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  • Ron Paul Is On Quora Now

    ron paul

    Former Republican presidential candidate and Congressman Ron Paul has signed on to the question-and-answer service Quora. 

    On Wednesday, Paul posted answers to a pair of questions about his positions on marijuana and Bitcoin. 

    Paul responded to the question about marijuana by calling the American War on Drugs "outrageous." 

    "The drug war has never done anything good. It cost a lot of money, it was an excuse to violate the civil liberties of a lot of Americans, and it challenges the notice that people get to make their private choices. Even when there’s risk involved, government is meant to protect us from ourselves, government is meant to protect our liberties," Paul wrote. "When people have the right to make their own decisions, they should be responsible for all the actions they take. The drug war is a typical example of how the government is intending to make people better and once they do that they are getting into the business of removing personal liberty."

    Paul argued Bitcoin is not "true money," but he said the cryptocurrency should be "perfectly legal and there should be no restrictions on it, there should be no taxes on it." 

    Scott Stenholm, an executive producer at Paul's RonPaulChannel digital news network, confirmed to Business Insider that the posts on Quora were written by Paul himself.

    "We've been talking about it for a while," Stenholm said of Paul's decision to join Quora. "President Obama did it and some other high profile people. It seems to be getting a fast response. ... Ron wants to get the message out, so we thought it would advantageous."

    As of this writing, Paul has 195 followers on the site.   

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  • 11 Awesome Apps You Can't Get For Your iPhone Right Now

    tim cook sad

    Developers usually make apps for the iPhone first, which means updates for Android and other platforms can take a little while to get to users of those platforms.

    But there are quite a few awesome apps that Android owners can use that their iPhone-using friends can't.


    Hello SMS is a great app for sending texts.

    Hello SMS replaces the messaging app built into most Android phones. The app utilizes a tab system to organize chats so you can quickly alternate between conversations with a single touch. Time Stamps give you the ability to quickly respond to messages as well. Plus, you can send an assortment of emoji to spruce up a boring group chat.

    Price: Free

    Aviate emphasizes the "smart" in smartphones when it comes to apps.

    Aviate 's goal is to deliver you the right apps at the right time. The program learns your habits and can customize the apps on your screen for certain situations. When you wake up in the morning, Aviate can immediately deliver the traffic reports and reminders about calendar meetings right to your phone. 

    Price: Free

    Glove determines the best wireless carrier for you when you move.

    Glove is a useful app for picking out a wireless carrier when you move to a new city. The program runs for three days and figures out where you use your phone the most. After this testing period is over, Glove will analyze which carrier can be the best for you so you can get an excellent coverage plan. 

    Price: Free

    See the rest of the story at Business Insider


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  • Inside The Lab Where They Build Robots That Are Smaller Than Pennies

    Screen Shot 2014 04 16 at 10.24.18 AM

    Sarah Bergbreiter is an assistant professor of mechanical engineering at the University of Maryland, and she and her team build tiny robots.

    Just how tiny? Bergbreiter calls it "ant-scale," but said, "That's really just a PR term. Our robots are built on the millimeter scale, less than 1 centimeter."

    This all happens out of the university's Microrobotics Laboratory, where they develop technologies that aim to make tiny robots that not only function properly, but will one day be as handy and useful as large robots.

    "The immediate impact of this research is on the fabrication process," Bergbreiter told us.

    Small robots don't have nearly the capacity to carry around sensors and batteries that make robots conventionally useful. Consider the human-size Atlas robot by Boston Dynamics. At 6 feet tall and 330 pounds, it's more than capable of carrying powerful sensors and its own power supply. Bergbreiter and company don't have the luxury of working without such constraints, so they're constantly evaluating how to adapt larger-scale technologies for the smaller scale.

    Bergbreiter is focused on efficient robot movement, especially over rough terrain. We asked her if it's better for microbot locomotion to imitate nature or to aim for something totally new, and she says her team has tried both approaches. "Biology lets us look at solutions that exist in the natural world. We’re inspired by them, but we've also deviated significantly from nature to build robots that jump, for example."

    Over the next 10 years, techniques from UMD's Microrobotics Laboratory will lead to improvements in larger robots: "Actuators designed at a small scale can be into a larger scale system for more control than you would normally get," Bergbreiter told us.

    There may even be private business interest in such small-scale fabrication and actuation. "We're concerned with precision and low power. It's not all that different from what you'd want in a zoom camera."

    In the longer term, there's a lot of potential applications in the medical field. "By combining small actuation mechanisms with low power, we could stand to improve things like camera pills, or catheters," said Bergbreiter.

    Check out this great YouTube video from the University of Maryland's robotics department that gives us a look inside the Microrobotics Laboratory.

    Consider how agile small insects are — ants can move up to 40 body lengths per second, cockroaches can get into impossibly narrow places.

    Professor Bergbreiter's work aims to make similar behavior possible for robots of a similar size.

    Here's one such robot — a small six-legged creation that walks around under its own power.

    See the rest of the story at Business Insider


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  • Take A Look At The Office Where Reddit Employees Control The Front Page Of The Internet

    For such a well-trafficked site, Reddit keeps its number of employees relatively low and uses an unapologetically retro site design, yet it's a near-bottomless source of news and humor for the Internet-at-large every single day.

    The company doesn't have its own dedicated space, but instead operates out of a San Francisco co-working space that seems to mirror the positive, low-key vibe of the site.

    Reuters recently came through and took the some pictures of the Reddit workspace.

    A sign on the door warns of nerds who shouldn't be allowed to escape.


    Reddit's red-eyed alien mascot greets you when you walk in.


    These appear to be the previously mentioned nerds — Reddit employees pore over their computer screens.


    Reddit programmer Keith Mitchell works beside an image of the Reddit alien piloting a giant robot.


    The office is littered with images of the company mascot. Here's a large one:


    But there are smaller ones all over the place.


    Reddit saw 713 million unique visitors last year, and it did it all with a small team and alien mascots.


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  • Honda's Incredible Human-Like Robot Makes US Debut

    asimo honda robot

    It walks and runs, even up and down stairs. It can open a bottle and serve a drink, and politely tries to shake hands with a stranger. Meet the latest ASIMO, Honda's humanoid robot.

    "Hello New York! Thank you for coming today!" the little guy chirped in English, the recorded voice of a teenaged boy, at his US debut Wednesday in a Manhattan hotel.

    Resembling a tiny astronaut, ASIMO -- decked out in a white suit and helmet -- stands 4 feet three inches (1.3 meters) tall and weighs in at 110 lbs (50 kg).

    ASIMO -- short for Advanced Step in Innovative Mobility -- was designed to help people, potentially in cases of reduced mobility. The first model was unveiled in 2000 after 14 years of research during which scientists studied human movements in an effort to replicate them.

    The latest demonstration highlighted the robot's increased flexibility and balance -- ASIMO can now jump -- as well as sign language abilities. It can now also run at a speed of 5.6 miles per hour (9 km/h).

    Researchers think that one day it could help the elderly -- say by getting a snack or turning the lights off -- when their ability to get around is reduced.

    "ASIMO was designed to help those in society who need assistance, and Honda believes that these improvements in ASIMO bring us another step closer to our ultimate goal of being able to help all kinds of people in need," said Satoshi Shigemi, senior chief engineer at Honda R&D Co., Ltd. Japan responsible for humanoid robotics.

    "We need to understand what people expect from ASIMO and what people want ASIMO to do."

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  • Infants Are Unable To Play With Building Blocks Because They're Too Addicted To iPads

    children Steve Jobs netherlands classroom

    According to the British Association of Teachers and Lecturers, children who are 3 and 4 don't have dexterity in their fingers because they're too addicted to swiping tablet screens. 

    The children know how to use the devices, but they barely know how to play with actual toys.

    "I have spoken to a number of nursery teachers who have concerns over the increasing numbers of young pupils who can swipe a screen but have little or no manipulative skills to play with building blocks or the like, or the pupils who cannot socialise with other pupils but whose parents talk proudly of their ability to use a tablet or smartphone," said teacher Colin Kinney at the association's annual conference, according to The Telegraph.

    The Telegraph reports that in addition to this, the memory of some older children is deteriorating because of over-exposure to computers. According to one teacher, these children couldn't finish traditional tests using pen and paper. 

    Pew Research shows that one-third of Americans owned a tablet in 2013. And "among parents with minor children living at home, tablet ownership rose from 26% in April 2012 to 50% in May 2013."

    The National Association for the Education of Young Children says that "when used intentionally and appropriately, technology and interactive media are effective tools to support learning and development." But it also warns that exposure to interactive media should be limited, especially for young children.

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  • These Numbers Show That Box CEO Aaron Levie Is A Genius

    Aaron Levie

    When Box filed its long-awaited paperwork to become a public company, it caused a lot of talk about the financial health of the company, and the long-term viability of its business model.

    At issue was how much money Box is spending compared to its revenue, particularly on sales and marketing. People began wondering: is founder and CEO Aaron Levie a quack or a modern-day genius?

    Let me be clear: he’s a genius, and he’s not the only one.

    I’ve known Levie for six years, ever since Box became an early customer of my company, Zuora, and his company’s revenues were in the low single digits. I’ve watched with great pleasure as Levie, co-founder Dylan Smith and the team have grown Box into the force that it is today. He is the latest in a line of true entrepreneurs, laser-focused on making his vision of collaboration a reality. With over 34,000 paying companies across the globe including Bechtel, Eli Lilly, and Gap, it’s obvious that companies see the value of Box and trust it to power their businesses.

    But it’s crazy to me that 10 years after the IPO of Salesforce.com as the first public software-as-a-service (SaaS) company, Wall Street still doesn’t understand the subscription business model. The software industry has been on an inevitable path to subscriptions since 1999, when Salesforce was founded.

    Fast forward to today with Workday, Adobe, Box, Zendesk and others. These companies have proven that a subscription model with recurring revenue is a different kind of business. It’s complex. Yet, when managed well, it's a healthy and financially attractive model that has disrupted some of the most established industries across the globe.

    Even giant software vendors like SAP are now offering major products via subscription. And I assure you this is just the beginning.

    Why then, is there such controversy about Box? Forbes writer Kurt Marko recently questioned whether Box is a “viable standalone business,” pointing to that fact that operating expenses outweigh revenue and calling it “the beginning of the end.” Erik Sherman with CBS News claimed that Box “badly needs the money” and that “an IPO is necessary to bring in the capital needed for long-term viability.”

    It’s become apparent to me that there is a fundamental lack of understanding about the subscription business model, a term I call the “Subscription Economy.”

    In order to understand the true genius of Box, let’s look at the four big differences between the subscription model and a traditional software business.

    1. Subscription businesses care about a different revenue metric: ARR

    The first thing to know is that for a subscription business, revenue is not revenue. It’s the difference between a one-time payment and recurring payments.

    Just think about it — let’s say you have two friends: Jack says he’ll give you $10 just this once, and Jill says she’ll give you $5 a year for each of the next 10 years. There is a big difference between the two — you know that Jill’s deal is a better deal.  

    That’s why smart subscription businesses look at something called ARR, which stands for Annual Recurring Revenue, and consists of only the subscription revenue from customers for an ongoing service. To get at ARR, subscription businesses take the value of their subscription contracts, normalize it to an annual amount, and add it all up.  For a subscription business, more so than cash or revenue, ARR is the true indicator of your company’s health.

    But here’s the thing: accounting rules today don’t recognize ARR.

    In fact, accounting systems do not differentiate between a dollar that recurs and a dollar that does not. Accounting systems today are built on the double entry standard created 500 years ago by Luca Pacioli to help Venetian merchants track the sale of spices. And in that system, a dollar is a dollar is a dollar.

    Fortunately, there’s a simple way to approximate ARR from a standard income statement — just take the quarterly revenue, strip out non-recurring revenue such as setup fees or consulting fees, and multiply it by four.

    That will give you a close estimate as to what the ARR was as the start of that quarter.  (The sophisticated reader here will note that this doesn’t tell you what ARR is at the end of the quarter, and it doesn’t include revenue contributed from in-quarter bookings … but we’ll leave that for another time).

    In Workday’s most recent filings, for example, the company reported $141 million in quarterly revenue, of which $110.7 million was subscription revenue. By taking the subscription revenue and multiplying it by four, you can see that Workday likely started out that quarter with about $443 million in ARR.

    We’ve performed the same calculations for Workday (ticker symbol WDAY) ServiceNow (NOW), NetSuite (N) and Salesforce.com (CRM), below.

    Most recent quarterly ending Jan 31 2014 Dec 31, 2013 Dec 31 2013 Jan 31 2014
    Quarterly revenue $141 million $125 million $115 million $1,145 million
    % professional services 22.0% 16.3% 18.6% 6.1%
    Quarterly recurring revenue $111 million $105 million $93 million $1,075 million
    ARR (estimated) $443 million $420 million $374 million $4,300 million

    Now how about Box? Unfortunately, Box doesn’t actually break down how much of its revenue comes from subscription versus that which comes from professional services. We do know that professional services is less than 10% of the total revenue, otherwise it would need to present that separately from subscription revenue.

    We’ll make an educated guess that Box’s consulting revenue is in-line with Salesforce.com’s and plug in 5%. Based on that, we see that Box started its most recent quarter at $148 million ARR, double what they were at one year ago.  That’s pretty good growth.

      BOX BOX
    Most recent quarterly ending Jan 31 2013 Jan 31 2014
    Quarterly revenue $19.6 million $39 million
    % professional services (**) 5% 5%
    Quarterly recurring revenue $18.7 million $37 million
    Starting ARR (estimated) $75million $148 million

    (**) Our guess

    2. Well what do you know, it turns out cloud storage is not that expensive

    One common refrain I’ve heard from people is that Box’s costs must be high, since they are storing all those files and have to purchase so many disks. And they must be losing money because they give so much of storage per user.

    A look at Box’s gross margins shows a different tale.  

    But first, let’s do a quick Accounting 101 for the non-CPAs out there. In a SaaS company, there are really just three sources of costs: people, data center, and marketing. In the income statement, the part of Box’s S-1 filing causing the most comments, these costs are allocated into four key buckets:

    1. Costs of revenue, otherwise known as costs of good sold, which is how much you need to spend to actually provide the service.  In a SaaS company, this typically includes the data center, the hardware, the data center folks, customer support folks, etc.
    2. Research and development, this includes all the developers and product managers.
    3. General and administrative, this includes primarily the finance and HR folks.
    4. Sales and marketing, this includes the sales and marketing departments and supporting personnel, and any money spent on marketing programs.

    Take a look at what Box says goes into its costs of revenue:

    Our cost of revenue consists primarily of costs related to providing our cloud-based services to our paying customers, including employee compensation and related expenses for data center operations, customer support and professional services personnel, payments to outside infrastructure service providers, depreciation of servers and equipment, security services and other tools, as well as amortization of acquired technology.

    Now, most folks will take these cost buckets and map that to revenue to get a margin. Revenue minus costs of revenue, for example, is your gross margin.  We’re going to do something different and compare these costs to ARR.

    Why ARR?  Think about it — the great thing about ARR is that it’s a forward-looking metric — ARR very closely approximates what you expect to make this upcoming quarter, compared to revenue which tells you what you already made last quarter.

    If you are Levie and Smith, and you know what your ARR is at the start of the quarter, you can make some smart decisions on how you want to spend that money. Comparing expenses to ARR better approximates how the executives in the company actually think and run their businesses.

    To do this accurately, you have to take out the cost of goods sold that are tied to the professional services, and you have to take out the stock option expenses that are reported in the filings. That’s why we call this a Gross Recurring Margin, vs. just a Gross Margin.

    Here are the numbers we calculated:

    Most recent quarterly ending Jan 31 2014 Jan 31 2014 Dec 31, 2013 Dec 31 2013 Jan 31 2014
    Estimated ARR at the start of the quarter $148 million $443 million $420 million $374 million $4,300 million
    Costs of Sales (annualized) $31 million $76 million $94 million $55 million $743 million
    Gross Recurring Margin 79% 83% 78% 85% 85%

    As you can see, Box’s gross margins are in line with others in the SaaS industry.  It actually doesn’t cost that much to offer storage in the cloud.

    3. Recurring Revenue Margin: The Real Story

    At the heart of financial accounting is the concept of matching.  When $1 is shown on the income statement, it shows the amount of costs of goods sold, sales and marketing, R&D and G&A (general and administrative) that went into making that one dollar.

    Unfortunately, the whole concept of matching starts to break down for subscription business models. That's because ARR represents revenue acquired in previous periods, which are simply now renewing.  Sure, you need to service the customer, so cost of goods and G&A is to service the customer and does match to the ARR.  

    How about R&D?  Well, the traditional view says the products you are selling today are already done, and you are investing in research to create innovations that drive future sales. But here’s the thing -- the customers of SaaS companies did not sign up for a static service that never gets better. If you know something about SaaS companies, they are obsessed about keeping their customers happy, to keep them buying the service, and they invest in R&D against that goal.

    At Salesforce, we started naming releases with the seasons, for example the “Winter 2013 release,” to convey the constant rate we expected to add enhancements to the products. That’s why I like to think of R&D as being matched to ARR.

    Sales and marketing is where it gets interesting. If your ARR represents today’s revenue that you expect to recur, then your spend on sales & marketing is going towards growing ARR, to acquiring future revenue that is not yet in ARR. In other words, today’s sales and marketing expenses are matched to future revenue.  

    (In accounting lingo, sales and marketing acts more like a “capital expenditure”, or capex for short. In the old manufacturing world, you invested in a big factory to build a bunch of widgets, and you spread the cost of that factory out over time as you made and sold those widgets over time. That would be depreciation of course. In the subscription economy, you invest in sales & marketing to acquire customers, and you recognize revenue from those customers over their lifetime, which often can be 3, 5, 10 years or more. However, accounting rules today do not let you spread or depreciate sales and marketing costs over time.)

    That’s why we like to look at something we call Recurring Revenue Margin, which is your ARR minus your cost of sales, research and development, and G&A, but before the spend on sales and marketing.  

    Most recent quarter ending Jan 31 2014 Jan 31 2014 Dec 31, 2013 Dec 31 2013 Jan 31 2014
    Estimated ARR at the start of the quarter $148 million $443 million $420 million $374 million $4,300 million
    Costs of Sales * $31 million $76 million $94 million $55 million $743 million
    Research & Development * $51 million $184 million $75 million $73 million $576 million
    General & Administrative * $36 million $59 million $53 million $40 million $549 million
    Recurring Revenue Margin 20% 28% 47% 55% 57%

    * Quarterly numbers annualized

    When you look at Box’s business from a recurring revenue margin viewpoint, you see they are running a profitable business. If Box stopped all sales and marketing today, it wouldn’t grow any more, but it would have an intrinsic 20% margin business. Now, Box isn’t as profitable as Salesforce or Netsuite, yet, but when you look at Box’s recurring revenue margin over the last four quarters (below), the trend isn’t bad.  

    Quarter ending Apr 30 2013 Jul 31 2013 Oct 31 2013 Jan 31 2014
    Estimated ARR at the start of the quarter $89 million $108 million $128 million $148 million
    Costs of Sales $17 million $22 million $27 million $31 million
    Research & Development $35 million $41 million $45 million $51 million
    General & Administrative $30 million $33 million $35 million $36 million
    Recurring Revenue Margin 8% 11% 16% 20%

    You can see that Box and Workday are spending in research & development.  Why is R&D spending so high?  I would speculate that this is Levie betting on the future -- Levie likely believes he has a big market that is growing fast, and he needs to invest in R&D with more features to outpace Dropbox or Microsoft's SharePoint product.

    4. The Genius of Going for Growth

    So what have we established so far?  Subscription businesses really care about recurring revenue, which is measured by ARR.  On an ARR basis, Box is a fast-growing SaaS companies today. On a gross margin basis, it doesn’t cost Box too much to offer storage in the cloud, and on a recurring revenue margin basis, Box is building an inherently profitable business.

    The last thing to look at is where all the controversy lies. On his blog, Tomasz Tunguz notes that:

    Box spends about 137% of their revenue on sales and marketing. This sales and marketing expense figure is 3x the average of 42% of revenue found across all other publicly traded SaaS companies at this point in their lifecycle. The next closest comparable is Cornerstone-on-Demand which spent 86% of revenue dollars for sales and marketing. Of the remaining 18 companies in the data set, no other firm exceeded 62%.

    Let’s take that again. Box is spending more money on sales and marketing than it has revenues, 3 times more than its peer group, and over 50% more than the #2 spendthrift on the list.  I see the Box billboard every day when I drive down Highway 101. So what is Levie getting for all that money?  Let’s take a look.

    Quarter ending Oct 31 2013 Oct 31 2013 Sep 30 2013 Sep 30 2013 Oct 31 2013
    Estimated ARR at the start of the quarter $128 million $399 million $372 million $343 million $4,018 million
    Estimated ARR at the end of the quarter $148 million $443 million $420 million $374 million $4,300 million
    ARR Growth $20 million $44 million $48 million $31 million $282 million
    Sales & Marketing Spend $46 million $56 million $50 million $50 million $570 million

    In the quarter ending Oct. 31, 2013, Box spent $46 million in sales and marketing to grow ARR by $20 million, net of churn. That means he spent over $2 to acquire $1 of growth.  Compared to other public SaaS companies, that’s on the high side, although if Box expects that $1 to recur for the next 5 or 10 years, that’s still a pretty good deal.

    Has Levie built a house of cards, one that requires more and more money to fuel, but that ultimately will fall apart when the music stops?  

    I don’t think so. I see a person who, by the age of 28, has convinced some pretty big names in the investment community to give him over $400 million dollars to go after a once-in-a-lifetime opportunity.

    That’s pretty amazing in and of itself. But that’s not all. Levie then built a business with strong fundamentals that is intrinsically profitable, if looked at in the right way.

    Finally, by recognizing that he’s in a land grab in a fast growing market with multiple players, Levie is showing he has the courage to bet big and spend big to acquire as many customers as he can.

    What if one day Levie decides that he’s won, that he sees the market for cloud collaboration slowing, and he’s the clear market share leader? At that point, if he cuts R&D back down to 15%, and sales and marketing down to 15%, he’ll have a 25% margin business.  If he’s a $1 billion company at that point, that means he can throw off $250 million in cash.

    If he can grow that into a $10 billion company, he’s throwing off $2.5 billion in cash. That’s a great business. And that’s the genius of Aaron Levie.

    Tien Tzuo is the founder and CEO of Zuora, a cloud service founded in 2007 that provides accounting and billing services for other cloud computing companies. Before Zuora, Tzuo spent 9 years at Salesforce.com where he was employee No. 11 and its former Chief Strategy Officer.


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  • Why New Housing Alone Won't Fix What's Wrong With San Francisco

    san francisco google eviction protest

    It's not hard to understand why housing prices keep going up in San Francisco.

    In simple terms, more people want to live in San Francisco than the current amount of housing can support.

    When there's higher demand for something than what the supply can fulfill, prices go up.

    Last week, we wrote about the fact that much of San Francisco is zoned for buildings shorter than 40 feet — with many areas not even developing to that limit — and provided some of the historical factors that have made things that way.

    One of the major factors contributing to the severely insufficient housing stock has been the lack of upward development: Taller buildings would mean more housing for the limited amount of space available. 

    But as Kim-Mai Cutler details in an extremely thorough story on TechCrunch, there are myriad other issues that have contributed to the current crisis of rising rents and gentrification. 

    According to several influential progressives in the area who were cited in the piece, these factors have made it so that almost no amount of new housing could make enough of a dent to bring down housing prices.

    Calvin Welch, a member of the Council of Community Housing Organizations and the Haight Ashbury Neighborhood Council, wrote a paper in October explaining why new housing units won't necessarily bring down rent like you'd expect from a simple analysis of supply and demand.

    His primary points are that limited land ("of the city’s 47 square miles, only 13 square miles [are] available for housing uses, the rest [is] being used for streets, schools, parks, beaches, office building, shops, hotels, conventioncenters, hospitals, police and fire stations, " he notes) and speculation by cash-flush Wall Street investors buying up property have made it so that no matter how much housing is built, housing prices will still increase:

    In June 2013, the SF Chronicle reported that speculators (or “investors” as the Chronicle calls them) using “all cash” made up nearly a third of all buyers in the Bay Area. The whole point of this speculation in housing is to buy cheap and sell dear, thus driving up prices. Speculators exert tremendous “market power” on prices. The New York Times recently reported that a large portion of these “all-cash” buyers are Wall Street based with huge “portfolios” willing to suck up any number of housing units no matter how many are produced.

    There are some weak points to his logic. He argues that falling housing production in 2001-2002 and 2008-2009 made housing prices fall, when in actuality those were recessions. In both cases, people lost their jobs, couldn't afford "as much" housing (moving to less space or less desirable locations), and developers cut production because it wasn't worth the investment, as we saw in housing markets across the nation.

    He also says that because of the fact that prices rose in years of high housing production, the argument that more housing can help affordability is bunk. The thing is, he didn't take into account how quickly people are moving to the city.

    Between 2010 and 2013, the population of San Francisco grew by more than 10,000 people each year according to estimates by the U.S. Census Bureau. Housing units under development went from 4,220 in 2012 to more than 7,000 in 2013. Fewer new housing starts than people entering the city means that the rest will have to compete for existing housing stock — driving prices up further.

    But overall, he has a point. There's a limited amount of space available for development in San Francisco; a huge portion of the development going on over the last few years has been aimed at the high end of the market. 

    san francisco housing tweetIf that trend continues, it's inevitable that lower- and middle-income residents will be priced out of the market.

    So what does Welch recommend to keep that from happening? 

    Basically, rent control and public housing. While rent control is helpful in the immediate sense — it means that a person with a wage that isn't shooting up by the year can stay in their home — but there's the downside for landlords: Property values keep rising, which means tax bills go up. If they can't collect more rent, that's income out of their pocket. I'm not saying either side has the absolute answer in this situation, but it is a reason for political conflict.

    Public housing, on the other hand, is incredibly expensive. As Tim Redmond noted on Monday, there's about $800 million spent on housing subsidies in the Bay Area, and current funding is several hundred million dollars short of what current public housing development proposals have suggested. That money has to come from somewhere — again, something that's going to be fought by whomever ends up having to pay higher taxes.

    A middle-of-the-road solution is mandating affordable housing from developers. For instance, San Francisco Board of Supervisors representative Jane Kim has put forward legislation mandating that new housing developments in the South of Market area include 30% affordable housing units. 

    The plan could actually put developers and rent control advocates on the same side. Tim Redmond writes:

    In theory, that would encourage developers to side with tenant advocates protecting existing rent-controlled housing — because if you evict tenants and remove housing from the rent-controlled stock, it skews the 70-30 ratio and would make new market-rate developments more difficult.

    To sweeten the deal, Kim has said that she's open to adding incentives for developers. As the SF Gate's Marisa Lagos reported last week, those incentives could include  a "density bonus" — which would let developers build even higher if they included more affordable housing — or a "dial" system, which would let developers build especially affordable housing but included fewer units.

    The biggest argument over mandates is the ratio of affordable housing to total growth. Is 30% too low? Too high? That's likely to be subject to a lot of argument as similar proposals are put forward in other areas.

    SEE ALSO: This one intersection explains why housing is so expensive in San Francisco

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  • Proof That Netflix Is Destroying Cable TV

    A new report from consumer data company Experian suggests that online video content services like Netflix are pulling people away from cable television.

    After surveying more than 24,000 U.S. adults, Experian found that households with a Netflix or Hulu subscription were nearly three times as likely not to have a cable subscription than the average household. In total, 6.5% of Experian's surveyed households did not subscribe to cable in 2013, up from 4.5% in 2010.

    But cord-cutters became 18.1% of Netflix subscribers, up from 12.7%. Cord-cutters are three times as likely to be Netflix subscribers than the average consumer, in other words.

    Experian chart on cord-cutters

    "We had looked at cord-cutting as a trend in years past, but we hadn’t really seen significant movement in the space because it was more a small group of people who were actually cutting the cord," Experian senior marketing manager John Fetto said. "It’s become something people are actually doing from something that was just being talked about in New York Times trend pieces."

    Traditional television companies like NBC and CBS receive licensing fees from Netflix and Hulu for their content, and Hulu is a joint venture owned by three of the major broadcast networks.

    However, the licensing fees and advertising revenues made online still pale in comparison to the money the networks take in from the distribution fees paid by cable operators, to say nothing of the $60+ billion U.S. television advertising market.

    Experian found that while a surprising 42% of adults watched video content on their smartphones during a typical week, the real backbreaker for cable companies was when would-be subscribers were able to stream video content to their televisions.

    According to the report, people who watched streaming video on the big screens of their televisions were more than three times as likely not to subscribe to cable. People who said they stream video to their smartphones and tablets were only 1.5 times as likely not to have cable.Cord-cutting table 2

    "We would have thought that you can basically watch video on any device, but it really appears that the tipping point is whether they’re actually streaming content to their televisions," Fetto said. "Having access to on-demand video when they want it without sacrificing screen size seems to be the real thing that makes a difference for them."

    SEE ALSO: TV Is Dying, And Here Are The Stats That Prove It

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  • Mary Meeker's Awesome Presentation On The State Of The Web … From 1996!

    Mary Meeker

    Every year, Kleiner Perkins partner Mary Meeker puts together a presentation on the state of the Web.

    Meeker is a former analyst for Morgan Stanley, and her decks are always a handy guide to where things are going. 

    So, when a source told us he had a copy of Meeker's first report on the Internet — from way back in 1996 — we begged him to send it.

    Unlike Meeker's decks, "The Internet Report" is a 322-page text-heavy PDF.  

    We've gone through it, pulled all the charts, pulled some quotes, and re-arranged it all into a Meeker-style deck — one from 1996.

    See the rest of the story at Business Insider


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  • Yahoo Co-Founder Nominated To Company's Board After 18-Year Absence

    Jerry Yang and David Filo, from Flickr: http://bit.ly/6MJbOC

    SUNNYVALE, Calif. (AP) — Yahoo co-founder David Filo is vying to rejoin the Internet company's board after an 18-year absence.

    The 47-year-old Filo is among three board candidates hoping to be elected at Yahoo's annual meeting scheduled for June 25. Yahoo Inc. disclosed the candidates to fill recently vacated positions in a regulatory filing Wednesday.

    The other nominees to the board are Charles Schwab, the founder of a stock brokerage that still bears his name, and H. Lee Scott Jr., the former CEO of Wal-Mart Stores Inc. Yahoo Inc. CEO Marissa Mayer is on Wal-Mart's board.

    Filo started Yahoo with Jerry Yang in a trailer while they were Stanford University graduate students in 1994. Although he gave up his seat on the company's board in 1996, Filo has remained among Yahoo's largest shareholders.

    SEE ALSO: Here's What Yahoo's Marissa Mayer Earned Last Year

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  • German Media Mogul: I'm Afraid Of Google

    Dr. Mathias Döpfner, Mathias Dopfner

    BERLIN (AP) — The head of Germany's biggest media company says he is afraid of Google and wants the company to become more transparent.

    Mathias Doepfner, the chairman of Axel-Springer SE, accuses Google of abusing its dominance in the field of online search to squeeze out competitors.

    His comments, published Wednesday by German daily Frankfurter Allgemeine Zeitung, come a week after Google chairman Eric Schmidt accused European publishers of stifling innovation.

    Doepfner said companies like his have no choice but to cooperate with Google even as they fight legal battles against the Internet giant, because not doing so could spell the end of their business.

    SEE ALSO: Google Warns: We Are Scanning Your Email

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  • Instagram Might Give Away Your Account Handle Without Telling You First If You're Inactive For Too Long

    girl taking selfie

    Today, an interesting post on Medium brings to light a warning for all Instagram account holders: If you let your account remain inactive for too long, your handle could be given away — and you might not get any notice ahead of time. 

    On Medium, Brian Hoff wrote that he and his wife first discovered something strange a few months ago when Brian tried to tag his wife in a photo and the account name appeared as "__kathleen" instead of "@kathleen." 

    Although Hoff admits that his wife was "not a regular on the service anymore," she still tried to reach out to the company via its @InstagramHelp Twitter account to see if the difference might be because of a security issue. TechCrunch's Sarah Perez interviewed Brian and he said that his wife also emailed the company at contact@instagram.com.  

    Then, earlier this morning, Kathleen Hoff tried to log in to her account to see a picture that her husband had posted, and she could no longer log in. Her @Kathleen handle had been given to another Kathleen, whom Hoff realized was an Instagram employee. 

    Hoff isn't accusing the Instagram employee of stealing the account, but he does complain that the lack of response from Instagram when he and his wife were looking for support (and that the company didn't try to notify her before giving away her handle) was unfortunate. He wrote that he thinks that the communication issue is a result of the Facebook acquisition. 

    In the end, however, Kathleen Hoff ended up getting the account back from Instagram.

    We reached out to the company, and here's what it said:

    Like many social services, Instagram has a policy of reassigning usernames from accounts that have been inactive for a significant length of time. While the policy is standard practice and will continue, Instagram employees strive to always put members of the Instagram community first, and so we will be returning the name to the previous owner.

    Instagram isn't the only company that reassigns inactive usernames. In fact, most do. What remains in question, however, is actually how long a "significant length" of time is. Hoff told TechCrunch that his wife wasn't an active poster, but that she would occasionally log in and view photos using her account. Instagram's definition of "inactive" isn't just hinged on uploads — to be inactive, users aren't even logging in — so either Hoff was stretching the definition of "occasionally," or Instagram doesn't wait all that long. 

    Regardless, this story should serve as a reminder to users: If you want to keep an account, you should actually use it. 

    SEE ALSO: The most outrageous things we learned about the CEO of Zappos from his Playboy interview

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  • Dating App Zoosk Files For A $100 Million IPO, And It Has Some Impressive Revenues

    Online dating app Zoosk filed its S1 to go public today. It's trying to raise $100 million.

    Zoosk is one of the most popular social networking apps in Apple's App Store. It's also one of the top grossing. The app is free, but gets money from subscription fees and other online payments within the apps.

    The revenue numbers are pretty impressive and seem to be growing nicely year over year. It generated over $178 million in 2013, up from $109 million in 2012. But it did have a net loss of $2.6 million in 2012. Zoosk says it has 25 million members, which includes 650,000 paying subscribers.

    Here's a breakdown of the company's financials from the S1. Click for a larger view:

    zoosk files ipo financials

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  • Marissa Mayer Is Trying To Woo Apple Into Making Yahoo The Default Search Engine On The iPhone

    marissa mayer

    Yahoo CEO Marissa Mayer is trying to convince Apple to make Yahoo the default search engine on the Safari browser on iPhones and iPads, according to Re/code's Kara Swisher.

    Right now, Google is the default search engine, but users have the option to switch to Microsoft's Bing or Yahoo. Siri, the voice-powered digital assistant for iPhones and iPads, uses Bing as its default search engine, but users can't change that.

    Yahoo already has a cozy relationship with Apple and the iPhone. Both the Weather and Stocks apps use Yahoo data. Siri also uses Yahoo for sports scores and stats.

    Meanwhile, Apple has been slowly stripping out all things Google from the iPhone. It removed the native apps for Google Maps and YouTube in 2012, for example. You now have to download those as separate apps.

    Get more details on Re/code >>

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  • Here's What Yahoo's Marissa Mayer Earned Last Year

    Yahoo CEO Marissa Mayer made $25 million in total compensation last year, down from the $37 million package she got the year before.

    A big chunk of her compensation came from a make-good bonus to compensate her for money she lost by leaving Google to go work at Yahoo, and as a retention bonus that vests over a five-year period.

    Former COO Henrique de Castro got $11 million, down from $40 million. He basically earned $50 million for 15 months' work before exiting the company earlier this year.

    Yahoo's investors did well in the year. The stock went from $15.78 to $40.44 in the period.

    Here's the comp chart (click to enlarge):


    SEE ALSO: Yahoo's COO walks out with $20 million stock bonus (plus $40 million for just 15 months' work)

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  • These Charts Explain Why Google Missed, Sending The Stock Tanking (GOOG)

    Google's stock declined more than 5% in after-hours trading when the company disclosed in its Q1 2014 earnings less revenue than analysts expected and less profit on the bottom line, too.

    This chart explains, in part, what went wrong. Revenue was down sequentially in its core business:


    Search ads are Google's core business. And while ad dollars always decline in Q1 compared to the holiday shopping season in Q4, Google's sales have usually been flat or up. This quarter, you can see that Google's total revenues declined between the quarters. Most worryingly, they declined inside its core search ad business.

    What's driving the decline? It looks like paid click growth is not as strong as it used to be. Google used to get an increase of 30% in the aggregate number of paid clicks every quarter. This quarter, that growth declined to just 26%, near the levels it saw during the recession. This chart from Jefferies shows that a 26% growth rate (the blue line) would be below much of its historic growth:


    The cost per click growth was roughly the same, a decline of 9%. At base, Google needs the blue line to go up as the red line stays in negative territory. If the blue line sinks to meet the red line, then that shows Google's search ad revenues are decelerating — which is bad news for Google.

    That is what appears to have happened this quarter.

    Interestingly, that decline in the total dollar numbers of paid clicks came as search traffic on Google appears to have reached a bit of a plateau. Here's another chart from Jefferies showing that:


    Bottom line: Google isn't in decline, obviously. But it does appear that there are limits to the speed of its growth. At least one analyst talked about "deceleration" on the call, and chief business officer Nikesh Arora talked about mobile ads — which are cheaper — being undervalued in the short term. Google has been having this debate for years now, but advertisers have not been bidding up the prices of mobile ad clicks.

    So, perhaps, there are limits to Google's search ad growth after all.

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  • 12 Simple Tricks For Saving Time On Email

    laptop google

    Office workers spend about two hours a day on email.

    Cal Newport, author of "So Good They Can't Ignore You," argues that this is terrible for your career.

    While sending emails might feel productive, he says, it doesn't help you grow your professional skill set.

    With that in mind, we gathered these time-saving hacks.

    To stop typing the same thing all the time, use "canned responses" in Gmail.

    If you're always sending the same email — your address, your elevator pitch, your availabilities for the week — then craft a few canned responses in Gmail and dish them out quickly.

    To do so, open Gmail, click on settings, click on Labs, then "canned responses," and then click enable. Or watch this sweet walkthrough, care of blogger Amy Lynn Andrew.

    To avoid unnecessary emails, send a text, IM, or just walk on over.

    Productivity consultant Jason Womack says to find a way to "escalate high-priority messages" with your colleagues.

    If a matter is both urgent and important — and there is a difference — use a different medium than email, like instant message, text, or just walking over to their desk. While emails get lost in a pile, a tap on the shoulder is hard to miss.

    Use "the Email Game" to hustle through your messages.

    The Email GameIf you want to have some fun and increase your pace as you churn through your inbox, play the Email Game, which turns sorting through emails into a type-as-fast-as-you-can web game. When you open up the Email Game, it syncs with your Gmail. It opens up one message at a time, which you deal with right away and then click onto the next one, all in a race against time. Productivity guru Tim Ferriss swears by it; he says it doubles his inbox-cruising speed.

    To slow down the pace of incoming messages, get rigorous about unsubscribing.

    If most of your messages are spam or unread newsletters, get rid of them. How? Set a filter for the word "unsubscribe" — which should catch all those unwanted mass mailings — and archive all that stuff immediately. This way you're not actually unsubscribing to the emails, which might have searchable value down the line, you're just shoveling them into a folder.

    To sprint through your inbox like an Olympian runs a race, get to know how your email client works.

    Business Insider has done a lot of the work for you; watch this video on mastering Gmail or this rundown on Outlook productivity hacks.

    To compress your inbox for speed, stop using your email as a to-do list.

    Using your inbox as a to-do list is dangerous. Any email you don't act on immediately will get pushed down to the bottom of your inbox by the end of the day. For a better to-do list, try Any.do or Trello.

    To aid with sorting the good from the bad, enlist some algorithmic help.

    When Harvard Business Review editor Sarah Green set out on a quest to conquer her inbox, she realized she was relying too much on herself.

    "I stopped expecting a human brain to solve a problem created by technology," she writes. "I used to feel bad — really bad — when important emails would get lost in the impenetrable wall of unimportant near-spam that took over my inbox every day."

    She opted for SaneBox, an algorithmic filtering app that learns what your most important messages are. Those are guided into your now-tidy inbox, while the filtered-out emails are filed away into a "SaneLater" folder.

    To keep yourself from getting overwhelmed, make a careful routine.

    Some of the greatest artists have had rigorous daily routines. LinkedIn CEO Jeff Weiner shows a similar commitment to sculpting his days — how else could he communicate in a 4,300-person company? As he shared on a LinkedIn post, the routine goes like this:

    Wake between 5am and 5:30am; spend roughly an hour on my inbox; catch up on the day's news; have breakfast and play with the kids; workout; go to the office; carve out roughly two hours for buffers each workday; come home; put the girls to bed; have dinner with my wife; and then decompress, typically while watching tv (sporadically cleaning up my inbox via mobile during commercials and the boring parts of whatever we're watching.)

    When days get particularly hectic, Weiner says he loses the routine and consequently loses control of the inbox. Thus the importance of forming a habit that sticks.

    To save clicks and keystrokes, use keyboard shortcuts.

    For example, on Gmail, via Business Insider:

    • (Ctrl + Enter) to send message.
    • (Ctrl + .) to move to the next window.
    • (Ctrl + Shift + c) to add Cc recipients.
    • (Ctrl + Shift + b) to add Bcc recipients.

    (Swap Ctrl for Command if you're using a Mac, and the same keystrokes will work.)

    On Outlook.com, via CNET:

    • (R) to Reply
    • (Shift+R) to Reply all
    • (Shift+F) to Forward
    • (F7) to Check spelling

    To make emailing on a smartphone faster, use Mailbox.

    When Mailbox founder Gentry Underwood was first drawing up the app, he realized that most mobile email clients were clunky ports of desktop experiences. So Mailbox redesigned the inbox for mobile friendliness. Unwieldy email threads get condensed down into chat-sized bubbles. Messages get archived with a swipe of a finger. To see more, watch this:

    To avoid unnecessary work, quit with the filing system.

    Gmail and other clients allow you to set up filing systems to allow users to better organize their inboxes. But it can just get in the way.

    "Email folders are categorically the worst way to look for email messages," says Alex Moore, CEO of the email management service Baydin, the company behind the Email Game.

    A folder system is self-defeating, he says, because even if you make a bunch of great folders, you might not recall where you put a given message. A search is way faster.

    To save you time and get your messages read, write shorter subject lines.

    Marketing company Retention Science did an analysis of email replies and found that "emails with subject lines containing six to 10 words were the most effective at getting the recipient to open them up."

    As we've reported before, there's a science to subject lines.

    SEE ALSO: 15 Tips For Writing An Excellent Email Subject Line

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  • This Genius Door Handle Could Help Stop Doctors From Spreading Dangerous Bacteria

    Nurse using hand sanitizer door handle

    Hospitals aren't always safe places.

    In 2011, more than 700,000 people got an infection while they were in a U.S. hospital, according to a study released this week by the Centers for Disease Control and Prevention. That's one out of every 25 patients. Approximately 75,000 of those patients died during their hospitalization.

    That's actually an improvement since 2002, but there's clearly far to go. One simple and effective way to help stop these infections is better hygiene.

    But since hand sanitizer dispensers and hand-washing stations all over hospitals are too frequently ignored, a British studio named Agency of Design has come up with an elegant solution — a sanitizer dispenser that can be fitted to door handles, as shown on Wired.

    Here's how they see it working:

    hand sanitizer door handle.gif"We wanted to make the interaction as simple as possible, trying to make it almost subconscious," Agency of Design co-founder Rich Gilbert told Wired.

    By connecting the sanitizer to a door that someone is already passing through, using it can become a habit, a natural step. "You're already holding it, so you might as well use the other hand to dispense sanitizer," Gilbert said.

    The handles, designed for Altitude Medical and named PullClean, will cost $200 and will start shipping later this year.

    They'll have an additional feature to help hospital administrators out: sensors connected to a web application, which will report how frequently sanitizer is dispensed, compared to how frequently the doors were opened.

    Here's a video from Vimeo by Agency of Design that shows how easily germs can be picked up, and how the device will work:

    PullClean from The Agency Of Design on Vimeo.

    SEE ALSO: In Our Post-Antibiotic Future, Almost Anything Could Kill You

    BAD BACTERIA: 'Nightmare Bacteria' Kills Up To Half Of Infected Patients

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  • The Death Of The PC Market Is A Huge Problem For Intel (INTC)

    This chart from Statista shows how Intel's business is tied to the PC industry. This shows Intel's revenue growth versus PC shipment growth, as measured by Gartner. This chart isn't too shocking, but it does a good job of illustrating the problem Intel has to solve as the world moves to tablets and smartphones. 

    Intel Chart of The Day

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  • IBM Falls After Missing On Revenues

    Virginia Ginni RomettyIBM just posted its first-quarter earnings and we're covering live.

    The company reported earnings at $2.54 per share, exactly matching analysts' consensus estimate of $2.54 EPS.

    Revenues were $22.48 billion, slightly below the $22.8 billion expected by analysts.

    In a press release, IBM CEO Ginni Rometty acknowledged the company's transformation:

    In the first quarter, we continued to take actions to transform parts of the business and to shift aggressively to our strategic growth areas including cloud, big data analytics, social, mobile and security.

    As we move through 2014, we will begin to see the benefits from these actions. Over the long term, they will position us to drive growth and higher value for our clients.

    Looking forward, the company expects operating (non-GAAP) earnings per share of at least $18.00 in 2014.

    One point of note from the company's earnings press release was this bit on IBM's performance in what it considers its growth markets:

    Revenues from the company’s growth markets decreased 11 percent (down 5 percent, adjusting for currency). Revenues in the BRIC countries — Brazil, Russia, India and China — decreased 11 percent (down 6 percent, adjusting for currency).  

    IBM's stock was down around 3.5% in after-hours trading.

    Here are more details from the press release:

    Diluted EPS:

       - GAAP: $2.29, down 15 percent;

       - Operating (non-GAAP): $2.54, down 15 percent;

    Net income:

       - GAAP: $2.4 billion, down 21 percent;

       - Operating (non-GAAP): $2.6 billion, down 22 percent;

    Pre-tax income:

       -  GAAP: $3.0 billion, down 17 percent;

       -  Operating (non-GAAP): $3.3 billion, down 19 percent;

    Gross profit margin:

       - GAAP: 46.9 percent, up 130 basis points;

       - Operating (non-GAAP): 47.6 percent, up 90 basis points;

    Software up 2 percent as reported and adjusting for currency

    Services down 2 percent; up 2 percent adjusting for currency and excluding divested customer care outsourcing business

    Global Financing up 3 percent, up 6 percent adjusting for currency

    Systems and Technology down 23 percent as reported and adjusting for currency;

    Services backlog of $138 billion, up 1 percent adjusting for currency and excluding divested customer care outsourcing business;

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  • Google Misses On Earnings And The Stock Is Falling (GOOG)

    Larry Page and Sergey Brin Google Co-Founders Portrait Illustration

    Google just reported its first-quarter results for 2014, with revenue of $15.4 billion and earnings per share of $6.27.

    Google missed on both its top and bottom lines, which is likely what quickly drove the stock down immediately about 6%. Google had previously closed up 3.75% at the closing bell.

    During the first quarter, Google's cost-per-click, the average price it charges advertisers, declined about 9%. Paid-click growth increased, but by only 26%. Historically, it's been up about 30% in good quarters

    In other words, the growth in aggregate paid clicks on Google search ads is slowing. Analysts noticed that, and began asking about revenue "deceleration" on today's conference call. That's a dread word at Google, which first discussed the previously unthinkable notion that Google might not continue growing at breakneck pace forever in November 2012.

    Analysts were concerned about the bottom line too. Google CFO Patrick Pichette and Nikesh Arora, Google's chief business officer, got a bunch of questions about why Google's margins were smaller than usual.

    Basically, there were a bunch of one-off costs in the quarter, the pair said. Nest — the trendy thermostat company — was an unusually large acquisition, and there were some legal costs too.

    Here are the key stats:

    • revenue: $15.4 billion vs. analysts' estimates of $15.54 billion 
    • adjusted EPS: $6.27 vs. analysts' estimates of $6.44
    • revenue ex-TAC: $12.19 billion vs. analysts' estimates of $12.25 billion

    Here is how the revenues look in a chart:

    google quarterly revenuesHighlights from the conference call:

    Google's CFO, Patrick Pichette, and Nikesh Arora, Google's chief business officer, led the call.

    Pichette started with the numbers.

    Consolidated revenue grew 19% year over year. Minus currency fluctuations, Google sales would have been up 21%. TAC was 23% of total ad revenue. Pichette blamed extra costs such as acquisitions hurting the bottom line.

    Starting in the second quarter, Google will begin disclosing paid clicks and CPC growth by property. 

    Pichette talked about Google Play:

    More than 65 countries can now watch movies through Google Play. Arora also said that Google now has 49,829 full-time employees as of March, up from 47,756 in December. 

    Highlights from the Q&A section: 

    Expenses and the Nest deal:

    Expenses in the quarter involved a lot of legal expenses and mergers and acquisitions. Pichette hinted that Google's $3.2 billion acquisition of Nest affected expenses. Pichette said Nest was "a pretty large transaction" for Google. 

    Mobile advertising: 

    Analysts asked about deceleration, and Pichette pointed to mobile advertising, which is a growing part of Google's business, but one where prices are cheaper. Mobile pricing needs to be better than desktop pricing, Pichette says. The good news, Pichette says, is that a lot of people are spending time on mobile. Advertisers are starting to see value in providing a great experience on mobile devices. With all the advertisers coming on board, Google is showing that advertising on mobile results in transactions. 

    Google's headcount growth:

    On why Google's headcount grew so much this quarter: the acquisition of Nest, DeepMind, and other companies had quite an effect on the number of employees. 

    Google Preferred for YouTube:

    Google Preferred, which the company will further detail in about a month, is Google's way of trying to create a premium concentration of content that brands can advertise against to ensure brand safety on YouTube. 

    Enhanced campaigns: 

    In response to a question about the effect of enhanced campaigns, Arora says it's working. Enhanced Campaigns is a system that lets advertisers launch campaigns for both desktop and mobile. 

    More on costs and expenses: 

    Analysts kept asking about costs and expenses, and Pichetti said Google was very comfortable with its cost structure. Its total costs and expenses totaled $11.3 billion, up from $9.2 billion the year earlier. The reason Google's costs are all over the place is that the buying and divestiture of Motorola Mobility, acquisitions, and "moonshot" projects such as Wi-Fi balloons and driverless cars. 

    Revenue from YouTube and DoubleClick:

    Google doesn't disclose specific revenues for DoubleClick or YouTube, but Pichette insisted that Google was very pleased with YouTube. 

    SEE ALSO: Why Google Is Making Massive, Crazy Bets On Drones And Robots

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  • Banks Say Heartbleed Poses No Threat, But Experts Raise Doubts

    Editors note: This is the free edition of Payments Insider, a newsletter on all things payments produced by BI Intelligence

    Click here to subscribe to Payments Insider and receive it in your inbox everyday

    BANKS REASSURE ON HEARTBLEED, BUT QUESTIONS REMAIN: The American Banking Association says that most Internet banking websites and apps are not affected by the Heartbleed security flaw, and most major banks have issued statements to similar effect. “To date, we are not aware of any U.S. banks that have been exploited using this vulnerability,” FDIC spokesman Greg Hernandez tells us. But such assurances are “meaningless,” says Richard Kenner, vice president of AdaCore, the software firm that works primarily with the highly security-sensitive aerospace and defense industries. Any bank using the affected encryption software, one of two programs widely available for securing information stored on Linux servers, would have no way of knowing if it had been attacked, Kenner tells us. “Banks historically have been good at making safes, but they have not been good at securing their software,” he adds. (Keith Griffith for BI Intelligence)

    Meanwhile, the first confirmed reports of Heartbleed attacks have landed, from the Canada Revenue Agency, and a UK parenting website. “Based on our analysis to date, Social Insurance Numbers (SIN) of approximately 900 taxpayers were removed from CRA systems by someone exploiting the Heartbleed vulnerability,” the Canadian tax agency said in a statement. Site administrators of Britain’s Mumsnet were advised by hackers that their user accounts had been compromised. (CRABBC

    QUOTE OF THE DAY — “It was a simple programming error in a new feature, which unfortunately occurred in a security-relevant area.” Dr. Robin Seggelmann, the software programmer who wrote the code containing the Heartbleed encryption flaw. (Sydney Morning Herald)

    PEER-TO-PEER PAYMENT APPS WILL SPUR MOBILE PAYMENT ADOPTION: Retailers and payments providers alike would like to see consumers use smartphones to make payments instead of cash or credit cards. For retailers the data gleaned from these services can be used to up-sell or cross-sell products to their customers. For payments companies smartphones offer an opportunity to carve out market share of an industry in flux. The problem? Consumers aren’t adopting mobile payments because they don’t offer compelling advantages to cash and credit cards. As we explain in a new report, an emerging category of peer-to-peer payments services that allows consumers to transfer money to one and other is going to take off across the globe, and once it does — consumers will inevitably move to other forms of mobile payments. (BI Intelligence)

    MORE ON FACEBOOK’S PAYMENTS PLAY: BI Intelligence reached out to London-based online money transfer firm Azimo, which according to the Financial Times was approached with a $10 million deal from Facebook for an online payment service partnership. A company spokesman neither confirmed nor denied the Financial Times reports, except to say that Azimo preferred to keep partnership offers to itself. But Azimo was willing to say it believed deals of this type would offer huge benefits to global consumers: “It’s very exciting and could be truly transformational to an industry of largely legacy players that has ripped off hard-working migrants for years,” company spokesman Mike Tinmouth writes in an e-mail. Azimo's company slogan is, "Send money for less." (Keith Griffith for BI Intelligence)

    CHINA’S 'BIG THREE' LOCK HORNS ON MOBILE PAYMENTS: Chinese Internet search giant Baidu yesterday launched its own mobile wallet. That means all the “Big Three” consumer web companies in China now offer competing payment products — Baidu, e-commerce titan Alibaba Group, and online media firm Tencent. The Chinese battle mirrors the five-way clash over payments between U.S. web giants, which we reported on yesterday. “If Baidu can link more offline services with online payment creatively, it can catch up with its rivals in no time," analyst Wang Weidong tells China Daily. China, a vast, emerging consumer market, has been notoriously difficult for U.S. tech giants to pierce, owing to a regulatory and consumer climate that favors home-grown alternatives. (BarronsChina Daily)  

     RISKING STEEP PENALTIES, RETAILERS AND BANKS LAG ON EMV: Bloomberg’s Olga Kharif and Bianca Vázquez Toness explain why the majority of US retailers may miss the deadline for implementing EMV: “Credit card networks have set an October 2015 deadline for most U.S. merchants to upgrade their payment systems [to EMV chip technology] … EMV cards create a unique code for each transaction, making them more difficult to hack or counterfeit than striped cards … More than half of U.S. merchants will miss the cutoff … One reason for the delay is the upgrade’s high cost: $500 to $1,000 per payment terminal … With about 1 billion cards in use in the U.S., just 20 million chip cards have been issued … The price for not complying could be high … Most retailers and banks will be liable for some fraudulent in-store transactions if they don’t have the new system.” (Bloomberg)

    AMAZON SAYS 'NO' TO BITCOIN. While Overstock.com recently made waves when it announced over $1 million in purchases transacted in Bitcoin, it seems that Amazon will not be accepting the digital currency any time soon. “We’re not hearing from customers that it’s right for them and don’t have any plans within Amazon to engage Bitcoin,” says Tom Taylor, head of Amazon payments, in an interview with Re/code. (Re/code)

    ANOTHER ADDITION TO VISA’S COMMON DEBIT SOLUTION: CO-OP Financial Services, a credit union service organization, announced that it would join in using Visa’s EMV-compliant common debit solution. The payments industry is moving towards adopting the EMV or “chip card” security standard in the U.S. At the same time, the Dodd-Frank financial legislation requires card networks to provide retailers with the option of two unaffiliated debit card networks through which to route transactions. But the chip card security standard wasn't designed to support routing through multiple networks. That means that debit networks are partnering to use a common debit routing system to adopt the chip card standard and comply with Dodd-Frank. (MarketWatch)

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  • GoDaddy Released This Woman's Personal Information To A Spammer, And Now She's Being Harassed

    JamieBernsteinA woman is claiming that she is being cyber-harassed after Web hosting service GoDaddy revealed her email address to a spammer about two years ago.

    It all started when Jamie Bernstein, a blogger for website Skepchick, reported a "dodgy-looking" spam email she received in 2012.

    She said the email was sent to her, along with a bunch of other people she didn't know, whose names also began with the letter "J."

    Realizing that both the link within the message and the email address it came from were registered with GoDaddy, Bernstein reported the spam email. 

    Now, two years following the spam incident, Bernstein has realized that emails with a link to the spammer's personal website have been circulating the Web. The spammer, who goes by the name Neo, has posted Berstein's full name, email address and photo along with insulting comments on his page.

    Here's a screenshot of a post from Neo's website: 


    Bernstein said that Neo had somehow obtained her friends' email addresses and has been spamming them with the link to his homepage over the past several days. 

    But it's not the emails, disparaging comments or publication of her email address that concerns Bernstein. It's the larger issue that GoDaddy had potentially revealed her identity to this unknown spammer that makes her feel uncomfortable.

    Bernstein said that GoDaddy never confirmed to her that it had told Neo she was the one who reported him. However, Neo told Business Insider via email that the company did indeed out her as the reporter behind the incident. 

    The topic sparked a massive comment thread on Hacker News Wednesday, in which one commenter said that reporting abuse to a website should not "carry the expectation of having anything about the reporter disclosed to the abuser." 

    GoDaddy's official support page says that it may be necessary to "corroborate a complaint" with a customer when someone reports a website or email. This means that GoDaddy may check with the person in question to make sure it's actually a case of spam. Bernstein said she couldn't recall whether or not she had seen that caveat when she submitted her complaint in 2012, but she'll definitely think twice about reporting spam in the future. 

    "In my mind the real problem is not necessarily his website," Bernstein said. "When people think about the Internet, they don't always realize that this is an actual person in the world. And right now he's anonymous. All I know is that I now have this person who feels like he needs to retaliate against me." 

    Neo said that he didn't mean any harm when he sent the initial email to Bernstein in 2012. He admitted that he didn't know her and had never contacted her prior to sending the email, but was just trying to share a link to a video he posted to YouTube.

    "I did not know these people personally," Neo said in an email to Business Insider. "But then again, that's common in today's Internet world.

    Merriam-Webster defines spam in a few different ways, including "e-mail that is not wanted," "e-mail that is sent to large numbers of people and that consists mostly of advertising" and "unsolicitied usually commercial e-mail sent to a large number of addresses." 

    Neo interpreted Bernstein's complaint to GoDaddy as a personal attack, which is why he has been posting comments about her to his personal website over the past several days.

    Bernstein said that GoDaddy had imposed a $200 fine on Neo for sending spam in 2012, but he had talked his way out of it by promising he wouldn't send any more spam. 

    GoDaddy said it didn't have any comment to offer to Business Insider, but here's the full response it issued to Bernstein in response to her blog post.

    We understand a situation like this is very frustrating. While this may not resolve the issues of the past, we hope some context will help explain how we manage spam complaints and address allegations of defamatory content.

    We have a “zero tolerance” spam policy and investigate all accusations of potential spamming on our network. We notify the complainant that it may be necessary for us to corroborate their claim with the person accused of spamming. A critical point in corroborating a spam complaint is confirming whether there was an “opt-in” email consent from the person who says they are being spammed. This is why we ask for an email address from the person filing the complaint. Without it, unfortunately there’s no way to determine if the accused spammer had “opt-in” consent. When proof of “opt-in” isn’t provided, we consider the activity a violation and take appropriate actions to prevent further spamming.

    As for the website created after the spamming complaint was handled, we do not make determinations about whether content is defamatory. As citizens of the Internet, we recommend you contact law enforcement to register a complaint about any website material you deem defamatory. We do not remove content without a court order.

    Again, we understand this doesn’t erase the issues you’ve experienced, we just wanted to provide some perspective on our policies and the issues we have to balance as an Internet provider. If you would like to discuss this in more depth, please shoot me an email and I’d be happy to speak with you directly.

    SEE ALSO: This Woman's MacBook Air Was Stolen, So She's Posting Photos Of The Alleged Thief All Over The Web

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  • A Response To Fred Wilson: Actually, It's Great To Be A Young VC

    mike rothenberg

    In a recent interview with Business Insider, Fred Wilson of Union Square Ventures shared his thoughts on a wide range of topics, including “20-somethings starting funds straight out of school.” Among other points raised, Fred suggested that young VCs got their start thanks to family money, and don’t have the network or experience to be successful investors at this point in their careers.

    As one of those “20-somethings starting funds straight out-of-school,” I was disappointed at the inaccurate presumptions about who we are and our value. Fred is a respected leader who has built a career and legacy to which anyone starting in venture capital can aspire. Fred’s words have weight, and so his remarks should be challenged when he gets it wrong. At Rothenberg Ventures, we can’t speak for all young VCs, but we can clarify what our team has built.

    To preface, a bit about Rothenberg Ventures and myself: Our 10-person team is investing out of our second fund, and I will turn 30 this year.  We have been investing for about two years and now support more than 50 portfolio companies—all still in business—and offer 60 desks for entrepreneurs working out of our SoMa offices. In November 2013, Mattermark, a deal intelligence service, graded our portfolio as the highest quality in the venture capital industry with their first “Momentum Rankings” (USV’s outstanding portfolio ranked third). We’re not yet a “success,” but for a young venture capital firm, we’re doing things Fred assigns only to those with decades of experience.

    With that in mind, we’d respectfully challenge Fred on two points he raised: 1) how Rothenberg Ventures arrived at where we are today, and 2) the basic value proposition that young VCs bring to the table.

    First, it’s true, as Fred pointed out, that some young VCs have benefited from family money. However, let’s not dismiss all young VCs as beneficiaries of wealthy families. Yes, my background includes Stanford and Harvard, but I grew up in a humble home in a small town north of Austin, raised by two wonderful parents.  I spent my college years building a formidable network in the start-up community, and learning from world-class entrepreneurs. I never considered a career in venture capital until an HBS professor encouraged me to start my own fund. The summer after my first year in business school, I sublet my apartment and lived out of a suitcase for almost three months while raising my first fund from founders and CEOs. Today, we are fortunate enough to be backed by over 75 smart money investors.

    We understand why Fred cited people who benefit from family money, but suggesting that young VCs as a class have fundraised principally through genetic lottery is empirically not true at Rothenberg Ventures.  There is no shortcut – we work to earn each dollar in our funds and maximize each dollar we’re entrusted with like the start-ups we fund.

    Second, Fred discounts the value proposition offered by younger venture capitalists. The most distinct advantages include:  

    1. Access to Seed Stage Entrepreneurs: As Fred noted, there are partners in their late 30s and early 40s at more established firms who are leaving to start their own funds. Unlike younger VCs, Fred describes this as “a pretty good model” for success because “you don’t have a legacy portfolio so you’re just working on the new stuff.” We agree with Fred that from a historical perspective this has “been the way the venture capital industry has worked.” What he’s missing is that the ground is shifting. Younger VCs are actively disrupting the legacy model of the industry because our age provides a distinct advantage by way of access. Our LPs entrust us with their money primarily to find entrepreneurs in their late 20s and 30s. For younger VCs, the degrees of separation to young entrepreneurs with big ideas are radically smaller, and our experience spending years with some of those we invest in provides a more acute sense of ability and integrity. We invest in the first institutional round for more than 80% of our portfolio, and it’s because our networks allow us to find these incredibly talented young people first.
    2. Ability to Source Talent and Build Communities: Sourcing talent and building traction via community development are two of the most important objectives of any early-stage start-up, and again, the benefits of youth are apparent. For our focus area – late seed-stage and early Series A investing – those are the needs that are most immediate.
    3. Peer-to-Peer Relationships: We do something a bit unorthodox at Rothenberg Ventures that helps the entrepreneurs we fund be more open and honest – we decline board seats. We’re interested in stepping out of our founders’ way and assisting with problem solving when they need it through on-call support.  Through peer-to-peer relationships, we’re able to uncover and identify problems that start-ups founders prefer to share with investors who feel more like a partner than a parent.

    In the end, Fred Wilson’s track record speaks for itself. He’s unquestionably a phenomenal investor, and I’ve looked up to him ever since I met him after he spoke at one of my venture classes in graduate school. Ultimately, what I’d ask of Fred is the same courtesy he extends to many of his own investments – give us a few years before writing us off.

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