Friday, January 31, 2014
Snapchat turned down Facebook's offer of 3 Billion Dollars!
Ever since Snapchat turned down a $3 billion all-cash offer from Facebook this past November, there’s been no shortage of discussion about it and the rest of its photo-sharing-and-messaging service cohort, which includes WhatsApp, Kik, Japan-based LINE, China-based WeChat, and Korea-based Kakao Talk. Explanations for this phenomenon have ranged from the need to redefine identity in the social-mobile era to the rise of ephemeral, disposable media.
Regardless of why this trend is taking off, it’s clear that the so-called messaging “wars” are heating up. As always, the euphoria over hockey-stick user growth numbers soon gives way to the sobriety of analysis, yielding the inevitable question: Can they monetize? Snapchat, with its massive (paper) valuation is at the vanguard of such criticism, especially given the irony that the service is essentiallydeleting its biggest asset – its data.
So, how can Snapchat effectively monetize without its user data? By operating its service — and in particular, its infrastructure — an order of magnitude cheaper than its competitors.
Surprisingly little time has been spent examining how one can rethink a storage-centric infrastructure model for this kind of disappearing data model. Thinking about system architecture isn’t just relevant to engineers; it has important implications for helping services like Snapchat save — and therefore make — money. (By the way, that amount would need to be about $500 million revenue and $200 million profit to justify its $3 billion valuation in November.)
It’s very simple: If the appeal of services like SnapChat is in the photos (“the fuel that social networks run on”), then the costs are in operating that photo sharing-and-serving service, as well as running anymonetization — such as ads — built on top of that infrastructure.
But I’d even go so far to argue that making use of advanced infrastructure protocols could let Snapchat get away with paying almost no bandwidth costs for a large subset of media. How? Well, let’s begin by comparing Snapchat’s infrastructure to that of a more traditional social network: its erstwhile suitor, Facebook.
According to publicly available data, Facebook users upload 350 million images a day. Back when users were adding 220 million photos weekly in 2009, the company was serving upwards of 550,000 images per second at peak — and they did it by storing five copies of each image, downsampled to various levels, in a photo storing-and-serving infrastructure called Haystack. (For obvious reasons, the exact architecture of these systems is not known.)
That gives you a sense of the scope of the infrastructure. But the salient detail here is the total cost of all this serving-and-storage — including all-in per-byte cost of bandwidth — which I estimate to bemore than $400 million a year. [If you want the details, here’s what went into my calculation, which also includes ancillary costs such as power, capital for servers, human maintenance, and redundancy. The most important variables in this cost calculation are:
- the number of images/videos uploaded each month (estimated at ~ 400M photos daily)
- the size of each image/video (estimated at 3MB)
- the average number of images/videos served each month (estimated at 9.5% of all images)
- all-in per-byte bandwidth/serving cost (estimated at $5*10-11)
- all-in per-byte storage cost (estimated at $5*10-11)
- exponential growth rate coefficient (r, estimated at ~ 0.076, using Pt = P0ert).
To compare Facebook’s costs to Snapchat’s, however, we also have to include these variables: the mean number of recipients of each Snapchat message (estimated conservatively at 2.5); and the fraction of total messages that are undelivered (estimated at 10 percent).]
Obviously, we are comparing a much larger service that has advertising — Facebook — to one that is smaller and doesn’t have any advertising (yet). But this doesn’t really matter, in principle. Because even though Facebook has to make sure its infrastructure can store and serve the data needed to sell ads, the reality is that much of the information that helps advertisers target users is the metadata of user interactions — with whom, where, how, and when (as well as what they ‘like’) — as opposed to the content of what those users are actually saying.
By storing and analyzing only the metadata, Snapchat could build similar profiles of its users, and sell ads that target users, as effectively as Facebook.
This means that despite their differences, storing and analyzingonly the metadata would still allow Snapchat to build similar profiles of its users as Facebook. Snapchat could thus sell ads that target users just as Facebook does (assuming of course that their product can attract a consistent customer base) — and with one huge advantage: lower costs, since Snapchat doesn’t need to store or serve any messages after they’ve been delivered.
This kind of approach to user targeting, with its metadata-centric infrastructure and associated cost savings — is by no means unique to Snapchat. The public revelations about NSA’s surveillance operations point to a similar architecture; storing the entire content of all intercepted communication would be prohibitive in terms of cost and space, but not so for metadata. In fact, the way the metadata is ostensibly used to target individuals and groups NSA agents deem to be a threat is not dissimilar to how advertising targeting works. But that’s another discussion.
What makes Facebook’s — and any other traditional social network’s — photo-serving costs so expensive is having to keep data in a high-availability, low-latency, redundant, multi-master data store that can withstand temporary spikes in traffic load. But much of this expense is unnecessary for storing and processing metadata. Based on some additional assumptions (such as the number of recipients of each message), we can estimate that, even if its per-byte storage costs were 5x higher, Snapchat would only need to pay $35 million a year (under 9 percent of Facebook’s total estimated infrastructure costs) to handle a similar load — all while accruing a trove of data with similar targeting value.
It’s like getting a mile when you’re only giving an inch.
So how could Snapchat reduce their bandwidth and storage costs even further? The key, again, is in the seemingly mundane: infrastructure. There are a number of complicated optimizations that could make the system even cheaper to operate. For example, Snapchats between parties that are concurrently online could be delivered via peer-to-peer messaging (think Skype). Because these messages would never even flow over Snapchat’s network, it would reduce Snapchat’s delivery costs to nearly nothing.
It’s not just theoretical. Firewalls are an impediment, of course, but a number of solutions, including proxy servers in the edge of the network, or ICE (RFC 5245) could make the above doable relatively soon. Snapchat could even store encrypted, undelivered messages on other users’ phones, ensuring availability by using erasure coding with sufficient redundancy. This technique basically involves splitting media up into many overlapping pieces (only a few of which are needed to reconstitute the entire picture); giving the data to different users (encrypted so that no one other than the recipient would be able to glean any information from it); and assuming with high probability that enough users will be online at any time to reconstruct the data.
While it’s hard to guess what fraction of messages are exchanged between parties that are online, the impact of such infrastructure design would definitely be substantial.
The fact is, this new generation of messaging services can use cost-effective infrastructure to operate so much more cheaply than the Facebooks of the world and yet still effectively target ads to users. While it would seem that not storing content would be an obstacle to monetization, that design feature turns out to be an asset when working from metadata. The question that remains isn’t how they’ll monetize; it’s whether these services can make a compelling enough product to keep users coming back for more.
*All information and images does not belong or relate in anyway to BYTE ME, LLC.
Content and image resources: http://www.wired.com/opinion/2014/01/secret-snapchats-monetization-success-will-surprise/
Original post by: VIJAY PANDURANGAN
See why BOX secretly filed for a IPO!
Box, the online storage company, has secretly filed paperwork for an initial public offering, according to a source.
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That means Box could start trading as a public company before its chief rival,Dropbox. Both are among the most anticipated tech IPOs of this year.
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A new law allows companies with less than $1 billion in annual revenue to confidentially file drafts of their IPO prospectus with the US Securities and Exchange Commission. Twitter is the most prominent company to have taken advantage of this provision of the JOBS Act. We’ve already declared 2014 to be “the year of the secret IPO.”
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“We don’t have anything to share at this time. We’re focused on continuing to build our business and expand our customer relationships globally,” a Box spokesman told Quartz in an emailed statement.
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Box has already tapped banks, including Morgan Stanley, Credit Suisse, and JP Morgan Chase, to help underwrite it stock offering. It raised more than $100 million(paywall) in 2012, at a valuation of more than $1 billion. The venture-backed firm run by under-30 wunderkind Aaron Levie could be looking to raise about $500 million in an IPO.
Dropbox recently raised $250 million in a funding round led by a BlackRock investment fund; its valuation was $10 billion. Dropbox has traditionally focused on consumers but more recently pushed to expand into the corporate world. Box, by contrast, is going after consumers after building an enterprise storage business. Itrecently offered 50 gigabytes of free storage to users of its new mobile apps.
*All information and images does not belong or relate in anyway to BYTE ME, LLC.
Thursday, January 30, 2014
Pocket Gem reported $82 Million in Revenue last year alone!
Sequoia Capital-backed mobile gaming company Pocket Gems is releasing revenue numbers for the first time, saying that it saw $82 million in revenue last year.
That’s a best for the company, which was founded in 2009, and reflects 32 percent year-over-year growth. Pocket Gems also says that it remains profitable and now has 175 employees.
The revenue comes primarily from in-app purchases. CEO Ben Liu said one of the keys to the company’s success has been its early focus on the free-to-play gaming model, with “very little advertising.” (According to an eMarketer report last year, full download fees remain the biggest source of revenue in the U.S. mobile games industry, but they’ll be overtaken by in-app purchases in 2014.)
Liu added that even though mobile gaming is one area of tech where Silicon Valley (and the rest of the United States) hasn’t been leading the way, “We think that’s about to change. We’re about to enter a period of major technological changes and disruptions where it’s going to be really hard to engineer the best products.”
In Pocket Gems’ case, he said the company will be launching a new 3D engine for multiplayer mobile games later this year.
More broadly, he said Pocket Gems is planning “a couple of big releases” that are meant to showcase its approach to two big questions: “How does it mean to experience a story on mobile?” and “What does it mean to play with your friends on mobile?” On the first question, Liu suggested that attempts at storytelling in mobile games have been “rudimentary.” On the second, he noted that the social mechanics in most mobile games are asynchronous or focused on promoting the game virally. (Pocket Gems’ is already placing a big emphasis on live multiplayer gameplay.)
The company announced last year that its titles, which include Tap Paradise Cove & Animal Voyage: Island Adventure (pictured above), had seen more than 100 million downloads.
*All information and images does not belong or relate in anyway to BYTE ME, LLC.
Content and image resources: http://techcrunch.com/2014/01/30/pocket-gems-revenue-2013/
Original post by: Anthony Ha
http://byteme.ccWednesday, January 29, 2014
Facebook saved over a Billion Dollars! (See How)
Facebook is reaping the benefits of designing its own energy efficient servers. Today at theOpen Compute Summit, CEO Mark Zuckerberg said that “In the last three years alone, Facebook has saved more than a billion dollars in building out our infrastructure using Open Compute designs.”
Facebook started the Open Compute Project back in April 2011 and its since blossomed into an industry-spanning coalition of companies that open source green technology designs for servers, data centers, and more. It includes Intel, AMD, Bloomberg, Box, Cumulus Networks, IBM, and Microsoft.
While the Open Compute Project has saved the world a lot of energy, it’s also cut back on energy Facebook would have had to pay for. Zuckerberg proudly told interviewer Tim O’Reilly on stage at the Summit that “In just the last year we’ve saved the equivalent amount of energy of 40,000 homes in a year, and saved the amount of emissions equivalent to taking 50,000 cars off the road for a year.”
Considering that recently the average US houshold used 903 kilowatt hours per month at an average price of $0.1209 per kilowatt hour, that means Facebook could have saved somewhere in the ballpark of $52 million in energy thanks to Open Compute designs.
Facebook’s VP of Engineering Jay Paraikh also noted that over the past three years, Open Compute designs have let Facebook save $1.2 billion.
Along with helping the environment, the project lets Facebook crowdsource improvements to its infrastructure and allows multiple vendors to produce identical equipment that gives Facebook supply chain diversity. The whole thing is probably a great engineer recruiting tool too.
From a high-level, Open Compute fits nicely with Internet.org — a project designed to make basic Internet devices and data connections affordable to five billion people still disconnected. Together they illuminate Facebook’s recent modus operandi: figuring out ways to help the world that also save it money or expand its empire.
*All information and images does not belong or relate in anyway to BYTE ME, LLC.
Content and image resources: http://techcrunch.com/2014/01/28/facebook-open-compute/?source=gravity
Are we ready for this new Super Credit Card?
Coin, a YC-backed company looking to thin down your wallet, is currently in the process of raising around $15 million in Series A funding, according to multiple sources familiar with the matter.
Led by Kanishk Parashar and K9 investor/board member Manu Kumar, Coin offers a replacement for every credit card in your wallet. It swipes just like a credit card normally would, but with a button to switch between your AMEX, your personal Visa and your corporate credit card. But it does more than just slim your wallet.
The company put the Bluetooth-powered wallet up for pre-order in November using their own crowdfunding campaign, and blew past the $50,000 goal in less than 40 minutes. Coin promised to get first shipments out by this summer.
According to sources, the company needed to raise a Series A to cover production costs in the midst of unexpected and overwhelming demand. (I pre-ordered, too.)
Though the raise is imminent, it is unclear which investors are playing in the round. Rumors suggest that Redpoint may be involved. We have also heard that Coin has hired several new engineers, which could signal that they are expecting a cash infusion soon, or even that the round has already closed.
Prior to this, Coin had raised $1.5 million in seed funding from K9 Ventures, SoftTech VC, and Y Combinator, according to Crunchbase.
Coin creator and engineer Kanishk Parashar originally started a payments company called SmartMarket before moving on to develop a credit card replacement.
Pairing with your smartphone, Coin ensures that you never leave your credit card behind through alerts, and has sophisticated security features that recognize fraudulent activity the moment that someone tries to steal CC information. (Oftentimes, credit card owners aren’t aware that their credit card info has been stolen until the thief tries to use the card, not when they first steal the information.)
The price for such a device? $50, plus $5 shipping, as long as you participate in the pre-order phase. Once the device goes on sale officially, it will cost $100.
The company faced as much criticism as it did hype when pre-orders first opened, but has done a good job of answering questions.
This is hardly the first time a company has tried the all-in-one card strategy, nor is it the first time consumers have embraced it. In 2012, the press were similarly excited about a device called the Protean Echo, which is still listed as shipping soon. Flint is another startup dabbling in the consumer payments space.
Clearly, an evolution in the way we pay for things is on the horizon. The question, rather, is whether or not Coin will join Square and Stripe and Bitcoin and others as a major player in the revolution.
If you’re interested in learning more about Coin, check out TC writer Ryan Lawler’s interview with CEO and co-founder Kineshk Parashar below:
All information and images does not belong or relate in anyway to BYTE ME, LLC.
Content and image resources: http://techcrunch.com/2014/01/28/sources-coin-is-raising-more-cash/
Original Post by Jordan Crook
Tuesday, January 28, 2014
Tim Cook of Apple Inc. in China
The iPhone is finally available for sale in China Mobile stores after Apple spent years negotiating for a deal with the carrier, the world’s largest by subscriber number. In a sign of how important the partnership is to Apple, CEO Tim Cook showed up at the China Mobile launch today to meet customers, pose for pictures, and autograph iPhones.
China Mobile has 740 million subscribers, but competing carriers China Unicom and China Telecom have already carried the iPhone 5s and 5c since September. As The Next Web points out, China Mobile subsidies are also pricier. For example, China Mobile users can get a 16GB iPhone 5s for free if they commit to a 24-month plan for about $97 per month, or they can pay about $625 for the same phone if they get a 24-month contract for $31 per month. But China Unicom subscribers get an iPhone 5s for free when they commit to a 30-month contract for $63 per month. China Telecom users also get a free iPhone 5s by signing up for a 24-month contract at $64 per month.
China Mobile’s contracts are less attractive than its two competitors, but it can afford to charge a premium partly because it uses a TD-LTE standard for its 4G networks, making its network speedier than its two competitors.
So far, the deal appears to be paying off for Apple. Earlier this week, Cook said that Apple sold more iPhones in the Greater China region than it has at any time previously, which means it moved over 10.4 million iPhones there after selecting China as an iPhone launch market for the first time ever. The China Mobile deal will also bring the iPhone to cities where it was previously unavailable, with the devices now sold in 3,000 more locations.
Cook also said he was unconcerned about competition from inexpensive Android devices, stating that 57% of mobile browsing in China happens on iOS hardware. But Android devicesalready hold a 66% market share, according to research firm Umeng, and there is still plenty of room left for growth in China’s mobile market, especially as more users in China’s “second-tier” cities buy their first smartphone. Android smartphones cost just an average of $233, so Apple still has plenty of competition even with the China Mobile deal.
Image: Sina Weibo
All information and images does not belong or relate in anyway to BYTE ME, LLC.
Content and image resources: http://techcrunch.com/2014/01/16/tim-cook-celebrates-china-mobiles-iphone-launch/
iPhone 6 Rumors "iPhone 6 Air"
Are you sitting comfortably? Good. This could take a while. The iPhone 5S is less than six months old, but rumors are gathering about its replacement, which should – if previous versions are anything to go by – be called the iPhone 6. Will it be bigger, or stay the same size? Will it have standout features? Will it be joined by an iPhone 6C, or the iWatch?
None of these questions and many more will be answered until Tim Cook takes the stage later this year, but we can’t wait until June or September. We’re just not that patient. So, we’ve collected all the latest gossip we’ve heard right here. We hope you enjoy.
Surprise … it’s probably named iPhone 6
How long can Apple keep adding an ever-increasing number to the name of its latest iPhone? It gave up with the iPad after two models, and decided to add the word Air to the most recent iteration, signifying how slim and light it had made the tablet. Depending on the specs of the next iPhone, it could do the same here.
It could launch as early as May or June
Calm down, man. We haven’t even talked about the specs yet. But, since you’re so keen to know, let’s talk about the release date now. For the last few years Apple has announced its new iPhone around September or October. A sensible gambling man would bet on this trend repeating in 2014.
Juniper estimates 5+ inch devices will see sales of 120 million by 2018.
Just before Christmas, DigiTimes chimed in with some anonymous gossip from within the supply chain, saying Apple plans to release its next iPhone for May 2014, just seven months after the iPhone 5S went on sale. (No, it doesn’t sound all that likely to us.) Tech industry observer Eldar Murtazin disagrees, and tweetedthat Apple is eyeing a June release, so it can better battle new Android phones from Samsung and HTC. Jefferies analyst Peter Misek also said a June or late summer release is possible.
Why all the excitement over a June launch? It’s the month during which Apple is expected to hold its annual Worldwide Developer Conference. The iPhone has been absent from WWDC for years, and rumors of its return crop up often. Will 2014 be the year they come true, or must we wait until after summer once again?
Bigger screens, more iPhones
Wow. You’re eager. We’re getting to the screen. Apple has made the most of a 4-inch screen for two generations (years) now, and while it’s perfectly acceptable – go on, admit it – there’s no denying the industry is shifting towards smartphones with considerably larger displays. Juniper Research estimates that devices with 5+ inch screens will see sales of 120 million by 2018, considerably more than the 20 million in 2013. Surely Apple can’t ignore the trend much longer?
We may get a 4.7-inch iPhone and a 5.7-inch iPhone/iPad hybrid.
According to Chinese analyst Sun Changxu, Apple may keep its current 1136 x 640 pixel Retina resolution on the 4.7-inch screen. This would see the pixel density fall to around 280ppi, way below the 326ppi seen on every iPhone since the iPhone 4. Crucially though, it would be above the iPad’s pixel density. Apple bases its Retina status on viewing distance – 10-inches for the phone, 15 for the tablet – so a larger phone screen could add a few inches to the optimum viewing distance, and keep it within Apple’s self-imposed parameters for ‘Retina.’
Alternatively, researchers from DisplaySearch in Taiwan indicate Apple will give the 4.7-inch screen a 1280 x 720 pixel resolution, resulting in a 312ppi pixel density rating. As for the 5.7-inch hybrid, DisplaySearch says it may have a 1920 x 1080 pixels, matching just about every 2013 high-end Android phone.
n increase to 4.7 or 5.7-inches isn’t universally agreed upon – not even close. Peter Misek says Apple will plump for 4.8-inches, while a Wall Street Journal reporter claimed Apple was busily testing hybrid devices with 6-inch screens. Long-time Apple rumor devotees will recall talk of the iPhone Math (or iPhone+, as it may have really been known), a monster-sized iPhone discussed before the announcement of the iPhone 5S.
It’s worth considering that prototype iPhones probably exist with all these screen sizes. Apple may have tested them all out at one time, or has made a few to throw us off track. Just because they exist though, doesn’t mean they’ll make it into production.
Super slim 6mm body
That’s a very good question, and one which fits in with the idea Apple may chose to name the next model the iPhone Air. The iPhone has never been a bloater, but rumors have spread the next generation may be much thinner than before. Korean news source ETNews.com quotes sources from the Chinese IT media, who say Apple may shave 1.6mm off the iPhone 5S’ thickness to make a 6mm iPhone.
A Chinese website published a picture of what it claimed was the iPhone 6’s chassis. It looks both slim and large, but it could also be completely fake, or not related to the iPhone at all. Only time will tell on this one.
Better camera and iOS 8
There are a few rumors regarding the introduction of 802.11ac Wi-Fi, which came to Mac computers recently, along with a 128GB storage capacity. The camera could get an upgrade to 13-megapixels, although not everyone agrees, with others indicating the existing 8-megapixel camera will see improvements.
The iPhone 6 will logically come with iOS 8 installed, and although nothing has been heard about it at this early stage, it’ll be interesting to see where Apple takes its newly redesigned OS next.
Solar sapphire screens and no Home button at all
Here’s one of the crazier theories around. The next iPhone(s) could have sapphire screens with a special solar layer inside them that will help keep the iPhone charged. It’s not as implausible as you might think, either.
Almost a year ago, GT Advanced, which now has a major contract with Apple, showed us how sapphire could make smartphone screens nearly indestructible. At the time, the company told us that if a large vendor used sapphire to scale, its price would get cheap enough to integrate into a major product. A $578 million contract with Apple is probably enough to do just that. Reportedly, Apple is creating a facility in Arizona to build these components.
Then comes solar charging screens, which we saw demonstrated at CES this year. Though 3M and SunPartner told us that their screens wouldn’t be ready until 2015, Matt Margolis of Seeking Alpha believes that this type of solar screen is being built in the Arizona facility. While he could be right, we’re uncertain this innovation will appear on the iPhone 6, especially given the rumors of how thin it will be. There’s little room for more screen layers in a 6mm phone.
Sapphire screens aside, meaning those less likely to come true, we’ve got an old report which talks about the abolishment of the Home button. Instead, some believe that the new phone will rely more on gesture controls to navigate around the OS. It sounds plausible, but Apple will have to find somewhere else to put its new fingerprint sensor, something which wasn’t known when this aging report was published. A Forbes article by Anthony Kosner suggests Apple’s upcoming mobile payments platform will integrate a Touch ID fingerprint sensor into the entire screen of the next (big) iPhone, eliminating the need for a Home button. Again though, this will add yet another layer to the thickness of the screen, which diminishes speculation that this will be a super thin 6mm phone.
It’s also possible the iPhone 6 will have the first liquidmetal chassis. This has been a long-standing rumor, and while Apple has filed many new patents related to the technology, it’s still considered a challenging material with which to work.
Oh, and one more thing…
Yes, there could, and it may be the iWatch. If Apple is going to come out with its own interpretation of the smartwatch this year, it makes sense for it to launch alongside the latest phone. We’ve pulled together all the talk about the iWatch here, so make sure you take a look.
The iPhone 5S was joined by the iPhone 5C when it was announced in 2013, and unless Apple deems the experiment a failure, we should see the iPhone 6C up on stage. However, at the moment, all the attention is being lavished on its more expensive sister phone, the 5S.
That’s about all we have for now (but considering it’s the beginning of 2014, it’s actually rather a lot), but we’ll be updating this article regularly with more juicy iPhone 6 talk.
Content and image resources: http://www.digitaltrends.com/mobile/iphone-6-air-features-release-rumors/#/1
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