globalnews

Wednesday, 13 November 2013

Why Twitter gets a pass -- even without a sign of profits

(Credit: Twitter)

Wall Street handed Twitter a $25 billion valuation on its first day of trading today. Now, let's talk about the encore.

Twitter made its public market debut at $45.10 for an instantaneous 75 percent jump in market value over where it priced its shares on Wednesday evening. The sharp run-up in share price was yet the latest example of Wall Street being willing to give Twitter's nascent advertising business the benefit of the doubt. After all, Twitter remains a company that's still not generating profits.

That the 7-year-old social network lost $133 million during the first nine months of 2013 is a fact investors just brushed aside. But Wall Street is gambling that the speed and quality of information following through 140-characters of text, photos, and videos will eventually pay off. Some of the thinking is that, like Facebook, Twitter will be able to figure out how to increase both scale and user engagement -- and figure out how to make more money as those numbers climb.

"Twitter has a very well-known and recognizable brand. Their impact on people around the world ... has been pretty profound. That alone is hard for any single company to achieve," Gartner research director Brian Blau told CNET. "It almost seems like [investors] are going to give Twitter a break -- at least for the first quarter."

But despite Twitter's notoriety as a pop phenom, Twitter still faces myriad questions. Whether it can deliver on the high expectations raised by its stunningly successful IPO goes to the heart of the debate about its prospects.

For now, Wall Street's initial assessment is just a hypothesis based around the potential of Twitter's advertising business and its nexus to pop culture, particularly through television and its network-friendly Amplify program. The Amplify initiative lets advertisers like the NFL carefully time and promote special video clips, related to live events and targeted to audiences on Twitter, with attached ads that both Twitter and its partners profit from.

There's already evidence to suggest that the program is working for the parties involved. CBS, CNET's parent company, just plugged Amplify in a way that will surely get the attention of other media companies.

"Our live events are increasingly getting a lift from social media, which is proving to be a powerful complementary platform for us. And thanks to new deals like our Amplify initiative with Twitter, we're not only benefiting promotionally, but we're now beginning to monetize clips of these events as well," CBS CEO Leslie Moonves told his investors Wednesday after the company's earnings report.

The statement is a testament to Twitter's ability to win over top-tier advertisers and its potential to profit from its real-time nature, which has been an uncertainty for the past 7 years.

"There's significance that Twitter is exploring their options and that the TV networks and the video providers are willing to go with them into the experiment," Forrester analyst Nate Elliott told CNET. "That's a good sign."

Elliott, the same analyst who recently criticized Facebook's marketing business, distinguishes Twitter's advertising business from the larger social network's in terms of its prospective appeal. Twitter's business, he said, is still quite young, which means marketers who have become disillusioned by Facebook have yet to be completely turned off by Twitter.

"On Facebook, [marketers] feel like they, as an industry, have given Facebook billions and billions of dollars and they're not getting value from it yet," Elliott said. They've given [Facebook] a chance and have been let down. Whereas on Twitter, that's not true yet."In other words, Twitter's lack of business maturity is actually a good thing. Though Elliott would also argue that Twitter has taken a more meticulous, marketer-friendly approach to incorporating ads than Facebook.

"Facebook has abandoned social marketing," Elliott said, in that the company only delivers a brand's messages to an average of 16 percent of fans who have liked the brand's Page.

Facebook's weakness is Twitter's opportunity. If the smaller social network can give marketers want they want, and genuinely connect brands with their audiences, then it will win over ad dollars.

RBC Capital Markets analyst Mark Mahaney echoed the sentiment that not all social networks are created equally in the eyes of advertisers in his Twitter note, published Wednesday evening. "We believe that Twitter's user base may be particularly well-suited to commercial purposes," he wrote. "What's more, we see the possibility for additional advertising opportunities that position Twitter as a companion to live TV broadcasts."

Now Twitter's staccato prospectus pitch -- "Live. Real-Time. Conversational. Distributed." -- makes all the more sense. Like any dutiful follower, Wall Street is favoriting and retweeting the message.

Mozilla coder: Chrome violates Google's own Blink principles

With a project called Portable Native Client now making its way into Chrome and potentially onto the Web itself, Google is violating its own principles for its Blink browser engine, a Mozilla programmer said Friday.

Portable Native Client now making its way into Chrome and potentially onto the Web itself, Google is violating its own principles for its Blink browser engine, a Mozilla programmer said Friday.

Portable Native Client, or PNaCl, is a Google technology to let Web apps run specially created software at nearly the speed of the native apps that run on operating systems like Windows or iOS. It plugs into the browser with an interface called Pepper.

Mozilla representatives have been frosty towardNative Client for years, but one programmer, Robert O'Callahan, issued a new criticism Friday, arguing that the Blink programming team's admirable Web standards principles take a back seat to Google's priorities with Chrome overall.

"Unfortunately it appears Blink's principles only apply to Blink, not Chrome as a whole," O'Callahan said in a blog post. "I'm sad, because this seriously undermines the value of the Blink team's good intentions; a Google team that doesn't want to be a good Web citizen can probably find a way to be 'not Blink' and run roughshod over the Blink team's good work."

CNET contacted Google for comment and will update this post with its reply.

Apple's TV plans on hold -- again, DisplaySearch says

Apple putting TV plans on hold to focus on wearable devices?

(Credit: CNET)

The long wait for an Apple TV will get even longer. Blame wearable devices.

That's what NPD DisplaySearch analyst Paul Gagnon claimed Monday in a research note.

The shift appears rather recent as even DisplaySearch had been expecting a product in 2014.Apple is shifting its focus to wearable devices and pushing TV plans out -- aside from its existing set-top box -- according to Gagnon.

"Indeed, our own information from TV supply chain sources pointed to the fact that Apple appeared to be lining up resources for a product introduction in the second half of 2014, likely with 2-3 large screen sizes and 4K resolution," Gagnon wrote.

But that's not going to happen, at least not right away, until Apple achieves some critical goals. Apple needs to:

Offer a unique point of differentiation to capture market share from leading TV manufacturers such as Samsung and Vizio, while at the same time being able to sell the products for a high enough price to deliver typically high Apple margins. [And] create follow-on replacement purchases to keep hardware sales from flat-lining once household penetration peaks.

To offer truly unique product differentiation that would allow Apple to capture market share from existing smart TV brands, they would need to either deliver some exclusive source of content that the other brands cannot, such as a la carte pay-TV channels, or proprietary content not available on other devices. Neither of these is easy to achieve, and our sources indicate this is one of the principle reasons for the delay in the project.

This may offer some relief to potential Apple rivals, Gagnon said.

"For the current smart TV brands, this will be a big relief. While Apple may not have sold very many units, it would have had significant impact on the upper-tier product ranges from most of the top brands," he wrote.

This speculation follows a report last month that Intel is abandoning its TV project.

The DisplaySearch note comes as rumors heat up for an Apple iWatch, expected next year.

Making Roomba for innovation: 5 lessons from iRobot

The business end of the new Roomba 880 features treaded rubber rollers instead of brushes.

(Credit: Colin West McDonald/CNET)

iRobot has launched its latest Roomba, a high-end 880 series vacuum with a new cleaning system dubbed Aeroforce and a bevy of tweaks based on customer feedback.

While I've tried the Roomba 880 and found it handy, the real story to me revolves around how iRobot thinks and approaches its products. The company started out making military robots, then got into its iconic Roomba and now has health care robots too.

In other words, iRobot is a fun company to watch, and its main value proposition is adding some time back to your life with fewer chores.

Here are some innovation takeaways from iRobot:

Innovation is company and customer specific. The Roomba's Aeroforce is a brushless system that breaks down debris and lifts dirt with less maintenance. Max Makeev, product manager at iRobot, said the company decided to tackle the traditional vacuum cleaner bristle design based on customer pain points -- maintenance and cleaning frequency. Simply put, Aeroforce means that the Roomba doesn't get caught up with hair as much. And because Aeroforce's housing is smaller, the Roomba 800 can store more dirt. Given Roomba's small footprint, developing a brushless system was critical relative to other vacuums. Product pain points are discovered via iRobot's call center, as well as inquiries and surveys.

Focus on big issues for customers. Innovation means knocking down the big things for customers, said Makeev. As noted, performance and maintenance were two of the biggest issues for Roomba customers. With each product launch, iRobot has aimed to improve on those two items. "We aim to give back time to our customers," said Makeev. Because of the company's focus on decreasing the product's required maintenance, Roomba customers can program the robot and move on to bigger things.

Time to innovate. Maleev said that solving a product/customer challenge can take anywhere from two to three years, start to finish. The Roomba enhancements took about two years, he said.Organization. iRobot has central engineering, operations, and marketing and sales teams. These groups share information across them, but iRobot's divisions -- in the Roomba's case, the home unit -- are responsible for innovating on the product front. After all, R&D for home robots is very different than government clearances needed for military applications.

The testing process. For the latest Roomba, engineers test prototype robots internally and then the product is moved into beta in multiple countries. For instance, iRobot selected 61 customers in four countries to give the latest Roomba a spin. That testing phase was in addition to other Roomba 880s in the field.

Supercomputing simulation employs 156,000 Amazon processor cores

Over an 18-hour period, Cycle Computing used a peak of 156,314 processors on Amazon Web Services for a supercomputing simulation.

(Credit: Cycle Computing)

Supercomputing, by definition, is never going to be cheap. But a company called Cycle Computing wants to make it more accessible by matching computing jobs with Amazon's mammoth computing infrastructure.

On Tuesday, the company announced a new record use of its technology: a simulation by Mark Thompson of the University of Southern California to see which of 205,000 organic compounds could be used for photovoltaic cells. The simulation drew upon the power of 156,314 processor cores at Amazon Web Services for 18 hours to test the chemicals with Schrodinger Materials Science software for computational chemistry, Cycle Computing said in a blog post.

The job cost $33,000. That might sound expensive, but it's cheap compared to purchasing hardware that sits idle most of the time or that can't perform at a comparable peak performance level. The job would have taken 264 years on a conventional computer, or 10.5 months on a 300-core in-house computing cluster that did nothing else, the company said.

This particular job was particularly amenable to a quick spike approach. Cycle Computing Chief Executive Jason Stowe told CNET that the task was "pleasantly parallel," meaning that different parts of the job could run independently from other parts and, therefore, at the same time.It's an interesting approach for the modern era of computing, in which companies like Amazon, Google, and Microsoft operate mammoth data centers and customers can pay for huge amounts of computing power as they need it. Traditionally, such cloud-computing resources were used to add computing capacity when customers needed something extra to get through peak usage times, like holiday shopping season. However,Cycle Computing's approach is designed with peak computing capacity in mind. It's designed to compress computing jobs into a spike of intense computing.

Cycle Computing's software handles the dirty work, such as securing Amazon resources, uploading data, dealing with any outages, and making sure financial limits are observed.

To harness the huge amount of computing power, Cycle Computing drew on Amazon services spanning the entire planet.

"In order for our software to compress the time it takes to run the computing as much as possible, we ran across eight regions to get maximum available capacity," Stowe said.

There's nothing stopping Cycle Computing from drawing on other resources, such as Google Compute Engine, but Stowe said its customers are using Amazon Web Services.

"To date, customers have only moved [Amazon Web Services] into production," he said. "In the end, we follow our customers."

Google aims for slicker Web graphics, but can it get there?

A PNaCl demo, Bullet Physics, shows how C and C++ can be ported to the Web using Google's new compiling platform.

(Credit: Google)

More than three years after it was introduced in a white paper, Google's Portable Native Client, or PNaCl, launched for developers on Tuesday.

Pronounced "pinnacle," PNaCl works by allowing developers to compile C and C++ software to Web apps. Potentially, it could be a huge boon for developers who want to get their audio and video decompression software, image editing tools, or the complex engines that power video games by simplifying the "translation" from native code to the Web.

However, despite its public debut, PNaCl still faces a difficult road ahead. PNaCl, its predecessor Native Client (NaCl), and Pepper, the group of APIs that let PNaCl talk to the browser, only work in Google Chrome. There don't appear to be plans at the moment to integrate them into other browsers at the moment, with Mozilla publicly critical of PNaCl for violating Google's principles of adhering to open and accepted Web standards in Blink, Chrome's rendering engine.In its blog post announcing that PNaCl is ready, Google summarized the technical aspects of PNaCl as skipping the processor-intensive task of recompiling applications to run on devices powered by different hardware, such as x86, ARM, or MIPS.

"Unfortunately it appears Blink's principles only apply to Blink, not Chrome as a whole," wrote Mozilla programmer Robert O'Callahan.

Google told CNET that it would like to see other browsers adopt the open source Portable Native Client and Native Client to make it easier for programmers who code in a language other than JavaScript to port their project to the Web. Pepper, Google noted, relies on the Emscripten project, which Mozilla's ASM.js uses to solve the same problems as PNaCl -- albeit in a way that requires less effort from browser makers.

Still, it would be surprising to learn that Google wouldn't assist other browser makers in integrating PNaCl. But will they? So far, the answer is no.

There are legitimate developer concerns that supporting several programming foundations at once could lead to a Web that's harder to develop for. The critics claim that coding for PNaCl will lead to a fractured Web sounds not unlike the way that Web developers had to code specifically for Internet Explorer a decade ago

Cheqq

(Credit: Chegg)

It appears to be IPO season. Chegg, the online startup that provides both study guides and a service to rent textbooks, announced Tuesday that it priced its initial public offering at $12.50 a share.

This pricing is higher than earlier expectations, which were pegging the share price between $9.50 and $11.50. The price means the company will have raised $187.5 million with its 15 million shares of common stock. This IPO will value the company at just about $1.1 billion.

Chegg is expected to begin trading on the New York Stock Exchange under the ticker symbol CHGG on Wednesday, November 13.

The Santa Clara, Calif., company launched eight years ago as an educational textbook rental service but has since morphed into an online learning hub. It offers (digital and printed) textbook rentals and sales, homework assistance, online courses, and scholarship services.