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Monday, October 27, 2014


Original Story:

The streets of Singapore are crammed with people walking along glued to their phones. So it comes as no surprise that only Indians spend more time on the Web than Singapore, a study by Tata Communications has found.

Indian telecommunications firm Tata Communications spoke to 9,417 respondents in India, Singapore, the U.K., United States, Germany and France as part of its online survey, the results of which were published this week.

Respondents were asked 14 questions, aiming to analyze people's emotional connection to the Internet.

A total of 43 percent of Singapore respondents said they spend more than six hours a day surfing the Web, significantly more than the global average of 29 percent.

Indians, meanwhile, spent the largest proportion of their day online, with 46 percent of respondents clocking up six hours or more online.

Overall, 71 percent of respondents overall said they spent up to six hours a day, with 29 percent saying they spent at least six hours or more.

Asian respondents also appeared to be the most dependent on the net compared to the other regions profiled. Over half of Singaporeans (52 percent) and 56 percent of Indians said they were not capable of lasting up to 12 hours without Internet access.

Seventy-eight percent of Singapore respondents said not having Internet access sparks negative emotions versus a 64 percent global average. The average surveyed Singaporean believes they can only survive 7.3 hours without Internet access.

By contrast, people in Europe and the U.S. can go much longer without an online fix, the survey found, with 86 percent of Germans, 77 percent of French, 75 percent of U.S. and 70 percent of U.K. respondents managing up to 12 hours without Internet.

Tata also delved into the modern Internet-induced phenomenon of FOMO—fear of missing out—a concern that you're missing out on a crucial online experience.

It found that 64 percent of all the people it surveyed said they experienced FOMO when without Internet access. Asian respondents seemed the biggest victims of FOMO, with 80 percent admitting to experiencing it when not online.

The top trade-offs when it came to substituting Internet usage for other activities were alcohol at 28 percent, television at 26 percent, chocolate at 22 percent and sports at 19 percent, Tata found.

On a global scale, 92 percent of respondents said they spent at least an hour a day online, and one in three said they couldn't survive more than five hours without their online fix.

More than three-quarters of respondents said they believed the most beneficial impact of the Internet is its ability to connect people globally with incredible speed.


Original Story:

Google unveiled a lineup of gadgets Wednesday that will run on its new Android 5.0 Lollipop operating system.

First up: The Nexus 6 smartphone that Google developed with Motorola. The phone has a contoured aluminum frame, a 6-inch Quad HD display and a 13-megapixel camera. There are dual front-facing stereo speakers and a "turbo charger" so users can get up to six hours of use with only 15 minutes of charge.

Google also announced the Nexus 9, a new tablet built in partnership with HTC that comes with brushed metal sides and an 8.9-inch screen. The Mountain View, Calif., company also designed a keyboard folio that magnetically attaches to the Nexus 9 and can rest on a user's lap.

Rounding out the trifecta is the first device running Android TV: Nexus Player, a streaming media player for movies, music and videos that was created in collaboration with Asus. The Nexus Player doubles as an Android gaming device.

The Nexus 9 and Nexus Player will be available for pre-order Friday, with Nexus 9 hitting stores Nov. 3. Nexus 6 will be available for pre-order in late October and in stores in November.

Android 5.0 Lollipop will also be available on Nexus 4, 5, 7, 10 and Google Play edition devices in the coming weeks.

Lollipop was previewed at the Google I/O developers' conference and is the company's largest release on Android, with more than 5,000 new APIs for developers.

"Lollipop is made for a world where moving throughout the day means interacting with a bunch of different screens -- from phones and tablets to TVs," Google said in a blog post announcing the Lollipop gadget family. "With more devices connecting together, your expectation is that things just work. With Lollipop, it’s easier than ever to pick up where you left off."

The new Google products were unveiled a day before Apple is set to launch some products of its own -- likely new iPads and Macs -- at a media event in Cupertino, Calif.


Original Story:

Eric Schmidt and Jonathan Rosenberg help run Google, one of the world's best-known, most successful — and most controversial — companies. They've just published a new book, "How Google Works," a guide to managing what they call "smart creatives," the technically proficient, innovation-savvy workers whom companies in every industry are trying to recruit and retain.

Google is best known for its ubiquitous and highly profitable search engine, but the company's interests include operating systems (Android for smartphones, Chrome for computers); productivity applications (Gmail, Google Docs); cutting-edge products (Google Glass); and applied research (smart contact lenses, driverless cars). For many smart creatives, getting hired by Google is considered a badge of honor.

The company, however, finds itself constantly in the midst of controversy involving regulators and politicians concerned about data privacy, and censors in places like China, where open data and political stability don't mix.

Schmidt, now 59 and a tech industry veteran, was brought in as "adult supervision" in 2001 to help the young company's then-college-age founders, Larry Page and Sergey Brin. In 2011, Page took the CEO job, while Schmidt remains executive chairman. Rosenberg, 53, a Google executive since 2002, currently serves as advisor to Page.

Schmidt recently sat down with The Times at Google headquarters in Mountain View, Calif., to talk about the book. Rosenberg joined on speaker phone. Below is a transcript, edited for length.

Why does the world need another management book?

Schmidt: Well, it's my first management book.

Rosenberg: Traditional management books don't address the fact that the balance of power has shifted from companies to consumers. That's made building superior products the paramount issue for companies today. So the key thing that they need to figure out is how to attract what we in the book call the new breed of employee, the "smart creative." Those are the people who have mastered the tools of the current age to build superior products. We don't think anyone has told that story before.

What can any company — not just a young tech company — learn from Google? And what's a 'bobble-head yes'?

Schmidt: In the book we talk about how lots of people have experience in business meetings where the [boss] runs the meeting, nobody ever actually says anything interesting, there's no new data presented, everyone just says yes and then they leave and do whatever they want. We call that the 'bobble-head yes.'

From a management perspective you've got to have the data, you have to have a conversation, you have to have a debate, you have to hear all different points of view, and you have to have buy-in.

Rosenberg: The biggest thing that almost any company needs to do [to attract smart creatives] is maintain complete transparency about the sharing of information. Today it's very easy to get information to employees through email, through their intranet, but most companies still maintain that hierarchical 20th century structure where limited amounts of information flow down.

And any company can implement our approach by starting meetings with data, really arguing internally about the data.

You believe in five-year plans. That seems a long time in the technology industry.

Schmidt: Usually things change over a five-year period and you have to be ready to address those with some new business or business insight. But you're better off operating with the headlights on and the eyeglasses on or whatever metaphor as to what your future is really going to look like. If you can't answer it, you're not doing your job as a leader.

Most businesses don't seem to have a credible long-term five-year plan. They accept the current situation and expect it will be true for the next decade.

How does Silicon Valley's tech culture differ from L.A.'s?

Schmidt: They're very similar. There are much larger differences outside of America, and some differences between East Coast and West Coast and Midwest.

But my experience dealing with the tech people in L.A. is that they're fantastic.

The people in Hollywood that I have dealt with are all on board with the fact that the primary viewership is moving to Internet-based solutions. There are plenty of issues of monetization and rights and so forth, but there are no Internet digital deniers. Whoever they were they're no longer in power. People understand the scale of the Internet now, in a way they didn't 10 years ago.

You look at the studio model, the structure by which the creative process works in Hollywood, it's highly efficient, in the sense that it's very Darwinian. You have strong entrepreneurs who are the directors and producers — they're trying to put a deal together, they're trying to generate traffic. Notice it's not being done top down, it's being done sideways or bottom up. There are many similarities between that model and the model we talk about in our book.

Your company is facing increasing government scrutiny and regulation. How do managers deal with that?

Rosenberg: The main thing I suggest is that people simply build better products that consumers are so excited about. Then consumers will help drive an appropriate political and legislative discussion that will allow us to fix regulations where regulations are problematic.

A positive example is Uber. They've leveraged many of the specific trends we talked about in our book — information connecting people with providers in a very clever and seamless way with a deep technical insight — yet they're running headlong into requests for regulation.

Schmidt: Uber is the easiest one to understand because everyone understands what Uber is. Imagine Uber said, 'Oh, we don't want to have any lawsuits, so we have to always be integrated with everybody else' [such as the taxi industry] and it would have followed a less innovative path. And that ultimately would have produced a less beneficial product to the Uber customers. I should say Google is an investor in Uber, for full disclosure.

Rosenberg: The way to deal with the regulation is for people to tell their government that they want these better products and services.

Schmidt: We're always on the winning side when we're on the user side…. It works in most countries. There are some countries which you can essentially think of as non-democracies, where they're just not organized around citizens, they're organized around other things, and there the issues are much harder.

What I say to people internally is don't censor your own innovation, let me do it. If you build a fantastic product we'll figure out if it's going to work in some legislative or regulatory world that's unfamiliar to Americans. In other words, build a great product and if we have to hobble it let [top management] choose to do that, separate from your brilliant invention.

What do the media get wrong about Google?

Rosenberg: The level of importance of the unique perks. It's easy to take pictures of people walking around with their dogs, it's easy to take pictures of the food in the cafeteria, and it's easy to talk about the massages and the other benefits, but fundamentally, that's not what attracts people to the company.

What attracts people is the ability to work with other brilliant people and to work on really, really big problems. And the media tend to be suspicious of some of the biggest moonshots that we're interested in taking: the smart contact lens, the cars, the fiber effort, the [data-delivery] balloons. Those are the kind of things I think are the most exciting and empowering to bring great employees and not the more obvious surface-level things.

Schmidt: For the kind of people we're talking about, they have an idea that Google provides the resources and the scale for them to achieve it. If they had the money themselves, they would just do it themselves.

But many things of consequence are hard, they take a lot of time, they take a lot of resources and very smart people, and Google has turned out to be a place where such people gather.


Original Story:

A 20-second trailer for the movie "Ouija" that ended with a terrifying shriek was viewed by millions of people on Snapchat last weekend in what a Universal Pictures executive called a satisfying first run at advertising on the messaging app.

The sponsored video was the first time Snapchat had been paid to show content to its users, the Los Angeles start-up said last week. Snapchat declined to comment on how the experiment performed.

Universal had long expressed interest in advertising on Snapchat, said Doug Neil, the studio's executive vice president of digital marketing. It was serendipitous that Snapchat's internal timetable for launching ads worked out to give Universal a chance to be the first mover. He said the ad was "competitively priced" compared to "video opportunities in general."

"We believed that the Snapchat user is in our core target user for the 'Ouija' movie opening Friday," Neil said. "If it hadn’t been a movie tied to a teen audience, we probably wouldn’t have taken this opportunity."

A link to the "Ouija" ad, noting that it was sponsored, appeared alongside updates from Snapchat users' friends on Saturday and disappeared a day later. To watch, users clicked on the link and pressed on the screen for the duration of the video. It was available only to U.S. users because Universal is handling only domestic marketing, Neil said. The ad was professionally produced as opposed to shot on a camera phone, like most Snapchat messages.

Snapchat was still tabulating final analytics, but Neil said a key metric would be how many people were exposed to the ad versus how many viewed it.

On social media, some Snapchat users expressed bewilderment about watching a clip from what they knew was a scary movie. Others were annoyed by the ad or surprised that it wasn't necessarily as novel an approach as they thought it might be.

Neil saw the responses as a positive.

"Some of the best response was being scared by it," he said. "They were being marketers for us, and that’s the best of digital and social media marketing. We were very satisfied with the experience."

With investor capitalization that makes it worth billions, Snapchat said last week that it was time to start making money. The mobile advertising market is expected to reach $19 billion in the U.S. this year, according to EMarketer. But Snapchat could quickly scale the charts because its wrinkle of allowing messages to be viewed only for a certain period and requiring users to opt-in to view them marks a different approach for advertisers.

Friday, October 24, 2014


Original Story:

Last week, Google reported slower-than-expected revenue growth during the third quarter.
Investors punished the company with a stock sell-off, and now Google shares are trading at $511.17, well below a 52-week high of $604.83.

In a story on the disappointing earnings, BI's Jillian D'Onfro pinpointed Google's problem: its big business, search advertising, isn't growing as fast as it used to. In fact, it hasn't grown so slowly since six years ago.

To be very specific: People didn't click on Google search ads as much as everyone thought they would during the quarter.

"Growth in paid clicks didn't accelerate as much as analysts expected it to: 17% year-over-year versus expectations of 22% year-over-year," wrote D'Onfro.

Here are three reasons that's happening.

Reason #1: Google search is the best money-making business on the Web, but the Web is slowly becoming irrelevant thanks to mobile.

The world is moving away from desktop computers. As the world does this, Web usage is growing more slowly. As overall Web growth slows, Google Search growth slows — and so do clicks on search ads. Google SEO Companies help businesses improve website ranking in Google search.

Reason #2: People are more comfortable going straight to Amazon to search for products to buy.
A couple years ago, we met with several Google executives and learned that the company keeping them up at night wasn't Facebook and it wasn't Microsoft; it was Amazon.

Google is a search company, but the searches that it actually makes money from are the searches people do before they are about to buy something online. These commercial searches make up about 20 percent of total Google searches. Those searches are where the ads are.

What Googlers worry about in private is a growing trend among consumers to skip Google altogether, and to just go ahead and search for the product they would like to buy on, or, on mobile in an Amazon app.

There's data to prove this trend is real. According to ComScore, Amazon search queries were up 73% in 2012. But it makes intuitive sense doesn't it?

Why go through these steps …

Open a Web browser on your phone.
Google search "bike gloves"
Analyze some text links.
Click on one to go to a product page on some e-commerce store.
Click to add the item to your cart.
Input your credit card.
Input your address.
Select what kind of shipping you would like to pay for.
… when you can just …

Open the Amazon app on your phone.
Search Amazon for "bike gloves."
Click one button to buy the product with your usual credit card and have it shipped to your normal address, for free.

Reason #3: Google is way behind in the best money-making business on mobile, monetizing streams.
Facebook generated $1.8 billion in mobile ad revenues during the second quarter, 151% over the same period the year prior. Twitter generated $255 million in mobile revenues during the quarter.

Both Twitter and Facebook are, mostly, making all the money by selling ads against "streams" in their mobile apps.

Google also sells mobile ads.

But it doesn't own a stream to sell ads against.

Meanwhile, Facebook and Twitter keep adding more streams to sell ads against.

Facebook bought Instagram and WhatsApp. Twitter bought Vine.

Facebook and Twitter are also both taking what they've learned about putting ads their own streams to help other app makers sell ads (and taking a cut, of course).

It's reminiscent of how Google made a bunch of money selling ads against its own content — search results — and then and then it took those ad-selling techniques and spread them all over the Web, to great profit.

Maybe Google's growth is slowing because it's not doing the same thing in mobile, while Facebook and Twitter are.

BONUS REASON: Larry Page is investing for the distant future, not the near term.
In the past couple of years, Google CEO Larry Page has invested billions of dollars in self-driving cars, thermostats, robots, and computers for your face. None of those investments have turned into real businesses yet. Maybe they will someday.


Original Story:

Google this afternoon announced that it is launching a new Google Domains service. In an effort to continue its reach to small businesses, the company has announced that it is, for the first time, offering a domain registration service. Google says that its small business-focused division decided to create Google Domains because, according to its research, 55 percent of small businesses still do not have a website.

Google Domains is still in an early, invite only beta, but the company says that it hopes to launch to all consumers soon. Currently, website creation tools Wix, Weebly, Shopify, and Squarespace have all signed up as partners. In addition to being able to register a new web address with Google Domains, you’ll also have the ability to transfer for names from other services into Google’s offering.

One big advantage to Google Domains is that it won’t charge extra for setting an address private. Google will offer 100 email addresses on the domain for free, in addition as many as 100 sub-domains. Google Domains will also use the company’s own DNS servers, which should make for fast response times.

Starting to test Google Domains

It’s 2014 and it seems obvious, but across laptops, tablets and mobile devices, a website is one of the first places people go to find information about a business. But amazingly, our research shows that 55% of small businesses still don’t have one.

So as we explore ways to help small businesses succeed online (through tools like Google My Business), we thought it made sense to look more closely at the starting point of every business’s online presence – a website. And that starts with a domain name.

We’re beginning to invite a small number of people to kick the tires on Google Domains, a domain registration service we’re in the process of building. Businesses will be able to search, find, purchase and transfer the best domain for their business – whether it’s .com, .biz, .org, or any of the wide range of new domains that are being released to the Web.

Google Domains isn’t fully-featured yet, but we’re giving a small group of people the ability to buy and transfer domains through it and send feedback on their experience. (You currently need an invitation code to do so, sorry!) We want input on all the ways we can help make finding, buying, transferring and managing a domain a simple and transparent experience. We also want to make sure our customer support and infrastructure works flawlessly, and that we have the right additional services (like mobile website creation tools and hosting services from a range of providers, as well as domain management support). We’re working with some of the top website building providers like +Shopify, +Squarespace, +Weebly, and to help make that happen.

While we’re still building out all of the features, our goal is to make Google Domains more widely available soon. You can check out the first cut of what we’re working on at


Original Story:

Snapchat is to show its users adverts for the first time this weekend.

Despite not having a regular source of revenue, Snapchat was recently valued in the region of $10 billion (£6 billion).

Co-founder Evan Spiegel revealed the plans to show adverts on the app last week - but the firm has so far refused to say who the first buyer is.

'This weekend we’re placing an advertisement in “Recent Updates” for Snapchatters in the United States,' the firm said.

'It’s the first time we’ve done anything like this because it’s the first time we’ve been paid to put content in that space.

'It’s going to feel a little weird at first, but we’re taking the plunge.'

The firms 24-year-old co-founder Speigel told Vanity Fair's New Establishment Summit that sponsored posts will only show up on the app's Stories feature.

Snapchat Stories add Snaps together to create a narrative.

When a user adds a Snap to a Story it lives for 24 hours before it disappears, making room for the new.

Mr Spiegel said: 'People are going to see the first ads on Snapchat soon. We think they're pretty cool.'

He added that the adverts will be opt-in, and users can choose to look at them, or skip.

'The best advertisements tell you more about stuff that actually interests you,' the firm promised today.

'An advertisement will appear in your Recent Updates from time to time, and you can choose if you want to watch it.

No biggie. It goes away after you view it or within 24 hours, just like Stories.'

The firm also admits exactly why it is introducing the feature.

'The answer is probably unsurprising – we need to make money.

'Advertising allows us to support our service while delivering neat content to Snapchatters.

'We promise that we’ll use the money we make to continue to surprise the Snapchat community with more terrific products – that’s what we love to do!'

It also pledged it will never put ads in personal communications.

'That would be totally rude. We want to see if we can deliver an experience that’s fun and informative, the way ads used to be, before they got creepy and targeted.'  

Earlier this week, reports claimed Yahoo was reportedly preparing to invest £12 million ($20 million) in Snapchat.

Despite not yet having a source of revenue, more than 100 million users use the app - which is apparently enough to convince companies to spend vast sums on the three-year old startup.

Yahoo’s move follows an almost identical investment from venture capital firm Kleiner Perkins Caufield and Byer in August.

The move comes after a similar, albeit much larger, investment in Chinese technology firm Alibaba reaped huge dividends for Yahoo, with its $1 billion investment in 40 per cent of the company in 2005 now valued at tens of billions of dollars.

This latest move, according to the Wall Street Journal, comes as Snapchat starts to seek funding from venture-capital firms, money managers and companies.

Snapchat may be a key partner to Yahoo as it gets set to release Snapchat Discovery next year.

This is a rumoured service that will display brief ads alongside news and video clips on the app, which will likely become a key source of revenue for Snapchat.

Snapchat Discovery would provide a platform for Yahoo to distribute its own content.

However, the £6 billion ($10 billion) valuation of a company that hasn't, yet, monetised its users, has been dubbed a risky proposition.

That’s not to say it hasn’t worked before; Microsoft’s 2007 investment in Facebook valued the then three-year old company at £9.4 billion ($15 billion), and later proved hugely successful.

Last year Snapchat infamously turned down a £1.8 billion ($3 billion) offer from Facebook - a decision that left many stunned.

But the move seems to have paid off, as Snapchat’s owners Evan Spiegel and Bobby Murphy are set to become billionaires according to the current valuations of the company.

If the valuation holds true, Snapchat would join a select club of tech startups with valuations of £6 billion ($10 billion) or more, including car-ride service Uber and rooms-to-let startup AirBnB.

Snapchat lets users send photo-messages that vanish within seconds, but is expected to soon begin offering advertising or branch out into additional services.

This may include the ability to send instant money transfers to other users.

Although Snapchat, and other similar mobile messaging apps, don't have established business models yet, its rapid user growth and perceptions of advertising potential have aroused intense investor interest over the past year or so.

Snapchat is continuing to grow in popularity, with people sending more than 700 million disappearing messages a day.

In June, Facebook launched a similar app called Slingshot in the hope of replicating Snapchat’s success.

The app lets consumers exchange photos and videos, which later disappear, without requiring Facebook accounts.

But despite its rapid growth, Snapchat has had a number of obstacles to contend with.

The group this year settled charges with US regulators, which accused it of deceiving consumers by promising that photos sent on its service disappeared forever after a period of time.

According to the Federal Trade Commission at the time, photos sent on Snapchat could, in fact, be saved by recipients using several methods, such as taking a screenshot.

Wednesday, October 15, 2014


Original Story:

SAN FRANCISCO (Reuters) - When Google started testing a free same-day shopping delivery service in San Francisco last year, industry observers were surprised by the company's foray into a notoriously tricky and decidedly low-margin real-world business.

Others raised their eyebrows when orders of one or two items, such as toothpaste or a can of soda, sometimes arrived in a bag big enough to hold a week's worth of groceries.

It was a rookie mistake, one that underscores how Google is wading into unfamiliar territory -- a business, now contested by seasoned hands Inc and eBay Inc. that claimed many victims during the first dotcom boom.

For Google, which dominates the wildly profitable Web search advertising business, dispatching drivers and delivering packages seems like an expensive diversion with an uncertain payoff. One of the biggest disasters of last decade's dotcom crash, Webvan, bled hundreds of millions of dollars on just such a business until it failed.

Online shopping is an area that Google, which has ambitions to dominate every aspect of the Web, has traditionally had a limited presence in. Traffic lost to Amazon and eBay, which are using same-day service to lock in consumers for the main business, means customers lost for Google's other services.

As e-commerce grows, Google wants at least to get its hands on data about online shoppers, so it can expand and improve its main business, search advertising. Its successful foray into mobile phone software was driven partly by a similar philosophy to guard its search franchise. Now its Android system ensures Google search is on most smartphones globally.

After more than a year of testing, and hiccups such as on packaging, Google is preparing to expand its delivery service.

Unfazed by the ghosts of defunct home-delivery operations Webvan or, Google is ramping up its Shopping Express with radio ads touting the service in the San Francisco Bay Area. It recently took its blue-and-white Priuses and vans to Los Angeles in a limited trial and is considering moving into New York, according to a person familiar with the matter.

"Same-day delivery doesn't have to be a luxury. It's a convenience that everyone should be able to enjoy, and that means across lots of stores, across lots of cities and across lots of products," said Tom Fallows, director of product management for Google Shopping Express. Fallows wouldn't say when Google delivery cars might come to New York, but he confirmed that the company plans to enter more cities.

"We are eagerly starting to move forward on some of our next steps for expansion," he said. He declined to discuss the economics for Google.

Google is also experimenting with ways to deliver perishable groceries such as milk and eggs -- items that require special temperature-controlled storage and delivery gear, and which are already available through Amazon's rival Fresh service -- though Fallows said it's too early to say whether that might ultimately become part of the service.

Google has "tens of thousands" of users of the service in the San Francisco Bay Area placing thousands of orders a day, according to the person with knowledge of its delivery business.

"This is a play that will take many years before it turns in any way profitable. But it's something worth doing if they can establish the marketplace and the other hooks into the business," the person said.


Google Shopping Express lets consumers buy products online from more than a dozen stores in the San Francisco Bay Area, including Staples, Costco, Blue Bottle Coffee and Toys R Us, and have the goods at their doorsteps that same day.

Couriers or contract drivers pick the orders up from retail stores throughout the day. Google collects an undisclosed commission from the retail stores for each sale.

For now, consumers pay nothing for the convenience, thanks to a free six-month membership trial offered by Google. Google will likely extend the free trial until it has perfected the service and is ready to charge a subscription fee, said Fallows.

With nearly $60 billion in cash, Google can afford to experiment with same-day delivery, similar to the way it is building out high-speed fiber networks in some cities.

Importantly, the ability to deliver purchases into buyers' hands on the same day closes the "last mile" between an online business and a customers' home. That removes a key advantage of traditional retailers today: instant gratification.

As Amazon spends billions on fulfillment centers and eBay contracts couriers around the country, the danger is Google may be left out of one of the hottest new areas of online growth.

The eBay Now service, available in the San Francisco Bay Area, New York, Chicago and Dallas, charges $5 per order and delivers goods within one to two hours. Amazon charges a $299 annual fee for Prime Fresh, which lets consumers order anything from fresh salmon to digital cameras, with free same-day delivery for orders more than $35. It's available in Los Angeles, San Francisco and Seattle. Amazon's separate Local Express service lets Prime members in 10 U.S. cities pay $3.99 per item for same day delivery.

Google's Shopping Express is being tested as a standalone delivery service, but many people expect the eventual goal is to integrate home deliveries as a feature in the search engine. A consumer doing research about camping tents on Google, for example, might see an ad that lets them order one and have it delivered to their doorstep the same day.

"It's just another way of to make search more powerful," says BGC Partners analyst Colin Gillis. And it gives Google more insight about users, such as valuable information about which visitors its website "convert" into buyers after clicking one of its search ads.


Amazon, eBay and Google have been mum on progress. But there's evidence to suggest that consumers may be taking to it.

Family-owned Palo Alto Toy & Sport, which Google identified to Reuters as a participant in Google Shopping Express, has increased sales by 15 percent, said manager Miguel Natario. The increase in sales has more than paid for an additional employee hired to pick the 30 to 40 additional daily orders from store shelves and prepare them for the Google driver pickup.

Among the most popular items? Helium-filled Mylar balloons, a party essential that sells for about $4 to $5 each. "I get inflated balloon orders every single day," said Natario.

The real test will come when Google asks users of Shopping Express to open their wallets and pay for home deliveries.

Google may need to put in place some restrictions if it hopes to make same-day delivery a viable business.

Paying drivers to crisscross town delivering packs of gum or tubes of toothpaste is not a sustainable business, said Kenneth "Skip" Trevathan, former chief operating officer of, an online delivery service that expanded to several cities in the 1990s before going out of business.

"Unless they've got a magic wand of some kind that we didn't have, I just don't see how they can make money off that," Trevathan said. He predicts Google may have to impose a minimum order or tack on an additional fee for smaller orders.

Unlike many Internet businesses in which being first to grab market share is key to success, growing too big too fast can be fatal in the delivery game, said David Vernon, a Sanford Bernstein analyst. A small order that forces the delivery person to drive to the other side of town can do more harm than good.

"Last mile" economics are among the most complex metrics in the industry. Too much time between deliveries or poorly planned packing can inflate costs, especially for same-day orders.

A difference in the time between deliveries of just a few minutes can double shipping cost, according to an October analysis of Amazon's delivery service by Marc Wulfraat, a consultant who specializes in logistics networks.

"Getting a bunch of revenue that doesn't drive density in your routes is actually worse, because you're adding costs faster than you're adding revenue," said Vernon.

For Google, the key is to get that lag down. That's where mapping technology and a wide network come in handy.

"If you think about the fact that there are more than a billion people using Google maps to help them drive around town, we have a ton of information for optimal routes and traffic patterns," Fallow said.

Equipped with Android smartphones, Google couriers receive "step-by-step" driving directions. Deliveries per hour have increased by more than a factor of six since Shopping Express began, thanks to ongoing improvements in the software, and Fallow expects more improvements.

Orders for a single tube of toothpaste aren't ideal, but they are offset by the "broader basket" of customer orders and the annual spending of each customer. Google's delivery service is not so different from a traditional retail business, he said.

"Stores sometimes sell particular items as a 'loss leader' in order to over time earn the broader business of that shopper," he said.

Tuesday, October 07, 2014


Original Story:

A former president and chief financial officer of Yahoo said a merger with AOL would make little sense.

"We've all looked at that deal so many times," said Sue Decker, who left Yahoo in 2009. "And I think you just get something that's even bigger, growing slower"—a line that generated chuckles around a roomful of female executives who had gathered in Dana Point, Calif., for the Fortune Most Powerful Women's conference. A Boston M&A Lawyer provides professional legal counsel and extensive experience in many aspects of merger and acquisitions law.

Decker's comments on Monday came days after an activist hedge fund, Starboard Value, urged Yahoo to consider a pairing with AOL, cut bloat, and sell Asian assets. Yahoo CEO Marissa Mayer responded by saying she would review Starboard's letter, but Yahoo executives said as recently as July that they would not consider an AOL deal. A St. Louis Business Lawyer has experience in corporate dispute cases.

Yahoo did not immediately respond to a CNBC email sent Tuesday seeking comment.

Meanwhile, a crucial question hangs over Yahoo: What should it do with the roughly $5 billion it will receive in cash for selling a portion of its Alibaba Group holdings?

So far, Yahoo has said it will return at least some of the money to shareholders, and Mayer is in talks about a likely investment with the messaging-service start-up Snapchat, a move that would be the latest in a string of Yahoo deals with smaller companies.

Decker, a onetime Wall Street analyst who joined Yahoo in 2000 and now serves on several corporate boards, including Berkshire Hathaway, suggested that her former employer would be best served by returning to its core competencies: content about topics such as sports, finance and general news.

"If they could get deeper in the things they're really great in, and shed other things," she said, "I'd like to see that." Yahoo has long struggled with botched attempts to expand by reaching beyond its basic strengths, Decker added, and the company had suffered for it.

"To get identity is going to be critical," Decker said.

In other remarks at the Fortune gathering, Mylan CEO Heather Bresch was somewhat dubious about the role of activist hedge funds in reforming companies in general.

Bresch said hedge funds seem to quickly flip in and out of stock holdings.

"It used to be about building value. Now it's about trading value," she said. "If they hold your stock for five minutes, that's more than their algorithms will let them."


Original Story:

HONG KONG — For American technology companies from Microsoft to Facebook to Google, China is a difficult, even impossible, place to operate.

But one company, the social network LinkedIn, has found a way to do business — by being willing to compromise on the free expression that is the backbone of life on the Western Internet.

LinkedIn’s experience provides a blueprint, and perhaps a cautionary lesson, for Silicon Valley as it tries to crack the vast Chinese market. Other American tech companies are watching with great interest, wondering whether LinkedIn will find an equilibrium between free speech and Chinese law that it can live with.

“Over the next five years, things will continue to progress in a positive fashion over there, so it’s important to be there today,” said Kerry Rice, an Internet analyst at Needham, a brokerage firm. “If LinkedIn figures out how to navigate the operating environment in China, clearly other companies will try to imitate that.”

LinkedIn’s global English-language site has attracted four million Chinese members without gaining much attention from the Chinese government. But the company wanted to reach more of China’s estimated 140 million professional workers, and so in February it introduced a Chinese-language version.

The Chinese-language site has attracted about a million new members and seems to have the tacit approval of the government. It is functioning without blockages even though the authorities have cracked down on other Internet services, including Instagram and Yahoo, in reaction to the pro-democracy protests in Hong Kong.

The secret to LinkedIn’s seeming success? Aside from its willingness to play by Chinese rules on expression, the company has relinquished 7 percent of its local operation to two well-connected Chinese venture capital firms. Having such a relationship with homegrown firms is crucial for foreign web companies seeking to operate in China, experts say.

“The government needs to know who they can call, and as a foreign company you need to know before your site gets shut down so you have a chance to do something about it,” said Duncan Clark, founder of BDA China, a consulting firm that advises foreign companies on China’s tech sector. “That’s worth a lot, to have that channel.”

A spokesman for LinkedIn, Hani Durzy, said the company opened a Chinese-language site because of its “belief that the creation of economic opportunity can have a profound impact on the lives of Chinese individuals, much as it has elsewhere in the world.”

“While we strongly support freedom of expression,” he added, “we recognized when we launched that we would need to adhere to the requirements of the Chinese government in order to operate in China. So the decision to proceed in China was one that we weighed heavily.”

On the Chinese- and English-language sites in China, the company censors content that the authorities consider politically sensitive, using a combination of software algorithms and human reviewers. People whose posts are blocked get an emailed form letter advising them that a posted item contains “content prohibited in China” and “will not be seen by LinkedIn members located in China.”

LinkedIn also does not provide Chinese-language users certain important tools — like the ability to create or join groups or to post long essays — that allow people elsewhere to have public discussions and form communities.

Although LinkedIn’s strategy has given it access to Chinese speakers, analysts say it poses risks for the company’s reputation and growth strategy.

Like many American tech companies, LinkedIn, which is based in Mountain View, Calif., has promoted itself as dedicated to free-market principles. Too much censorship could cause users to flee.

What’s more, if LinkedIn’s business grows larger in China, that could give the government more leverage to make demands about what type of content is permissible globally.

The company has already stumbled a bit in its entry into the Chinese market. It angered some non-Chinese customers, who found that posts they made in English while in China were blocked globally as part of the company’s effort to protect its Chinese users from anything that could attract unwanted government scrutiny. LinkedIn moved to loosen its policy last month, allowing posts blocked in China to be seen elsewhere.

Some also say LinkedIn has not communicated clearly how and why it is censoring content.

For example, Bill Bishop, a media commentator and tech investor in China, said content he posted about China from a connection in the United States was blocked by the service. When he inquired why, the company inaccurately responded that it was because he had posted the item from China, when the real problem was that he had listed China as his work location.

Other tech companies have weighed the risks of trying to satisfy the Chinese government and taken a different approach.

Google, which once acceded to China’s demands to censor content in the country, noisily reversed course in 2010, moving to deliver uncensored results to Chinese users from servers in Hong Kong and souring its relationship with the authorities to this day.

Twitter has been blocked in China for years and says it will not censor posts because to do so would “sacrifice the principles of the platform,” according to Colin Crowell, the company’s vice president for global public policy.

Vine, a short-video service owned by Twitter, operates freely in China without “any special arrangement,” Mr. Crowell said.

Although Facebook — the world’s largest social network, with about 1.3 billion monthly users worldwide — is blocked in China, it hasn’t given up on getting in the country. But it is trying to use commerce to pry open the door, selling ads to Chinese companies and government organizations that want to reach consumers outside China.

Facebook is also studying the experience of Instagram, its separately operated photo-sharing app, which is growing quickly with only occasional blockages by the Chinese government.

“We think this is an exciting opportunity,” Dan Neary, the company’s vice president for Asia and the Pacific, said in a statement.

Analysts say LinkedIn is well positioned to be acceptable to Beijing because it can argue that it makes the employment market more efficient, ultimately spurring the economy. China’s Internet regulators often argue that the main goal of development of the Internet should be to bolster economic growth.

China’s closed markets have given a huge head start to four homegrown companies, which dominate the Internet there: Alibaba in e-commerce, Baidu in search, Tencent in video gaming and instant messaging and Sina in social networking.

LinkedIn itself faces competition from local rivals like Zhaopin and, which both have more users than it does in China.

LinkedIn’s partnership with two local players — China Broadband Capital and a Chinese affiliate of Sequoia Capital, an American venture capital firm — has helped it manage its relationship with government officials.

C.B.C. was founded by Edward Tian, a well-connected investor and former entrepreneur who once ran a telecommunications company with the son of a former Chinese president, Jiang Zemin. The company has helped bring at least one other Silicon Valley company, Evernote, into China.

“There have been a lot of problems with companies like Facebook and Twitter,” said Kevin Wang, a C.B.C. spokesman. “We think one of the key reasons is the lack of communication, even the absence of communication, between these companies and the Chinese government.”

The local partners have a strong incentive to help LinkedIn succeed. Under the partnership agreement, they can buy an additional 21 percent of the joint venture for $20 million if certain conditions are met.

LinkedIn does retain control of the venture, securing the bulk of the profit as well as the risk.

Under Chinese law, the joint venture will eventually need to obtain an Internet content provider’s license to keep operating. The license has some benefits, but also some downsides; once granted, the company will be required to store information about its Chinese users in China.

Doing so would make it much easier for the government to demand information on, say, dissidents who use the service — a conundrum that tripped up Yahoo nearly a decade ago and prompted that company to essentially pull out of the country.

Despite the challenges, LinkedIn is optimistic about its efforts in China.

“In the end, the most important consideration for us was providing an opportunity for millions of Chinese professionals to significantly expand their economic opportunities,” said Mr. Durzy, the LinkedIn spokesman. “We want to get it right in China, so we will continue to listen and learn."


Original Story:

Hewlett-Packard confirmed on Monday that it planned to break into two companies.

The company, considered a foundational institution of Silicon Valley, said in a news release that it intended to divide itself into a company aimed at business technology, including computer servers and data storage equipment, software and services, and a company that sells personal computers and printers.

Both companies will be publicly traded. The business-oriented company will be called Hewlett-Packard Enterprise, while the PC company will be called HP Inc. and will retain the company’s current logo. The transaction is expected to be completed by October 2015, the end of HP’s fiscal year, the company said.

In a statement, Meg Whitman, HP’s chief executive, said the company was splitting up to “more aggressively go after the opportunities created by a rapidly changing market.”

While Ms. Whitman, who became chief executive in 2011, depicted the historic decision as a natural part of her five-year turnaround plan, she had previously resisted the idea of breaking up the company. HP was one of the world’s top buyers of semiconductors and other computer parts, she had argued, giving it pricing power superior to its rivals.

Dividing in two, she said on Monday, “will provide each new company with the independence, focus, financial resources, and flexibility they need to adapt quickly to market and customer dynamics.” This will make HP more competitive, she said.

Ms. Whitman will retain much power at both companies. She will be chief executive of Hewlett-Packard Enterprise and will serve as nonexecutive chairman of HP Inc. Patricia F. Russo, currently a director of HP, will be chairwoman of Hewlett-Packard Enterprise. Dion Weisler, now head of HP’s printing business, will be president and chief executive of HP Inc.

The company also added to the number of prospective job cuts. In an earlier conference call with analysts, it said it had “identified opportunities for incremental improvements” in its plan to eliminate a total of 50,000 jobs through layoffs and retirements. It now expects the number to be 55,000.

The company said its financial analysts’ meeting, scheduled for Wednesday, had been postponed.

“HP’s board and management have made a brilliant value-enhancing move at the perfect time in the turnaround,” Ralph V. Whitworth, founder of Relational Investors and a former Hewlett chairman, said in a statement on Monday. “The new companies will be better positioned to address today’s light-speed market dynamics and customer needs, and with distinct and compelling financial profiles and strong leadership teams, accelerate growth and shareholder value creation.”

The company’s shares closed up 4.7 percent Monday at $36.87, a gain of $1.67.

In a little over a year, stalwarts like Microsoft, IBM and Dell have changed chief executives, sold big parts of their businesses or gone private. All of them, along with a host of other companies that became behemoths during a 20-year boom in personal computing and the Internet, are rushing to cope with the rise in mobile devices connected to cloud systems.

Cloud computing uses software to turn numerous computer servers, sometimes a million or more, into single entities. These flexible systems can distribute work with greater efficiency, cutting the overall need for servers, and interact easily with other computers, whether in clouds, PCs, or mobile devices.

Winners in the new landscape include Apple, the king of consumer electronics, with annual revenue of $170 billion. The company makes iPhones, iPads, and hosts through its online stores a wealth of cloud-based software applications. South Korea’s Samsung, the other big winner in smartphones, has dominated the competition, forcing onetime leader Nokia into a sale of its phone business to Microsoft.

In business computing, Amazon’s cloud-based rentals of computer power and software to businesses, Amazon Web Services, has sharply lowered the cost of starting a company and hosts businesses like Netflix, Pinterest, and Airbnb. Many established businesses also use Amazon Web Services, which is estimated to have well over a million computer servers. Google has built online word processing and spreadsheet businesses that threaten Microsoft, and is challenging Amazon Web Services for the corporate cloud business.

HP was long the world’s largest computer company, though there has been much turmoil in recent years. The two businesses resulting from the proposed split almost evenly divide HP’s fiscal 2013 revenue of $112 billion. On their own, both would easily fit in the top half of the Fortune 500.

HP’s split is not the first time the company has hewed itself in two to cope with changing times. In 1999, its test and measurement equipment division was started as a separate company, called Agilent. Shares in Agilent rose 41 percent on their first day, and the company was completely spun off HP in 2000. The stock was already declining by then, however, and today Agilent has a market capitalization about equal with its first day’s value.

Agilent, as the name suggests, was also split off in the interests of agility, at that time in the face of the first Internet boom. While HP benefited in those years from PC and server sales, management also felt the company was not moving fast enough for a changing world.


Original Story:

The huge cyberattack on JPMorgan Chase that touched more than 83 million households and businesses was one of the most serious computer intrusions into an American corporation. But it could have been much worse.

Questions over who the hackers are and the approach of their attack concern government and industry officials. Also troubling is that about nine other financial institutions — a number that has not been previously reported — were also infiltrated by the same group of overseas hackers, according to people briefed on the matter. The hackers are thought to be operating from Russia and appear to have at least loose connections with officials of the Russian government, the people briefed on the matter said. An Atlanta Intellectual Property Lawyer assist clients in protecting their intellectual property and exclusive technologies.

It is unclear whether the other intrusions, at banks and brokerage firms, were as deep as the one that JPMorgan disclosed on Thursday. The identities of the other institutions could not be immediately learned. A Boston Intellectual Property Lawyer has experience in protecting the intellectual property assets of their clients.

The breadth of the attacks — and the lack of clarity about whether it was an effort to steal from accounts or to demonstrate that the hackers could penetrate even the best-protected American financial institutions — has left Washington intelligence officials and policy makers far more concerned than they have let on publicly. Some American officials speculate that the breach was intended to send a message to Wall Street and the United States about the vulnerability of the digital network of one of the world’s most important banking institutions. A Boston Business Lawyer is reviewing the details of this case.

“It could be in retaliation for the sanctions” placed on Russia, one senior official briefed on the intelligence said. “But it could be mixed motives — to steal if they can, or to sell whatever information they could glean.”

Ways to Protect Yourself After the JPMorgan Hacking

The JPMorgan hackers burrowed into the digital network of the bank and went down a path that gave them access to information about the names, addresses, phone numbers and email addresses of account holders. They never made it into where the more critical financial information and personal information are stored.

The bank’s security team, which first discovered the attack in late July, managed to block the hackers before they could compromise the most sensitive information about tens of millions of JPMorgan customers, said several security experts and others briefed on the matter. The attack was not completely halted until the middle of August and it was only in recent days that the bank began to tally its full extent.

American officials say they have been working with JPMorgan since the intrusion was detected, chiefly through the Treasury, the Secret Service and intelligence agencies that seek to find the source of the attacks. But that is slow work and one official cautioned against leaping to conclusions about the identities or the motives of the attackers.

“We’ve been wrong before,” he said.

JPMorgan, the nation’s largest bank, has begun contacting customers and making clear that no money was taken from any accounts. There has been no evidence of any fraudulent use of customer information. Most of the household accounts belong to United States residents. The hackers ended up with the addresses, email addresses and phone numbers of everyone who logged into JPMorgan’s websites and mobile applications in the recent past.

Still, the recent attacks on the financial firms raise the possibility that the banks may not be up to the job of defending themselves. The attacks will also stoke questions about regulations governing when companies must inform regulators and their customers about a breach.

“It was a huge surprise that they were able to compromise a huge bank like JPMorgan,” said Al Pascual, a security analyst with Javelin Strategy and Research. “It scared the pants off many people.”

Several financial regulators have warned that a coordinated attack on the banking system could set off another financial crisis.

On Friday, George Jepsen, the Connecticut attorney general, opened an investigation into the breach at JPMorgan, while Benjamin M. Lawsky, New York’s top financial regulator, began calling bank officials to warn them to take the threat more seriously.

“There needs to be far more urgency,” Mr. Lawsky said in an interview.

JPMorgan has also been working with law enforcement, including the F.B.I., since shortly after detecting the intrusion, which affected about 90 of the bank’s computer servers. The bank said it believed that its systems were now secure and that the threat of the hackers’ returning was over.

“To date, we have not seen any unusual fraud activity related to this incident,” said Kristin Lemkau, a bank spokeswoman. “We have identified and closed the known access paths. We have no evidence that the attackers are still in our system. We have apologized to our customers.”

But much remains unanswered about the intrusion, including just who the hackers are, which other financial institutions were hit and why the hackers went down a path inside JPMorgan’s computer system that contained troves of customer information, but not financial data.

The intrusion also highlights a possible gap in United States regulations. Banks are not required to report data breaches and online intrusions unless the incident is deemed to have resulted in a financial loss to customers. Breach notification laws differ by state, but most laws require only that companies disclose a breach if customer names were stolen in conjunction with other information like a credit card, Social Security number or driver’s license number.

In some states, companies can wait up to a month to inform customers of a breach. Other state laws are more vague.

In California, for example, banks, companies and large organizations must inform the state attorney general’s office and consumers about a breach without unreasonable delay — a rule that some companies interpret liberally, officials say. This year, Kamala Harris, the California attorney general, sued the Kaiser Foundation Health Plan, saying that it took four months for the foundation to disclose to some employees that their personal information may have been compromised.

For years, there have been attempts in Congress to force companies to inform customers more quickly when their information has been compromised, but recent bills have failed to muster enough support. One bill, sponsored by Senator Edward J. Markey, Democrat of Massachusetts, would create a clearinghouse where companies could exchange information about attacks.

United States bank executives say privately that they already share intelligence informally about attacks, which are occurring frequently on their systems.

This summer, Treasury Secretary Jacob J. Lew called on Congress to pass legislation that he said would bolster the information sharing process.

“As it stands, our laws do not do enough to foster information sharing and defend the public from digital threats,” Mr. Lew said.

That the hackers were apparently able to move around JPMorgan’s computer system undetected for several weeks is perhaps the most troubling aspect of the recent breach, officials at other large banks say.

The hackers were able to attain high administrative privileges within JPMorgan’s network, rooting more than 90 servers and rummaging through customer databases with detailed information for 76 million households and seven million small-business online accounts.

As they looked around, according to one person with knowledge of the breach, the hackers gleaned some critical details of customers’ accounts. With these, the hackers were able to determine whether the accounts fell within the private bank or in other business categories like mortgages.

Some people briefed on the results of the attack contend that it was only a matter of time before attackers could have gained access to customer funds and critical personal data.

Weeks into the attack, in mid-July, unusual behavior on the bank’s network was spotted, and the attackers were stopped before they had a chance to pull any customer data back to their servers abroad.

But they did make off with one file which has unnerved executives. That file contained a list of every application and program deployed on standard JPMorgan computers that hackers can crosscheck with known, or new, vulnerabilities in each system in a search for a backdoor entry.

Swapping out those programs is costly and time-consuming, people say, because the bank would have to renegotiate licensing deals with technology suppliers and swap out programs and applications for hundreds of thousands of bank employees.

As one former employee explained: “It’s as if they stole the schematics to the Capitol — they can’t just switch out every single door and window pane overnight.”

The attack came after a recent turnover within JPMorgan’s information security group.

A number of staff members followed Frank Bisignano, JPMorgan’s former co-chief operating officer, to First Data last year. This year, First Data agreed to pay JPMorgan over accusations that by wooing other executives to the payment processor, Mr. Bisignano had violated the terms of his former employment contract.

By then, First Data had already hired JPMorgan’s chief information officer, Guy Chiarello; its cybersecurity czar, Anthony Belfiore; its head of compliance, Cindy Armine; and Tom Higgins, JPMorgan’s head of operation control.

Anish Bhimani, the bank’s chief information risk officer, remained. Mr. Bhimani, who is well respected in the cybersecurity industry, is a co-author of a 1996 book on cybersecurity, “Internet Security for Business.”

Ms. Lemkau said the bank was pleased with its current cybersecurity personnel. “This is the highest-quality team we have ever had,” she said.

Last December, JPMorgan hired Dana Deasy as chief information officer from BP. Greg Rattray, a former Air Force lieutenant colonel who specialized in cyberdefense was named the head of information security in June.

Challenges quickly followed. That same month, hackers found a way into the bank’s systems.


Original Story:

Yahoo, flush with cash from selling a portion of its stake in the Alibaba Group, appears ready to bet on what it believes will be the next big Internet phenomenon.

The company has held talks to invest in Snapchat — a popular app that allows people to share photos and messages that self-destruct — people briefed on the matter said on Friday. The deal has not yet closed, some of these people added.

Should Yahoo make the investment, it will join other prominent investors, including the venture capital firm Kleiner Perkins Caufield & Byers, who have valued the service at about $10 billion.

While Yahoo is not expected to put a huge amount of money into Snapchat, the investment could give it access to the messaging phenomenon and help Yahoo become more relevant to young consumers. It would also give the company a more strategic stake in mobile technology, an area in which Yahoo has long been seen as a laggard compared with competitors like Facebook and Google.

Yahoo has been bolstered by a roughly $6 billion haul from selling a significant portion of its holdings in Alibaba, the large, fast-growing Chinese e-commerce company that went public last month. At least half of the proceeds from the sale will go toward buying back stock, but some of the money could go toward strategic acquisitions and investments.

Talks between Yahoo and Snapchat gained steam late this summer, some of the people briefed on the matter said.

In that vein, Yahoo confirmed that it recently bought MessageMe, a small photo and text-messaging start-up in San Francisco. For Yahoo, it is another in a string of acquisitions of small mobile start-ups, which began soon after Marissa Mayer, Yahoo’s chief executive, took the top position in 2012. That strategy could expose Yahoo to criticism from shareholders leery that the Alibaba windfall will lead to another spending spree. Though Snapchat has millions of regular users, who send hundreds of millions of photos and videos every day, it has yet to generate any revenue.

The young company attracts attention in Silicon Valley circles, particularly because of its popularity in the much coveted millennial demographic. Snapchat, which is based in Venice, Calif., has raised more than $160 million in venture capital; last fall, the company spurned a $3 billion acquisition offer from Facebook.

Snapchat has been experimenting with ways to distribute content on its popular network. It has worked with musicians, large brands and popular users to figure out different ways to distribute “snaps” — the company’s name for its disappearing messages — that will keep its members coming back regularly.

This could be where the two companies see eye to eye. Ms. Mayer has repeatedly said that Yahoo is a “digital content company at its core” and has worked to increase its content offerings.

The company has commissioned two television-length comedy series that will air exclusively on Yahoo’s mobile apps and website. Last fall, Ms. Mayer hired Katie Couric, the seasoned journalist who has been the anchor of news programs for NBC, CBS and ABC, to be Yahoo’s global news anchor.

Ms. Couric recently attended a small private party thrown by Snapchat’s founders during Advertising Week, an annual media industry event held in New York, according to a person familiar with the guest list.

Representatives for Yahoo and Snapchat declined to comment or did not respond to requests for comment on the talks, which were reported earlier by The Wall Street Journal.