Long Tail

Posted: 11 Jun 2013 09:06 AM PDT

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Apple is no longer offering the “Genius” feature as a way to surface and discover new mobile applications in the iOS App Store in the latest version of Apple’s mobile operating system, iOS 7. Instead, the spot that used to belong to “Genius” now goes to “Near Me,” a new feature demoed during yesterday’s keynote at WWDC, which recommends apps based on your location.

This is a significant change from iOS 6, where the “Genius” option not only had a button at the bottom of the iOS App Store’s homescreen, it was also the button directly in the center – the one that invites users to tap it first.

App recommendations have been a tough business for many third-parties, and it seems that even Apple, too, is still experimenting with ways to make those recommendations more useful. But by introducing “Near Me” in favor of “Genius,” Apple has essentially given up on offering more personalized recommendations to users based on their preferences, and instead is providing only generalized app recommendations based on a user’s current location.

During the keynote, for example, the “Near Me” feature was demoed in the context of someone who is traveling. And certainly, launching the iOS App Store to find apps for nearby hotels, restaurants or attractions will be handy at certain times. But this isn’t an everyday need, so it’s curious why “Near Me” still gets the center position in the new store. After all, most users looking for new apps hit up the charts or the App Store’s Featured section, where algorithmic and curated lists like “What’s Hot” or “New and Noteworthy” offer better selections.

More Opportunity For Discovery Services?

The removal of “Genius” for apps comes at a time when Apple has been cracking down on alternative app discovery resources. In recent months, Apple has been accused by some – mainly the afflicted – of shutting down discovery services like AppGratis and AppShopper (the latter which later returned after changes), as if under some blanket policy designed to bring all tools for new app discovery in-house.

But that’s clearly not the case – if anything, the removal of “Genius” for apps now gives third-parties more opportunities to step in and try to fulfill users’ needs.

Apple’s policy against app discovery services, first enacted last fall, is there not to disallow these services, but serves as a warning to developers who are attempting to manipulate App Store charts for profit. The guidelines may have read that apps recommending other apps besides the developers’ own “would be rejected,” but Apple is using that clause to selectively dismiss those apps it knows are breaking the unspoken rules.

Other apps operating safely in this space include longtime app discovery source Appsfire and relative newcomer Hubbl, for example, neither of which have experienced the same troubles. In fact, Hubbl co-founder Archana Patchirajan tells us that their newest app update was approved in just three days for App Store release.

Why Genius Didn’t Work For Apps

The app recommendations market has seen some upheaval, and not just because of Apple’s rejections. Some of those operating services in the space, like Crosswalk for example, have since pivoted to other businesses while others shut down. Many that remain are still niche players. Apple itself hasn’t made any public moves, until now with the debut of “Near Me,” to offer any sort of new take on app recommendations. And it hasn’t acquired any startups the way it once did with Chomp in order to better understand the  challenges and possibilities in app recommendations.

But at least it has admitted by the removal of  ”Genius” (for apps - it’s still there in iOS 7 for Music), that its earlier system just didn’t work.

Appsfire co-founder Ouriel Ohayon thinks that Apple’s version of recommendations had never resonated with users because “both the experience and the recommendations were not that relevant,” he says. “Apps were mostly recommended based on what you downloaded versus what you really need and like (taste-based). What you download is not a signal of what you want next. Discovery is more than that,” Ohayon adds.

Users also probably didn’t see the need for “Genius” since they were already turning to the charts for Apple’s recommendations. And when they were looking for apps similar to those they have already installed, the “Related” section within each app’s listing page serves that purpose – and it remains in iOS 7, too.

Like myself, Ohayon also questions “Near Me’s” now prominent position in the App Store, which seems to be an indicator of just how much Apple is struggling to figure out personalized recommendations. “It is not a natural way of thinking. It is probably a good secondary discovery mechanism which could have been part of Genius,” Ohayon says.

Patchirajan agrees that Apple’s “Genius” mechanism had long fallen short of app discovery’s potential because what really works for personalized recommendations is a combination of several factors, not just a focus on “people who like X also like Y,” or your location, as “Near Me” now calls for.

Instead, a recommendation algorithm should look for a number of other signals too, including apps users own, users’ social profiles, users’ interest profiles, and situational awareness. “You need to have rich meta data around apps – just the category and keywords about apps is not enough,” says Patchirajan.

Impact On Developers Is Minimal

Though developers running businesses in this space will be biased against Apple’s own capabilities with regards to app recommendations, the broader consensus among those we’ve spoken with in the industry is that the removal of “Genius” won’t have a major impact on developers, in terms of having apps found by users and then gaining higher rankings.

App downloads are still largely powered by Apple’s charts and Featured sections, not its experimental recommendation sections like “Genius,” and likely not the forthcoming “Near Me,” either. From what we’re hearing in terms of app store SEO (ASO, as it’s often called), not much has changed in iOS 7. Search appears to be basically the same from cursory glances. (Research into keywords and algorithm improvements will take some time).

The new iOS App Store “Wishlist” feature – something which has long since been an option in the desktop version of iTunes –  has now made its way to mobile, but that also isn’t likely to push apps through the charts since it’s basically a list of “maybes.”

For developers, unfortunately, it looks like more of the same.

Apple has reached 900,000 iOS applications, but its $10 billion in revenue paid to app developers is increasingly being concentrated at the top of the charts. Only 2 percent of the top iPhone publishers in the U.S. are newcomers, as it becomes harder than ever to break into the top charts.

Apple will eventually have to figure out a better recommendations system if it wants to cater to the ever-growing number of app developers who are still launching new creations in the hopes of being a part of the App Store gold rush, which is showing no signs of slowing down.

If it does not, those developers could turn their focus to Android. Google Play today growing at a faster rate on both downloads and revenues than Apple’s App Store, having jumped from 19 percent in total app revenue between it and Apple’s App Store last November, to 27 percent this April. Google Play also offers a larger consumer market share, and a slightly more welcoming platform for newcomer developers. However, the store has historically struggled to generate revenue for its developers, something which Apple CEO Tim Cook pointed out yesterday referencing a number of data points indicating how much more engaged iOS users were with their devices.

But at the end of the day, Google/Android doesn’t have to have its entire user base obsessed with their phones – it just has to grow its user base large enough to drive a significant number of downloads, then payments and revenue for developers will follow by nature of its size and scale.

Meanwhile, keeping Apple’s app-dicted users with a steady stream of new apps to try will become something that Apple can’t leave to occasional tools like “Near Me” and  its App Store charts forever.

Barnes & Noble Kills Mac And PC Dedicated Nook Apps, Looks Like Part Of Larger Strategy Shift

Posted: 11 Jun 2013 09:03 AM PDT

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Barnes & Noble appears to be distancing itself and its products from the e-reader and e-book category, and trying to move into more of a role as a maker of low-cost tablets. The shift is ongoing and subtle, but a recent development seems to indicate they’re not all that concerned with devoting a lot of resources to maintaining the e-book business.

B&N told The Digital Reader that it has officially dropped support for the Mac and PC (pre Windows 8) versions of the Nook standalone reader software, and now directs users to the web-based version instead. It’s not a perfect replacement, however; as the Digital Reader points out, that leaves a huge percentage of Nook e-books unsupported as not all titles in the store support the web-based version of the application.

Nook tanking these apps means that Barnes & Noble’s efforts around e-books officially now trail Amazon’s in terms of cross-platform access, but it’s likely B&N is setting its sights on a broader goal of becoming a player in the low-cost tablet space with Nook hardware, as it has recently introduced features that both add Play store functionality to the Nook HD line, and unlock key missing features like a browser for the Simple Touch, making them more than just e-readers.

The simple fact is that Nook being an e-book brand no longer makes any sense for the company, based on its recent financial performance and what looks like dwindling returns from that side of the business. Tightening up the ship, so to speak, indicates that Nook is serious about trying to reinvent itself – something it clearly has to do, or else face the risk of falling by the wayside altogether.

What’s particularly interesting about this development is that it’s timed with Apple’s own announcement that it will be bringing iBooks to the Mac via a dedicated app in OS X 10.9 Mavericks. Apple’s own e-books business is more just about offering its users one more component of an already-strong ecosystem, and there’s no way Nook needs the added competition, so officially throwing in the towel before that new challenger even appears makes a certain amount of sense.

If You Think Glenn Greenwald Should Interview Pres. Obama, Sign This Petition

Posted: 11 Jun 2013 08:47 AM PDT

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Americans deserve answers about the National Security Agency’s spying practices. I urge readers to sign an official WeThePeople White House petition for President Obama to sit down with the journalist who helped unmask the NSA’s controversial programs: Glenn Greenwald.

If the president is serious about his commitment to transparency and open dialogue, he should do a one-on-one interview with one of his most respected critics for a candid discussion. The American people deserve nothing less than a conversation about surveillance that we know will be informed, pointed and civil.

“Giving law enforcement the tools that they need to investigate suspicious activities is one thing,” said then-Senator Obama in 2005. “But doing it without any real oversight seriously jeopardizes the rights of all Americans, and the ideals America stands for.”

The press is one of the United States’ most cherished institutions of government accountability. If you agree, ask your friends and followers to sign the petition.

After a petition gets 100k signatures, the administration promises a response. So, regardless of their decision, we’ll learn something valuable–and that seem like enough of a reason to sign.

After Closing $3 Million Series A, Qwaya Wants To Help SMEs Get Down With Facebook Ads

Posted: 11 Jun 2013 08:44 AM PDT

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It’s often said that if you’re not on Facebook you don’t exist, so dominant in our social lives has the uber-social network become. And so it wouldn’t be surprising to learn that businesses — big and small – may feel the same way. Hoping to cash in on the rise of Facebook advertising is Stockholm-based Qwaya, which offers a cloud-based tool for SMEs to create, publish and measure the effectiveness of Facebook ad campaigns.

The company recently closed $3 million in Series A funding from Zobito, the VC firm set up by the former team behind the enterprise software company Qliktech that IPO’ed in 2010 at a post-IPO valuation of $1B, and Swedish VC Industrifonden. Notably, this represents Zobito’s first investment since the fund was set up.

Qwaya says the new funding will be used for product development, and international expansion out of its Sweden base.

A Facebook “Preferred Marketing Developer” (under the social network’s PMD program), Qwaya offers a cloud-based tool for running Facebook ad campaigns, which it charges for at a “low fixed monthly cost” that, it claims, undercuts competing and more expensive offerings that target larger companies than the SMEs and agencies it aims to attract, and who charge a percentage of ad spend rather than a monthly subscription.

The idea being that by lowering the financial barriers to entry in terms of running effective and automated campaigns on Facebook, Qwaya is opening up Facebook advertising to a much larger market of advertisers, which is also where it sees opportunity.

On that note, the company claims customers in more than 90 countries and says it’s growing by 15% per month, as meaningless as that metric is in isolation.

Its competitors include the likes Alchemy Social, Social.com (Salesforce) and Adobe.

One of the ways it’s able to compete on cost, says Qwaya CEO and co-founder Fredrik Skantze, is by “automating everything we do”. This includes sales and customer service, which is certainly one way to scale. Meanwhile, for an enterprise software startup, Qwaya is definitely running pretty lean with 14 employees — though no doubt that will change now that it has cash in the bank and plans to accelerate growth, as they say in VC lingo.

It's Official: Google Buys Waze, Giving A Social Data Boost To Its Location And Mapping Business

Posted: 11 Jun 2013 08:37 AM PDT

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After months of speculation, the fate of Waze, the social-mapping-location-data startup, is finally decided: Google is buying the company, giving the search giant a social boost to its already-strong mapping and mobile businesses. Although speculation has had it at $1 billion to $1.3 billion, but so far there is no price on the deal. In any event, it’s a doubly strategic move. Google’s purchase comes in the wake of what appeared to be failed negotiations between the Israel-based startup two big rivals of the search giant: Facebook, which was eyeing up the company but apparently faltered at the due dilligence phase; and Apple (neither company ever publicly confirmed interest in acquiring Waze).

The news comes after a particularly heated few days in which reports of Google’s interest in Waze reached new heights, after first surfacing two weeks ago. In the wildfire that is internet publishing, many even went so far as to report it as a done deal, making things even more confusing.

Waze had raised some $67 million in funding from Blue Run Ventures, Magma, Vertex, Kleiner Perkins Caulfield & Byers, and Horizon Ventures. And it looks like the majority of the payout in the sale will go to these VCs. Globes, the Israeli business newspaper that first reported the latest interest from Google, estimated that payouts to co-founders — Ehud Shabtai, Amir and Gili Shinar, Uri Levine, Arie Gillon — and its CEO Noam Bardin, will be under $200 million in total.

There are at least a couple of places where you can see Google making use of Waze data.

Social. Under CEO Larry Page, Google has been especially bullish on where it positions itself on social, which it has been hinging on Google+ as a kind of web across all of its other properties to show you, the user, what those you know are doing, and also to let your connections see what you are looking at online. Taking a page from Facebook’s book, the thinking goes that this helps with discovery and engagement.

Waze, as a crowdsourced location platform, would give Google an additional, very mobile-based angle on this concept, letting users not just share places (i.e. sites) visited on the web, but actual places visited physically. As Bardim noted at the AllThingsD conference in April, “What search is for the web, maps are for mobile.” By this, he means that most of the searches you do on mobile have to do with location, and Waze is one of the few companies out there that is bringing that kind of search together with actual map data and a social layer. (The NYT ran an interesting piece yesterday with one mapping company describing how maps on mobile specifically become a “canvas” for all other apps.)

Competition. Waze could be a two-pronged fork for Google: On one hand, it gives the search giant nice, healthy wedge into the mass of consumers who are already using the app on iOS devices. But it also, if reports are to be believed, also gives Google a way of roadblocking how companies like Facebook could use Waze’s assets. As the startup likes to point out, it’s not a mapping company, but a big data player. Facebook, making its own big push on mobile, would have been a natural home for a socially-focused company like Waze, which also happens to be one of the few home-grown mapping databases around. This will mean that Facebook will need to have to continue to use third-party data for its own location-based searches and information, or less look to acquire elsewhere.

(Now could be a good time to wonder whether Nokia might consider offloading Navteq, its loss-making but strategic mapping asset, to shore up its financial position…)

It’s interesting, in any case, that Google and Waze have now kissed and made up. It was only in April that Bardin jabbed at Google when talking about who the big players in mapping were and how Waze stacks up against them: Waze used to benchmark itself with Google, he noted at the AllThingsD conference, but after the search giant cut off access to its API, Waze started to benchmark to Navteq.

When the Facebook acquisition reports surfaced, we’d heard that one of the sticking points was that Waze wanted to keep its R&D in Israel, while Facebook was leaning to a Menlo Park relocation. Since then, others have told us that this was just smoke a mirrors and that there were other reasons the deal fell through (Mountain View’s most famous resident being one possible factor). Google, unlike Facebook, has a decent presence in the country, including a new hub for startups started in December 2012, Campus Tel Aviv.

Google today made it clear that it would keep Waze’s operations going in Israel — for now, at least. “The Waze product development team will remain in Israel and operate separately for now,” Brian McClendon, Google’s VP of Geo, noted in the blog post announcing the deal. “We're excited about the prospect of enhancing Google Maps with some of the traffic update features provided by Waze and enhancing Waze with Google's search capabilities.”

In any case, it makes sense that Waze might want to keep its Israel-based operations intact. Just about all of the company’s 110-or-so employees are there, with only around 10 in a very modest office in Palo Alto, just down the street from another big-data startup, Palantir. That small proportion, however, is mighty: regular workers there include CEO Noam Bardin and Di-Ann Eisnor, Waze’s VP of platform and partnerships.

The U.S. is currently Waze’s largest single market — in April, Bardin noted that 12 million of its (at the time) 44 million users are based there — and this is where the company is putting its growth efforts for now, too. In February of this year, Waze expanded its U.S. operations, and its monetization ambitions, by opening an office on Madison Avenue, the heart of the advertising world in New York City, and we’ve seen that members of the team have been visiting New York recently. There is still a lot of development to be done on the advertising front — and given Google’s pole position in online and mobile advertising, that would give Waze another obvious fit with its new owner.

Ironically, the news comes as Google continues to fight other kinds of fires on the mapping front. In the U.S. it is trying to get a ruling overturned that it violated federal wiretap laws with its StreetView services.

In Europe, Google recently offered up a settlement in a search antitrust suit, originally brought by travel and mapping companies, that claimed Google, the biggest search engine in Europe by a longshot, was giving its own mapping and travel results more preference in search results over those of its competitors, making business untenable for smaller players. In that ongoing case, the EU competition regulator Joachin Almunia said at the end of May that Google still needed to make more concessions.

After A Week On Android, Vine Surpasses Instagram On Google Play Charts As Top Social App

Posted: 11 Jun 2013 08:25 AM PDT

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Vine has already clarified just how quickly its userbase is growing, with the announcement that the app had hit 13 million downloads by the time Twitter launched it on Android. This was all just a week ago. Today, however, we’ve learned that Vine has climbed to the top of the charts on Android as the top social app and the No. 4 free app on Google Play. Instagram is No. 5.

For those of you who don’t like smartphones, GIFs or general merriment, Vine is a new app released by Twitter in January of this year. The app works a bit like an Instagram for video, letting you shoot creatively edited, six-second looping videos to share with your friends on social networks, etc.

The app has seen some incredible growth in the short time it’s been available, hitting No. 1 on App Store charts in just a matter of days. A week later, we learned that Vine had already grown to be about twice as popular as SocialCam and other competing video-sharing apps.

The team has been iterating ever since, adding the ability to use both front- and rear-facing cameras and working out some kinks. And it’s clearly paid off.

Nick Bilton of the NYT noticed just a few days ago that there seem to be more Vine shares on Twitter than Instagram for the first time ever, thanks to a handy graph from Topsy Analytics.

This could have something to do with the fact that Instagram pulled Twitter Card integration to direct more traffic to Instagram.com, but I’m not convinced that that’s a conscious thought running through the minds of Instagrammers as they’re deciding where to share.

What’s more likely is that Vine users want to share on Twitter because the Vine ecosystem is still growing, and those users want to ensure that their creation gets as many views from friends as possible. Then add to it the fact that Vine launched on Android just around the time that Vine.co shares surpassed Instagram.com shares, and it’s clear that Vine simply has a growing group of people interested in using the service.

Vine is available now in both the Apple App Store and Google Play.

In Writing Platform Push, Draft Lets You Collaborate Then Publish Anywhere

Posted: 11 Jun 2013 08:00 AM PDT

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Draft, a streamlined online word processor with version control, is getting deeper into the new professional publishing ecosystem.

The one-man team of Nathan Kontny has just introduced a new REST API that’ll let any news outfit or other publishing organization connect Draft to the other software it uses. If you’re BuzzFeed or The Huffington Post* or another media company with a big mix of full- and part-time writers, you could use the API to let writers and editors work through versions together in Draft then publish straight to your custom content management system.

Meanwhile, if you’re running a group blog using a standard setup from WordPress or Blogger and you want a more pristine, versioned environment, Draft now lets you publish from it to them.

Since launching in March, it has also added features to publish to Tumblr, Twitter and most recently LinkedIn and MailChimp (which should be particularly useful to content marketers).

Beyond publishing out, Kontny has also made it much easier to pull in content for a draft. He’s added audio and video transcription, a two-way sync tool with file storage services like Dropbox, Evernote, and Google Drive, and a Chrome extension that lets you pull text into a new or existing draft.

The updates have been coming fast. He’s also built commenting so collaborators can discuss specific sections of a draft, and simple social analytics that let you measure tweets about your writing based on word count, day of the week and reading comprehension level.

Draft, and private-beta competitors like Editorially and Poetica (please invite me, folks) are trying to create a new writing-centric platform to go along with the leading publishing tools of the day. It plays friendly with publishing tools, but isn’t trying to deal with website design and hosting or massive backend content management.

The API and publishing options, the transcription and syncing tools, and comments all help it toward that goal.

I have a suggestion for an additional editing feature, that can be crucial to any pro writing team. When you share a link in Draft, your collaborator can only see and edit the most recent draft you share. They can’t view the entire set of them. If this person is, say, your editor at your publication, they need full access to see your thought process and any changes you make to their edits, and should have the power to publish.

And Kontny also may want to consider integration over development for other parts of Draft. Lots of companies provide great analytics tools for online publishing, like Chartbeat for articles or Hootsuite for social media management. Why not work to integrate with all of them instead?

This sort of refining will be crucial for any writing software that aims to be a part of publishing’s future. The big CMS companies are busy fleshing out the drafting side of things. WordPress.com recently pushed a great upgrade to its revisions tool, for example.

Meanwhile, more and more big new publishers, like Vox Media, are choosing to build their own CMSs in-house to gain full control over all aspects of the organization. Startups like Draft could become a part of each of these systems if they nail major sub-use cases, such as writing collaboration, particularly with features like the new API. But it’ll be challenging to balance the enterprise-level demands like the editor control I want with self-publishing needs like its freelance editor service.

I say this from personal experience. My own startup, WriteWith, tried to do some of each nearly a decade ago, and ended up doing neither well enough to survive.

*HuffPo got a mention because they’re one of the larger online news-oriented publishers out there, not because they’re also owned by TechCrunch parent company Aol.

BrightEdge Raises $42.8M For Content Marketing And SEO

Posted: 11 Jun 2013 07:59 AM PDT

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BrightEdge, a company that offers tools for search engine optimization and content marketing, is announcing that it has raised a big $42.8 million Series D.

The round was led by Insight Venture Partners, with participation from existing investors Intel Capital, Battery Ventures, Altos Ventures and Illuminate Ventures. The company has now raised more than $63 million total.

BrightEdge started out as an SEO company, and when it raised its Series C early last year, that was still the main focus. At the same time, co-founder and CEO Jim Yu told me at the time that “search is evolving” and that BrightEdge was keep up with that evolution. Now, the company seems to be emphasizing the content marketing side of its business — in other words, helping businesses ensure that the content they create has the reach and impact that they want. In an email, Yu argued the company has a broader vision for content marketing that includes, but is not limited to, SEO (after all, what is SEO but another way to promote your content?).

“Our goal is to become the essential content marketing platform for modern business,” Yu said. “If we can deliver on our promise of understanding consumer engagement of organic content across all digital channels, we fundamentally believe we can change the trajectory of marketing.”

The content marketing features highlighted on the BrightEdge website include the ability to measure traffic, revenue, and engagement on content across search, social, mobile, and other digital channels; to find popular topics on Twitter and tie them into the brand content that’s getting the best results; and to forecast the financial impact of a content marketing campaign before it launches.

BrightEdge says that it’s being used by 600 direct clients who collectively operate 6,000 brands — 300 of those clients, including SuccessFactors, SurveyMonkey, and Choice Hotels International, signed up in the past 12 months. The company also says that its customers include nine of the 10 largest hotel groups, seven of the top 10 online retailers, and seven of the 10 largest technology companies.

“Near term, our goal is about pure scale to meet demand,” Yu said. “This means more investment in engineering, sales and marketing to grow the business. In the next year our goal is to further expand our platform, adding new ‘webscale’ capabilities across every channel. This is a massive market opportunity and we have some fairly ridiculous goals in terms of growth, customer adoption and impact.”

Elite Daily, For When BuzzFeed Just Isn't Enough

Posted: 11 Jun 2013 07:34 AM PDT

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Gen Y is obsessed with content. Addicted even. This explains why Reddit and BuzzFeed are two of the most popular websites on the internet right now. But that doesn’t mean there’s no room for disruption, right?

At least, that’s how David Arabov, Gerard Adams, and Jonathan Francis, founders of Elite Daily, feel. Elite Daily is a blog, at its core, that was designed specifically for Generation Y, but with a twist. Elite Daily doesn’t have the same editorial structure as blogs like BuzzFeed and Gawker, with salaried writers churning out story after story to satisfy the masses.

Instead, Elite Daily has a strong editorial team of 25 people who not only write content for the generation, but field thousands of stories from over 250 unpaid contributors from around the world. The editorial team ranges in age from 20 to 24, fitting perfectly the demographic to which they’re writing.

According to co-founders Arabov and Francis, who started the publication in a dorm room with no funding to date, Elite Daily sees between 120 and 150 stories cross the home page. To give you a little perspective, TechCrunch is seen as a publication that pushes a lot of stories, and we only have around 50 to 60 stories cross our home page every day.

In other words Elite Daily is a bountiful harvest of content for the content-obsessed. But let’s talk quality versus quantity. With over 250 unpaid contributors, a few boring, poorly written, or just downright offensive stories surely find their way into the Elite Daily editorial inbox.

But Arabov explains that not all stories are accepted from contributors, but those that are go through two editors before hitting the home page. That doesn’t necessarily mean that they’re polished to AP-style perfection, but it does mean that they are interesting pieces of bloggery.

Regarding offensive content, Elite Daily believes that Gen Y should have a voice. Perhaps that voice is yelling crude, sexist, or just plain sleazy things, but it still deserves to be heard.

So far, the experimental new media site seems to be faring well. In May, ED say 8.5 million uniques, and 89 percent growth from April to May.

Elite Daily underwent a major redesign on May 1, and is ready for your perusing pleasure whenever you are. Just click here.

AWS Adds Free Usage Tier For Red Hat Linux, Drops Prices For Relational Database Service

Posted: 11 Jun 2013 07:30 AM PDT

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Amazon Web Services (AWS) has added a free tier for Red Hat Enterprise Linux (RHEL).  The company also announced last night that it is dropping prices for its relational database service.

AWS has offered Red Hat Enterprise Linux since 2007. In 2010, AWS began offering a free usage tier. With today’s news, the two are combining to offer 750 hours of RHEL to the customers eligible for the free usage tier.

The news follows last night’s posting on the AWS blog that it is dropping the price on Amazon RDS (Relational Database Service) database instances, both for its “On-Demand” and “Reserved,” varieties. A reserved instance is bought in advance at a set price. An on-demand instance lets the customer pay as needed with no long-term commitment.

AWS states that its on-demand prices have been reduced as much as 18% for MySQL and Oracle BYOL (Bring Your Own License) and 28% for SQL Server BYOL. All of a customer’s on-demand usage will automatically be charged at the new and lower rates effective June 1. For reserved instances, prices have been reduced as much as 27% for MySQL and Oracle BYOL. The new prices apply to Reserved Instance purchases made as of today.

Here’s an interesting catch: AWS will provide the new pricing to reserved instances bought within the last 30 days. Reserved instances are normally non-refundable. This applies to one-year reserved instances purchased in the last 30 days and three-year reserved instances purchased in the last 90 days. The exchange is for a limited period of time. Customers will receive a pro-rata refund of the upfront fees paid at the time of purchase.

More for less is  a common theme that AWS presents. Is it a price war? Undoubtedly. But it is also a reflection of the shift that the enterprise is going through. There is just more business. Companies don’t need to manage their own databases if they choose not to. They can turn to AWS for that. With that new volume, AWS can drop prices and still come out ahead.

Jony Ive Debuts iOS 7: “Bringing Order To Complexity”

Posted: 11 Jun 2013 07:25 AM PDT

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Apple debuted the next generation of iOS yesterday at WWDC and now you can watch Jony Ive’s 7 minute iOS 7 introduction video.

“True simplicity is derived from so much more than just the absences of clutter or ornamentation,” Ive explains. “It’s about bringing order to complexity.”

As stated on the WWDC stage yesterday, iOS 7 is the biggest change to ever come to the iPhone. So much so that Apple is going to have to extensively sell the update before rolling it out. From what we’ve seen, the new look and feel, gathered by devs testing the beta, is rather polarizing.

Facebook receives a major backlash when tweaking its look. Apple is about to change nearly everything on the iPhone.

This video is likely just the start of a major marketing campaign. Apple will need to demonstrate why they radically changed iOS. Expect preemptive TV spots and online ads prior to iOS 7′s rollout this Fall.

So sit back, grab an Americano, and let the calming voice of Sir Jonathan Ive explain the magic of the next generation of iOS.

Modus Raises $10M For Data Driven Approach To E-Discovery

Posted: 11 Jun 2013 06:57 AM PDT

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It's not often that a services provider gets a hefty venture capital investment. Last week, though, OpenStack cloud builder Mirantis raised $10 million. And today, Modus eDiscovery raised $10 million for its data driven service for driving down the costs and finding far more than any number of lawyers can pouring over information by hand.

The round was led by Harbert Management Corporation and Azalea Capital. Modus CEO Abtin Buergari also participated in the financing.

Modus, out of Washington, D.C., has no intellectual property per se. What it does have is a legal market that still spends huge sums on lawyers to pore through legal documents. It's so labor intensive that top-tier law firms will contract to e-discovery firms that employ lower paid lawyers to do the discovery work.

Modus takes legal documents and turns them into data. Instead of man hours, Modus gets paid for every gigabyte it makes searchable. By making the documents searchable, Modus has ways to find documents that a human simply can't compared to the analytics that can be done pragmatically.

The e-discovery world is like a lot of markets. Dominant legacy players have systems and processes they have used for years. But data has a way of changing everything. Modus is leveraging the shift to offer services that save money and get more insight.

Modus plans to use the funds to expand into large markets, in particular California and New York. It’s in those markets where law firms are more inclined to change their ways, especially as the overall judicial system evolves and adapts to this new data-driven world.

Marketo's First Launch SInce IPO Is A Machine Learning Engine For Social Campaigns

Posted: 11 Jun 2013 06:30 AM PDT

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Marketo is coming out with its first launch since its successful IPO last month. It's a one-to-one marketing tool that applies machine learning for social campaigns that allows marketers to automatically adapt messaging based on the customer and the history of engagement.

The engine for Customer Engagement Marketing (CEM) utilizes templates to create a content stream, a set of ideas for how to conduct a dialogue with a customer. For example, a customer buys his third video game. That might trigger the notice of the CEM that would then offer the customer a credit on a next purchase if he tweets about it. A larger incentive might come if the customer tweets three times about the game.

The CEM has built-in rules and machine learning algorithms that gauge customer engagement, said CEO Phil Fernandez in an interview last week. The engine is designed to understand which sequence of messages are creating active, positive engagement. It is designed to deliver messages based on the customer and what content they have received in the past. It uses a drag-and-drop user interface that allows new or modified content to be placed in the stream. The system manages the timing and sending of the content.

Companies with multiple products are often juggling different marketing efforts. The struggle comes with trying to get the right message out. Fernandez said the CEM allows the marketer to set up sequences for each campaign, tailored in a way so the system knows when to send a message and when it might be best not to send one at all.

It comes down to how best to nurture the customer. Doing it manually is impractical as it means changing the rules on a constant basis to best suit the individual customer.

There are also the pitfalls that arise. A customer might get a completely wrong message if a marketing automation system is set up wrong. The CEM has rules built in to adapt to the customer's history.

Metrics are provided that encompass the broad array of measurements marketers track when building campaigns. This allows the marketer to better tune a campaign with content that is most compelling to the customer.

Machine learning has broad implications for business. It can be used in risk analysis, financial decision-making, and on an operations level to best determine where resources should be allocated.

It's early in the game, and engines like the one from Marketo will need to be refined as people find more ways to communicate online and campaigns get more sophisticated.

But more so, Marketo's news points to how analytics is changing the market landscape. Competition for Marketo is not just from other similar services but also from the new generation of companies that can provide their own flavor of analytics.

Chirpify Goes Beyond PayPal To Bring Direct, In-Stream Payments To Facebook, Twitter And Instagram

Posted: 11 Jun 2013 06:00 AM PDT

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Facebook and Twitter have become stellar venues for brands and small businesses alike to advertise their wares. However, while social-style gift-giving has seen some traction thanks to Facebook, social commerce has been slow to take flight. Chirpify launched in early 2012 to do something about this, offering an easy way for people to make purchases in-stream on Twitter. Late last year, the young startup expanded its scope to include another popular social network, the Facebook-owned Instagram, so that users could peruse items being sold on Instagram (tagged with “#instasale) and enter “buy” in the comments to facilitate an insta-transaction.

While the ability to pay for items on Twitter, Instagram and Facebook by using keywords or hashtags like “buy,” “want,” and “gimme” has some appeal — as it simplifies the in-stream social payment process across networks — the platform hasn’t yet seen the adoption one might expect. In order to lower the barriers for users, Chirpify announced today that it is now giving users the ability to accept domestic and international credit and debit cards, along with sending and accepting automated clearing house payments in-stream on Twitter, Facebook and Instagram.

The move, in theory, intends to open up the playing field for buyers and sellers on social networks, as Chirpify has (until now) relied exclusively on PayPal to enable in-stream payments. Brands and merchants using the platform want more options when it comes to transactions, Chirpify founder and CEO Chris Teso says. The launch today aims to remove some of that friction and make direct payment processing part of that transaction process.

In moving beyond its reliance on PayPal to offer direct payment acceptance, Chirpify hopes to offer another incentive for brands and merchants: Lower fees. By removing the middle man, Chirpify users get the added benefit of not having to cough up extra dough to meet PayPal’s fees, beyond what they would typically pay as part of the implied interchange fees inherent to credit card processing.

Of course, as mentioned previously, startups that are looking to make it easier to buy and sell on Twitter especially, haven’t had much luck in the past. There’s probably no better example than Ribbon, which offered an in-stream payment platform for Twitter by allowing users to click a button within tweets to make a purchase — without leaving Twitter.com. In April, however, Ribbon confirmed that Twitter had shut them down, likely because of how the platform (incorrectly) implemented its model using Twitter Cards.

Chirpify, on the other hand, has taken a safer approach, eschewing the “button” in favor of allowing users to make purchases by way of keywords and hashtags. Brands and celebrities like Adidas, Green Day, the Portland Trailblazers (an NBA team) and Snoop Dogg have adopted the platform as a way to capitalize on their big social footprints and sell merchandise and products directly to fans. The idea being that, for now, Chirpify offers the easiest way for brands to take advantage of impulse purchasing via social media.

To that point: Starting today, the first time a consumer makes a purchase with Chirpify, they simply create an account, sign in and enter their credit card, debit card, routing info or connect their account to PayPal.

Once they’ve done that, all they have to do to make a purchase is reply to a tweet or comment on a Facebook or Instagram post with “buy,” “donate” or “gimme.” At launch, Chirpify will be accepting American Express, MasterCard, Discover and Visa, Teso says.

Since Chirpify emerged last year, some have speculated that it wouldn’t be long before Twitter would scoop up the startup and use it to help lay the foundations for its own social commerce functionality. Especially considering that Chirpify hasn’t (as of yet) been in violation of Twitter’s Terms of Service. Perhaps, by opening up its platform to support a wider range of payment types (and by lowering its fees as a result), the startup will have lowered the barriers enough to make this kind of in-stream social purchasing attractive to the mainstream — and potential acquirers.

For more, find Chirpify at home here.

InternMatch Lands $4 Million Series A To Build Its Data-Based Job Search Platform

Posted: 11 Jun 2013 05:30 AM PDT

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InternMatch has raised a $4 million Series A funding round led by ARTIS Ventures and Subtraction Capital, as well as follow-on investors including Kapor Capital and 500 Startups. The company will use the money to expand its engineering and marketing teams and build data-based technology to help match companies with the right applicants. InternMatch, which launched in 2009, has now raised a total of just over $6 million in funding.

InternMatch has also added Paul Willard, the former CMO of enterprise software developer Atlassian, to its board. In addition to Atlassian, Willard also helped scale up Coupons.com.

“It’s a really exciting development for us because he is one of the most widely regarded online marketing experts and typically works with a lot of growth stage companies, taking them from tens of millions to hundreds of millions in revenue,” says InternMatch co-founder Nathan Parcells. The site currently has over 5 million page views and 150,000 applications per month.

As its name suggests, InternMatch began as a platform matching up college students with internships. As InternMatch’s initial user base grows older, however, many are using the site to find their first jobs after graduating.

Companies have the ability to build hubs with extensive information about their work culture and benefits, which helps differentiate InternMatch from competing job-search sites like CareerBuilder, Monster, Dice and Indeed. This feature has proven attractive to organizations like Yahoo!, which lists its entry-level positions on InternMatch.

“A big part of it is helping companies define their culture. It’s part of the process that is really painful and broken. The flipside is that students are applying everywhere. Employers have 400 candidates for one role,” says Parcells.

“What we’re finding from employers is that they will resort back to networking and referrals because they can’t manage all those candidates. We’re now expanding to entry-level jobs, which is a huge market, but we’re also building technology to target candidates by understanding who their ideal fit is.”

InternMatch will use some of its Series A funding to develop products that take advantage of the data accumulated by the site, says Parcells. One of the company’s goals is to help students do a better job of deciding which positions to apply for instead of sending out a flood of applications. This in turn increases the quality of applicants companies see.

“We have knowledge of what kinds of students are applying where and we’re investing now in using that information and that data to delegate students to where they should be, places that they haven’t heard of,” says Parcells. “This demographic is so new to the job search process that there is a tremendous amount of value we can provide to students and employers about where else there might be a good fit.”

While InternMatch expands its audience to graduates, it will also continue to develop new products for its core user base of college students. According to InternMatch’s research, just 3.8% of students found their last internship at a traditional career fair. Instead, more than 42% launched their internship hunts on Google. InternMatch seeks to create a more targeted search experience as students start their internships at younger ages. The company’s research found that more than half of students began their first internships in their sophomore year of college or earlier.

“There is an increasing awareness of the importance of internships,” says Parcells. “It’s now the number one way students are getting offers for full-time jobs.”

Europe To Formalize How Consumers, Companies Can Sue Big Fish Like Google Over Antitrust Damages

Posted: 11 Jun 2013 05:13 AM PDT

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Feeling slighted by Google’s dominance in search? In Europe, you may soon be able to sue for damages. A new proposal published today by the European Commission proposes to spell out the details, and effectively make it easier and quicker, for consumers and businesses to sue large companies when they feel that they have been the victims of antitrust violations. These would sit on top of European fines and sanctions on companies for the same violations.

The proposals have been in the works for some time. “Took four years longer than I had hoped,” Neelie Kroes, a VP of the European Commission noted today.

The proposals would cover areas like cartels and abuses of dominant market position, the EC noted today in a statement. You can read the full proposal here.

Although it’s likely that bigger companies will push against the thought of more companies attacking them, this will come as a welcome counterbalance to worries by companies that appeal to the EU for help in antitrust cases. The latter group occasionally feel that some bigger companies get off too lightly, or that resolutions take too long to settle, or that the companies themselves are not getting direct redress for years of abuse.

For example, in an ongoing case concerning Google and search dominance brought by online mapping and travel companies, among others, Google has recently proposed a set of controls that it would put into place to make sure that it doesn’t give its own services preferential placement above those of its competitors. But with Almunia now saying Google must make more concessions, and competitors yet to put in their formal responses, it will be some time before a resolution is reached. In cases like this, now those who feel they’ve been affected will be able to consider whether they want to take more direct action for compensation.

“Infringements of the antitrust rules cause serious harm to European consumers and businesses” said EC VP Joaquín Almunia, who oversees competition issues, in a statement. “We must ensure that all victims of these infringements can obtain redress for the harm they suffered, especially once a competition authority has found and sanctioned such a breach. It is true that the right to claim compensation before national courts exists in all EU Member States but businesses and citizens are not always able to exercise it in practice. Today’s proposal seeks to remove these obstacles”.

It’s not that individuals and companies have not sued in the past, but because the process of doing so has been too difficult or costly, many have avoided this route.

“Due to procedural obstacles and legal uncertainty, only few of these victims actually manage to obtain compensation. This situation particularly affects consumers and SMEs, which most often do not engage in legal action for reparation of their harm,” the EC notes. Only in 25% of all antitrust infringement decisions the Commission took in the past seven years did the victims seek to obtain compensation, it further notes. As with a lot of legal cases in Europe, the fact that there are different rules in each country also has slowed things down.

On top of putting into place some procedures for how people can sue, the EC says it plans to put some pressure on to individual member states to harmonize their “redress mechanisms.”

Here are some of the details of what the proposals hope to cover:

  • National courts will be able to order companies to disclose evidence in compensation claims.
  • An infringement decision by a national competition authority will apply in another member state.
  • “Rules on limitation periods, i.e. the period of time within which victims can bring an action for damages, will be clarified. In particular, this will ensure that victims can effectively claim damages once an infringement has been found by a competition authority.”
  • “The liability rules in cases where price increases due to an infringement are ‘passed on’ along the distribution or supply chain will be clarified. In practice, this will ensure that those who suffered the harm in the end will be the ones receiving compensation.”
  • Settlements will also be tackled, with the idea that these will be easier to reach and in a less costly (probably quicker) manner.

What’s also interesting is that this is not a call for a legal-free-for-all. “Contrary to the U.S. system,” the EC notes with possibly the slightest hint of a sneer at the litigiousness on the other side of the Atlantic, “the proposal does not seek to leave the punishment and deterrence to private litigation. Rather, its main objective is to facilitate full and fair compensation for victims once a public authority has found and sanctioned an infringement.” Whether that will mean ultimately less action at the end of the day remains to be seen.

The next step is for the proposal to be discussed by the European Parliament and the Council “according to the ordinary legislative procedure.” After that approval, member states will have two years to implement the new rules.

Yep, Facebook Ads Are Better With Social Context (According To A Salesforce ‘Benchmark' Report)

Posted: 11 Jun 2013 04:59 AM PDT

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Salesforce.com is releasing what it calls The Facebook Ads Benchmark Report, which shows how Facebook ads performed on Salesforce’s social advertising service Social.com.

As the name implies, the report’s main purpose is to let businesses see how their ads stack up against the average, so to a certain extent, it’s basically a data dump — and I’ll try to highlight some of the more interesting data in a second. At the same time, since Facebook announced last week that it’s going to be consolidating and eliminating many of its ad units, focusing too much on the granularity of one unit versus another can seem like it misses the bigger picture.

In fact, Michael Lazerow, chief marketing officer for the Salesforce Marketing Cloud (and the co-founder of Salesforce-acquired Buddy Media), said there’s a bigger theme emerging, one that will remain relevant as the specific ad units change.

“We share Facebook’s vision that advertising must be re-organized around people,” he said. “In the future, you’ll see that ads with social context continue to perform better than ads with no social context. In less than a year, all ads on Facebook will have social context, and we’re excited about that future.”

Lazeros was referring to a planned change that will eliminate the standalone Sponsored Story ads and instead automatically add social context to any ad unit when possible. To back up his argument that this will be an improvement, he pointed to the report’s finding that units packaged organic Facebook activity as ads, such as Sponsored Place Check-In Stories and Sponsored Page Post Like Stories, saw considerably higher clickthrough rates than average — the Check-In Stories were the highest, with a clickthrough rate of 3.2 percent. (Other ad units, including the Action Story and Event RSVP, had clickthrough rates as low as 0.2 percent — but they have the benefit of being significantly cheaper.)

The report also breaks things down by industry, with telecommunications and publishing showing the highest clickthrough rates (0.919 percent and 0.790 percent, respectively respectively), while advertisers in dating and deals saw the lowest CTRs (0.165 percent and 0.027 percent, respectively) and paid the highest CPCs (cost per click) and CPMs (cost per thousand impressions). And there are geographic benchmarks, too — for some reason Taiwan has an extraordinarily high clickthrough rate of 2.126 percent, while the United States is on the low side, at 0.171 percent.

By the way, all this talk about click rates might not be quite what Facebook wants — when Gokul Rajaram, product director of ads at Facebook, spoke at TechCrunch’s Disrupt NY conference at the end of April, he made the argument that clicks are overvalued as an indicator of ad effectiveness and consumer intent. Nonetheless, these kinds of numbers are probably what most advertisers care about right now.

You can see many more detailed charts in the report itself, which is based on a total of 114 billion impressions during the first three months of this year. Salesforce says the report should be live here.

Zynga's Wake: Does The Venture Model Make Sense For Gaming Anymore?

Posted: 11 Jun 2013 03:41 AM PDT

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Just about eight weeks ago or so, I was on a call with Zynga’s COO David Ko following the company’s first quarter earnings report. Zynga was trying to manage expectations for the coming two quarters by saying it had paused its game slate to re-evaluate every upcoming title on the table.

I can’t remember the exact question I asked, but it was something like, “Finland’s Supercell made $104 million in profit on a headcount of 100 last quarter while you made $4 million in net income with roughly 3,000 people. Does your headcount and structure make sense?”

Ko, who has a reputation as a savvy operator and is very media-trained, dodged the question saying, “We’re the biggest believers in social gaming across all platforms. This year, we will measure our progress by our ability to bring existing franchises to mobile while maintaining profitability.”

However, even if some Zynga employees were caught off guard by this month’s layoffs, the writing was very clearly on the wall. A company that had grown up built for one platform (Facebook), wasn’t well-adapted for the realities and economics of building titles on Android and iOS.

They aren’t the only publicly-traded Western gaming company grappling with major platform shifts affecting the entire industry. In the first half of this year, both Zynga and EA have shed roughly 1,500 jobs. While their situations are unique, both rounds of layoffs have to do with the stagnation of gaming platforms like consoles and Facebook against the rise of iOS and Android.

While there are plenty of emerging mobile gaming companies like Supercell and King, the situation raises a question I’ve been thinking about for the last several months.

Is the venture model of funding gaming companies, which prizes a large exit through a sale or IPO and rapid growth, well-suited for a new world where companies can rise and fall as quickly as their hits climb and tumble off the charts? Are we in a period where new incumbents will rise up and eventually hold on to their dominance, or are we in a new era which is just inherently more chaotic and unpredictable?

Zynga, which took around $850 million in venture funding, put huge pressure on itself to grow quickly. In Zynga’s fastest-growing days, the company was adding several people a day. That has ultimately made it difficult to maintain a cohesive company culture and adapt to rapid industry shifts.

Toward A Dividend-Based Model?

While gaming startups may need some initial capital to market their titles, they can throw off lots of cash if they’re successful. Meanwhile, the IPO door is closed in the short-term because of Zynga’s lackluster debut, and the market for large nine- or 10-figures exits is quiet as giants like EA and Zynga re-strategize. At the same time, while barriers to entry are rising, the network effects that the biggest companies have aren’t as strong as they used to be in the console era where relationships with retailers and distributors mattered.

I’m not the only one who is thinking this way. Perhaps with fewer exit opportunities and lots of potential cash flow, dividend-based returns just make more sense.

On a call last week with longtime EA executive Neil Young, who sold early mobile gaming company Ngmoco to DeNA for up to $400 million and is now on a new non-gaming startup N3twork, said that gaming financing needs to be rethought.

“The restaurant financing model might work for games. You could get a payback through a new split of dividends,” he said.

Then there are smaller investment firms like iVentureCapital out of Hamburg, Germany, a traditional hub for browser-based gaming companies, that has backed gaming companies like Kamcord and is open to earning dividend-based returns.

Still others are experimenting with contracts for revenue share instead of outright ownership. Rizwan Virk, who co-founded and sold Gameview Studios to DeNA, then invested in Tapjoy, Pocket Gems and Funzio, which was eventually acquired by GREE for $210 million, said he’s been asked by developers in the last few months for advice on how to structure these kinds of deals. He added that each case is really unique and that he doesn’t have a blanket recommendation for going one way or another.

“What’s happened in the last six to 12 months is that VCs and even a lot of super angels aren’t investing in as many game startups anymore. So the companies with funding — the ‘haves’ like the VC-backed startups and big mobile guys — are turning into publishers or funders of games in exchange for a revenue share with the developers, or the ‘have nots’,” Virk said. “This becomes a way for developers to not give up a big chunk of the company for a relatively small amount of money.”

There are also several very successful mobile gaming companies like Minecraft-maker Mojang and Temple Run-maker Imangi Studios that have gone for years without taking outside venture funding.

Why might a dividend- or revenue share-centric model make more sense? Here are a couple factors to consider:

Haves And Have Nots

One dynamic that’s been interesting to watch as the mobile gaming industry has matured over the last couple years is a mutual disdain that certain gaming founders and venture investors have for each other.

Studios that are successful can throw off in excess of $1 million per day. (Supercell last said it was earning $2.4 million per day. That’s like printing a Series B round every week.) So the “haves” definitely don’t need funding. If anything, many of the rounds that have happened over the last few years like with Rovio and Supercell, have been secondary — meaning founders, early investors and employees took cash off the table. The capital didn’t go into the companies.

At the same time, other studios like Temple Run-maker Imangi Studios, Minecraft-maker Mojang, Backflip Studios and Subway Surfers-backer Kiloo, haven’t taken funding because they haven’t wanted it or the terms weren’t right.

And the “have nots,” whether they’re companies that have yet to see a major hit or need cash to keep going in a lull, obviously find it hard to raise on decent terms. Booyah, an early, hyped mobile gaming company founded by Blizzard alums and backed by Kleiner Perkins and Accel, is on its third CEO in two years.

Certain top-tier venture investors, likewise, can be wary of the hits-driven nature of the business. Greylock doesn’t have a mobile gaming bet, although their China fund does with Hoolai. Sequoia hasn’t publicly made a bet on a mobile game development company since Pocket Gems in 2010, although they’ve backed educational app makers and players that help the broader ecosystem monetize like Chartboost.

The concern is that with a hits-driven business, an investor might come in with too large a valuation if they price a company at its peak. The company could later fall off if they don’t have other follow-up hits.

Because of the hits-driven nature of the business, you could even say that Supercell took a knock on its valuation. At a $770 million valuation, the company was priced at only about 1X its annualized revenue based on the $179 million it made in the first quarter of this year. Then at a $2.27 billion market cap, Zynga is valued at only $600 million more than the cash, short-term and long-term investments it had on its balance sheet at the end of March.

Equity Structure

Secondly, the normal equity breakdown — which is a perennially touchy issue for any company — makes even less sense for a gaming company.

In a business with really strong network effects, like a marketplace like Airbnb or a social network like Facebook, the first 20 employees almost certainly have more impact on the trajectory of a company than the 1000th or 1500th employees, who arrive once a company has momentum.

But in a gaming company, which by nature has lumpy and unpredictable revenues, a 500th employee is arguably equally capable of producing the next great multi-million or billion-dollar franchise as the 50th. So the reward structure has to reflect that. It probably has to differ from the large equity drop-offs that you would normally see between earlier and later employees in a typical venture-backed company. At this point, Zynga is going to have a hard time recruiting the best talent in the world given the layoffs, the present size of the company and the earlier PR nightmare it had with equity clawbacks.

Companies like Supercell are trying to fight this dynamic by building a strong culture that prizes talent and creative risk-taking. In their secondary round earlier this year, they gave all employees the opportunity to take roughly 16 percent of their stake in the company off the table.

The Exit Market

Lastly, it’s hard to read the tea leaves right now and understand whether the IPO market is just in a temporary lull for gaming companies, or whether there is something more long-lasting and structural at play.

Right now, it’s difficult to make the case for any freemium gaming company to go public unless they can prove they have a model that defensibly and reliably produces revenues and hits. With the decline of their player base on the Facebook platform, Zynga’s debut has damaged short-term IPO prospects for other gaming companies. Competitors like Kabam have released basic earnings figures to send a message to public market investors that the whole category isn’t bad.

But the two or three companies that might have a shot at an IPO have too short a track record. Supercell has two games, Candy Crush Saga-maker King only came to mobile platforms last fall and Kabam has been on iOS for a year and a half. The exit market for large acquisitions in the West is also quiet now as EA and Zynga go back to the drawing board, and Japanese companies like GREE and DeNA work through their last round of U.S. deals.

Public market scrutiny has also been tough for Zynga as it works through this transition. The amount by which their shares have sold off has to be intimidating for any gaming CEO considering listing in public markets. For a lot of companies that want to preserve their unique cultures like San Francisco-based midcore game maker Kixeye or Supercell, it just makes sense to stay independent and private for the foreseeable future.

So we’re looking at a host of companies that have stayed private, generate huge amounts of cash and may stay that way for awhile. What this means for investors and employees is that they’ll have to sit tight and wait for the M&A and IPO market to heat up again. Or financing will have to change, so that stakeholders can be rewarded in a different way.

There Are Still Believers, Though

To be fair, nine out of the top 10 grossing games in the U.S. iOS market today are from venture-backed or publicly-traded companies. Funding from top-tier firms does tend to go toward really good teams. Plus, with marketing and production costs rising, many gaming companies do need capital to start off.

Yet no money comes without strings attached. While Supercell is conscientiously trying to hold off the pressure to grow too fast, the investors who went in on the last round — IVP, Atomico and Index — are effectively betting that the company will be worth at least $2 or 3 billion some day. And Kabam, which has taken at least $125 million in funding, may be too large to be acquired at this point and may have to wait for the IPO market to clear.

But for gaming startups being founded today or for investors looking at the space, the market seems ripe to find new ways to fund creative talent.

Kids' Game Moshi Monsters Set To Leap Onto The TV Screen As Animated Series

Posted: 11 Jun 2013 02:50 AM PDT

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Mindy Candy, the U.K. company behind the hugely successful Moshi Monsters adoptable pet monsters kids game, is branching out into animation. Today it’s announced plans to make a series of 52×11 minute episodes based on the most popular characters from its Moshi world platform which is aimed at boys and girls aged 6-12.

The cartoons will be distributed on both linear and digital platforms, with no word yet where exactly they’ll be available for viewing. The company notes that its chief business development officer will be kicking off distribution discussions with “leading global broadcast networks” at Licensing Expo in Vegas next week.

Mind Candy said its executive creative producer, film & TV projects, Jocelyn Stevenson, will lead the production of the cartoons. Michael Acton Smith, founder and creator of Moshi Monsters, commented in a statement: "We're looking forward to telling a wide range of new stories with these cartoons and taking the Moshi Monsters characters to new fans all around the world.

Speaking to TechCrunch last month, the company also cited plans for a full-length movie featuring its characters but there are no more details on those plans as yet. Mindy Candy has already milked its five-year+ franchise, which has some 80 million registered users in 150 territories worldwide, with spin-off merchandising — including toys, books, trading cards, a magazine and a music album plus music videos.

Making a cartoon is a next obvious step for a kids-focused digital brand. Indeed, it’s rather surprising it’s taken Mind Candy so long. There have been similar moves recently from Angry Birds-maker Rovio, which launched Angry Birds Toons back in March, and youth-focused mobile messaging app Line which created the spin-off Line Town animated TV series for its home Japanese market. Line Town features the main characters from its messaging stickers, underlining how the lines between messaging, gaming and entertainment continue to blur.

BrickPi Is A Robotics Hacking Platform That Combines Raspberry Pi And LEGO Mindstorms

Posted: 11 Jun 2013 01:45 AM PDT

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DIY micro-robotics is having a moment. The latest project to take the crowdfunding route — via Kickstarter — to build out a platform for playing around with robotics is called BrickPi. As its name suggests, BrickPi is a mash-up of the Raspberry Pi microcomputer, co-opted to act as the brains of the robot, plus LEGO Mindstorms sensors, bricks and motors for crafting its working parts. Firmware is written in Arduino, making it open and hackable. Indeed, the BrickPi makers have put their hardware designs and software source code online for download on Github.

The BrickPi extends the Raspberry Pi with a board that snaps in place over the Pi to connect it to the various LEGO sensors (such as touch sensors, colour sensors and gyroscope). This is then contained within a plastic case that is compatible with LEGO bricks so it can act as the base for building out the robot. An on board battery connector allows the robot to be untethered from a power socket so it can go roving.

The BrickPi is the brainchild of educational robotics company  Dexter Industries which also sells sensors for LEGO Mindstorms. The Kickstarter campaign has five days left to run and is approaching $90,000 in pledged backing from more than 1,270 backers — hugely above the original (modest) goal of $1,889.

Going the crowdfunding route sounds like it was primarily about building a community and getting the word out for Brick Pi’s makers but they have added a series of stretch funding goals to explain what they plan to do with the extra money raised. These include adding more sensors and ports to the device and creating additional libraries (in C/C++, as well as the original Python libraries) to expand programming options.

“We have a lot of plans for the extra funds raised and they all include improving the user experience and opening up the BrickPi to a wider audience,” says Dexter Industries’ John Cole. ” That mostly means putting together some sharp tutorials, and putting together more examples.  In my humble experience, where a lot of technical projects like this go wrong is when they have only 2 or 3 example projects.  Adults can think of a lot of projects and interesting ways to use the product, but kids have trouble with it, get bored, and move on.”

The original goal of the funding campaign was to bring the cost of the BrickPi down to $35 — making it the same price as the Raspberry Pi. BrickPi also pledged to write a library for the Scratch programming language, itself developed for helping kids to learn how to code. With projects like this, and mOwayduino — another robotics platform in the making due to go the crowdfunding route shortly — hardware hacking for creatively minded kids has never looked so easy.
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