TechSpot: June 2015

Tuesday, June 30, 2015

China's Xiaomi names DST partner Chew as chief financial officer

Beijing-based smartphone maker Xiaomi Inc said on Wednesday it has hired private equity investor Shou Zi Chew as chief financial officer, further bolstering its executive ranks in a period of rapid international expansion.Chew, the Hong Kong-based partner of DST Investment Management Ltd, first helped the prominent late-stage technology fund invest in Xiaomi in 2011.Chew's appointment comes at a critical juncture as Xiaomi, one of the world's most richly valued private tech companies at $45 billion, looks to expand its footprint in the global marketplace with recent high-profile debuts in India and Brazil. The four-year-old handset maker, which has swept through the Chinese market with its combination of affordability and chic design, is looking to replicate its success in other large developing markets to justify the $45 billion valuation it received in December from investors including DST, Hopu Investment Management and Singapore sovereign wealth fund GIC.Xiaomi last month named San Diego chip giant Qualcomm Inc's China head Wang Xiang as senior vice president to handle the company's burgeoning overseas partnerships. Chew, one of several bankers who left Goldman Sachs' London office in the late 2000s to join Russian billionaire Yuri Milner's DST, has been involved in the fund's investment in e-commerce firms Alibaba Group Holding Ltd and JD.com Inc, as well as Didi Dache, China's leading ride-hailing app.Although DST's investment in Xiaomi originated from Milner's longstanding relationship with Xiaomi co-founder and chief executive Lei Jun, Chew, a Singaporean national known for his analytical skills, has been a key behind-the-scenes booster for Xiaomi during recent capital-raising deals. In a statement, Xiaomi's Lei described Chew as a successful investor with unique insights and financial skills who "recognized Xiaomi's value early on." (Editing by Christopher Cushing)

Interactive Data Corp taps banks for sale or IPO: sources

Interactive Data Corp, one of the world's largest financial data providers, has hired banks for a potential sale or an initial public offering that could value it at more than $5 billion, including debt, people familiar with the matter said on Tuesday.IDC's owners, private equity firms Silver Lake Group LLC and Warburg Pincus LLC, have asked Credit Suisse Group AG (CSGN.VX) and Goldman Sachs Group Inc (GS.N) to run an auction for the company, the people said.Silver Lake and Warburg Pincus are also working with banks that include Morgan Stanley (MS.N) and Barclays Plc (BARC.L) on an IPO that would take place if the auction attracted offers that did not meet expectations, the people added. The sources asked not to be identified because the matter is not public. IDC did not immediately respond to a request for comment. Representatives of the banks and the private equity firms either declined to comment or did not respond to a request for comment. IDC, a competitor of Bloomberg LP and Thomson Corp (TRI.TO), provides financial data to clients who subscribe to its fixed-income evaluation services, real-time market data, trading infrastructure and analytics. IDC's customers include 48 of the top 50 U.S. banks, 49 of the top 50 global asset managers and all of the top 50 U.S. mutual funds, according to its annual report. Bedford, Massachusetts-based IDC was taken private in 2010 by Silver Lake and Warburg Pincus for $3.4 billion. IDC had adjusted earnings before interest, taxes, depreciation and amortization in 2014 of $362.4 million, up from $351.6 million a year earlier. (Reporting by Liana B. Baker and Greg Roumeliotis in New York; Editing by Steve Orlofsky)

U.S. judge signs off on Sprint's $50 million 'cramming' settlement

A U.S. judge signed off on Tuesday on a $50 million settlement between the Consumer Financial Protection Bureau and Sprint Corp over claims the mobile carrier added unauthorized charges to customer phone bills.In May, U.S. District Judge William Pauley in New York had demanded additional evidence of the deal's fairness before he would approve the agreement, citing a dearth of details in the initial papers filed jointly by the two sides.The settlement is part of a broader deal in which Sprint and Verizon Communications Inc agreed to pay $68 million and $90 million, respectively, to end various government probes into the practice of "cramming," in which mobile carriers charge customers for services such as horoscopes that they never ordered. Last year, AT&T Inc paid $105 million and T-Mobile US $90 million to settle similar probes.Pauley and several other federal judges in recent years have complained that parties seeking court approval for settlements have sometimes viewed their role as little more than applying a rubber stamp. In signing off on the deal, Pauley did not address how his concerns had been met. A spokeswoman for the CFPB declined to comment. A Sprint spokeswoman was not immediately available to comment. The case is Consumer Financial Protection Bureau v. Sprint Corporation, U.S. District Court for the Southern District of New York, No. 14-cv-09931. (Reporting by Joseph Ax; Editing by David Gregorio)

Mexico gives competitors access to Telmex phone networks

Mexico's telecoms regulator said on Tuesday that it will open access to the "last mile" of Telmex telephone network to rivals, in a decision that aims to increase competition in a sector dominated by billionaire Carlos Slim.The move will force Telmex, owned by Slim's America Movil, to let other companies use part of its vast fixed line infrastructure. The "last mile" connects competitors using Telmex's fixed line infrastructure with their end-user customers.The company has 60 days to present terms by which it will offer services to other operators, the Federal Telecommunications Institute (IFT) said in a statement. Spokespeople for Telmex declined to comment. Since declaring America Movil dominant in the sector last year, the IFT has been introducing stricter measures designed to boost access to a sector seen as less competitive than Mexico's peers. America Movil operates around 70 percent of Mexico's mobile and fixed lines. (Reporting by Tomas Sarmiento and Cyntia Barrera, writing by Max de Haldevang; editing by Bernard Orr)

Fintech explosion puts banks in digital firing line

The world’s top banks and insurers are seeing their business models challenged by “fintech” start-ups, which are reshaping what consumers and businesses expect from financial services, industry insiders and experts say. A report out Tuesday from the World Economic Forum (WEF), the Swiss-based corporate think-tank which runs the Davos summit of world leaders, says major disruptions lie ahead for the once highly profitable financial services industry. Foreshadowing the end of the friendly local bank manager, UK regulators last week granted a banking license to Atom, a "branch-free, paper-free" institution which its customers must on their own mobile phones or tablets. The WEF study joins a flood of recent reports including one from Santander InnoVentures, the venture arm of Banco Santander, which argues digital technologies are eroding the bulwarks of the financial services industry, just as it did in travel and entertainment a decade or more ago. Recent market entrants are taking advantage of the plummeting cost of cloud-computing capacity to go head-to-head with banks in terms of raw transaction and data-crunching analytical power, what Santander's study has dubbed Fintech 2.0."Pre-digital business models and processes will berendered obsolete, and billions of dollars of value will shift to 'new model' suppliers," the Santander report predicts. Rising investments in fintech start-ups globally are fuelling the challenge to entrenched players, with $12.2 billion plowed into such ventures last year, more than threefold the total of 2013, according to data supplied by research firm CB Insights. BANKS WITH NO BRICKSThe generation born after 1980 have largely abandoned bank branches already. Younger people turn instead to virtual fintech brands such as eToro for social-media style investing, Moven in mobile banking, Prosper for loans and a growing number of crowd-funding platforms to finance projects. "Bankers always claim that they are close to their customers because they have all these retail branches," Berlin fintech entrepreneur Valentin Stalf said in an interview. "I think branches are holding banks back from reaching their customers." Stalf, 29, is co-founder and chief executive of Number26, a financial services marketplace for mobile users in the German-speaking world that has received backing from top Silicon Valley investor Peter Thiel, among other investors."I don't see banks at all as my competitors," Number26 CEO Stalf says. "They just can't move fast enough."Bankers who once thought financial regulation was a barrier to new entrants are seeing non-bank fintech rivals go after their most profitable markets, while avoiding regulated pieces of business, said Huw van Steenis, head of European bank research at Morgan Stanley, who contributed to the WEF report. While challenges to banking are more imminent, insurers may face bigger threats in the long-run as troves of online data usher in new types of personalized health, life and drivers insurance, upending the model of mutualized financial risk that has been at the heart of the industry, the WEF report predicts. In investment management, "robo-advisors" have begun to automate wealth advisory roles, calling into question face-to-face meetings and proprietary distribution channels. Meanwhile, robo-lenders threaten to eat banks' lunch.Most of new fintech firms selectively partner with technology providers who possess their own banking licenses, rather than waiting to procure banking licenses in country after country. They partner and outsource much of the underlying technology they use, slashing costs, while boosting flexibility.A complication of the exploding number of lending platforms is that it is becoming harder for banks or credit card firms to get a comprehensive view of creditworthiness.Both reports still see life ahead for major financial service brands, but not as universal, full-service banks or insurers. Instead they predict an era of growing specialization while relying online partnerships to deliver non-core services.Incumbents are learning new tricks from challengers, adapting existing services to make them convenient for customers and finding ways to collaborate with new fintech players, leading industry dividing lines to blur, both studies agree.A World Economic Forum graphic sums up the fintech scene at http://bit.ly/1C69L6a (Editing by David Holmes and William Hardy)

Tiger Management's Robertson says he is 'extremely positive' on Apple: CNBC

Julian Robertson, head of hedge fund Tiger Management, said he was "extremely positive" about Apple Inc and that Chief Executive Officer Tim Cook was the "perfect person" to lead the company."It, I think, now has the right leader for this time," Robertson told cable television network CNBC. He said it was possible that Cook was a better leader for Apple than previous CEO Steve Jobs, since Cook is "more of a humanist, and I think that's what a company of that size needs is a leader rather than an innovator." (Reporting by Sam Forgione; Editing by Lisa Von Ahn)

YouTube wins German court case over artists' fees

Google won a legal victory on Tuesday over German performing rights organization Gema, which had sought to make the company's video-sharing service YouTube pay each time users watched music videos by artists it represents.A Munich court rejected Gema's demand that YouTube pay 0.375 euro cents ($0.004) per view of certain videos. In its claim, Gema had picked out a sample of 1,000 videos which it said would cost YouTube around 1.6 million euros.YouTube counts more than 1 billion users worldwide and says 300 hours of video are uploaded to its site every minute.Since launching in 2005, YouTube has faced multiple lawsuits from artists and music labels who say it makes money at their expense, even as it has emerged as one of the most popular for fans to discover new music by their favorite artists. The Google-owned video service has introduced schemes that allow artists to earn money from advertising sold alongside their videos but many in the music business argue this does not go far enough. U.S. music licensing group Global Music Rights, representing some of the world's biggest artists from Pharrell Williams to Taylor Swift has demanded that YouTube remove up to 20,000 songs and threatened to sue the company for up to $1 billion.YouTube and Germany's Gema are fighting several legal battles, with a ruling in a Hamburg case expected on Wednesday. Both parties have said they want to settle, but talks in the past have failed.The Munich court ruling, which has not yet been published in full, may still be appealed by Gema. (Reporting by Joern Poltz; Writing by Georgina Prodhan, editing by David Evans)

China's Xiaomi plans to make smartphones in Brazil

Chinese smartphone maker Xiaomi has started making devices in Brazil, a senior executive said on Tuesday, in an effort to evade steep import tariffs that have pushed up prices and slowed smartphone adoption in the country. Xiaomi also announced that it would begin selling its Redmi 2 smartphone in Brazil for 499 reais ($160.45) beginning on July 7. The move brings Xiaomi's handheld devices to the first market outside Asia, where its aggressive prices and connection to customer feedback have won major market share. Xiaomi's phones are assembled in Brazil by contract manufacturer Foxconn, which has made Apple's iPhone in the country since 2011. (Reporting by Brad Haynes; Editing by Chizu Nomiyama)

Apple conspired to fix e-book prices: U.S. appeals court

A divided federal appeals court on Tuesday said Apple Inc (AAPL.O) orchestrated a conspiracy with five publishers to increase e-book prices.By a 2-1 vote, the 2nd U.S. Circuit Court of Appeals agreed with a lower court judge that the conspiracy violated federal antitrust law, and that the judge acted properly in imposing an injunction to prevent a recurrence. Writing for the majority, Circuit Judge Debra Ann Livingston said that by organizing the conspiracy, "Apple found an easy path to opening its iBookstore," while ensuring that marketwide prices rose to a level that Apple and the publishers wanted. (Reporting by Jonathan Stempel in New York)

Dubai says plans world's first 3D printed office building

Dubai said it would construct a small office building using a 3D printer for the first time, in a drive to develop technology that would cut costs and save time as the city grows.3D printing, which uses a printer to make three-dimensional objects from a digital design, is taking off in manufacturing industries around the world but has so far been used little in construction.Dubai's one-storey prototype building, with about 2,000 square feet (185 square meters) of floor space, will be printed layer-by-layer using a 20-foot tall printer, Mohamed Al Gergawi, the United Arab Emirates Minister of Cabinet Affairs, said on Tuesday. It would then be assembled on site within a few weeks. Interior furniture and structural components would also be built through 3D printing with reinforced concrete, gypsum reinforced with glass fiber, and plastic. The project is a tie-up between Dubai and Winsun, a Chinese company that has been pioneering the use of 3D printers to build houses. Gergawi cited studies estimating the technique could cut building time by 50-70 percent and labor costs by 50-80 percent. (Reporting by Andrew Torchia, editing by David Evans)

Nokia signs 3G deal with Bharti Airtel to cover big Indian states

Network equipment maker Nokia has signed up India's largest mobile operator Bharti Airtel to supply it with 3G wireless network gear covering some of the most populous regions in India, the Finnish company said on Tuesday.Nokia Networks said it will supply radio antennas, hardware, software and network management and planning services for five large areas of India, as well as network expansion in three sub-regions where the two companies had existing contracts, or eight out of India's 22 telecom sub-regions. Financial terms were not disclosed. However, A Nokia spokeswoman confirmed the expanded supply deals include equipment to run networks in three of India's four most populous states, which include major cities Mumbai and Kolkata.The Asia-Pacific region outside China represented one-third of Nokia's Network worldwide business sales of 2.67 billion euros ($3 billion) during the first quarter of 2015, making it the largest contributor to the company's results. India has been Nokia's best performing market in terms of sales in recent quarters, offsetting weakness in North America, Europe, Japan, some parts of Southeast Asia, as well as China, which while growing quickly, has undercut profit margins. In April, Nokia announced a 15.6 billion-euro takeover of Alcatel Lucent, a combination that will create the world's second-largest mobile network gear supplier behind Ericsson of Sweden. (Reporting by Aman Shah in Mumbai and Eric Auchard in Frankfurt, editing by Louise Heavens)

Cisco to buy OpenDNS for $635 million to boost security business

Cisco Systems Inc (CSCO.O) said on Tuesday it would buy OpenDNS, a privately held cloud-based security company, for $635 million in cash and equity awards.The OpenDNS team will be part of Cisco's security business group, boosting the business in the face of fast-growing, sophisticated cyber attacks. Cisco was part of a group that invested $35 million in OpenDNS in May last year. (bit.ly/1KqDMjV) (Reporting by Abhirup Roy in Bengaluru; Editing by Savio D'Souza)

Huawei says Honor brand on track to sell 40 million smartphones

Huawei Technologies Co Ltd's [HWT.UL] Honor brand has sold 20 million smartphones in the first half of 2015 and by should reach its goal of 40 million shipments by the year end, double the 2014 figure.Honor's sales amounted to $2.6 billion of revenue during the first half of the year, Honor President George Zhao said at the launch of the Honor 7 phone in Beijing.Huawei, the world's No. 4 handset maker, has invested heavily in the past two years to establish Honor as a stand-alone brand to compete against Beijing-based Xiaomi Inc to win over young, fashion-conscious customers.Zhao said that he expected 15 percent, or 6 million, of the unit's total sales this year to come from overseas, with the majority coming from China. Huawei, which also sells smartphones marketed to business users under its own brand, is expected to announce in the coming weeks that its China sales are on track to double this year. The company is targeting total smartphone sales of 100 million in 2015.The Shenzhen-based company's optimism contrasts with the industry view that smartphone sales in China will contract as the market reaches saturation and firms seek profits elsewhere. For its part, Xiaomi is set to hold a press event in Sao Paolo later on Tuesday to launch its products in Brazil, the latest market the company has in its sights after recently entering India. Xiaomi's chief executive Lei Jun has stated a sales target of between 80 million to 100 million phones for 2015. (Reporting by Gerry Shih, editing by Louise Heavens)

Amazon launches one-hour delivery service in London

Amazon.com Inc launched its one-hour order delivery service, Prime Now, for some areas of London on Tuesday, about six months after introducing the service in the United States.Amazon Prime members can have orders worth 20 pounds ($31.43) or more delivered in one hour for a fee of 6.99 pounds, the company said on its UK website on Tuesday. Two-hour to same-day window deliveries will be free, Amazon said. The service will be available for orders placed between 8 a.m. and midnight, Amazon said. Amazon Prime is a paid service that offers members free delivery and access to a huge catalog of films, music, books and video. Amazon launched Prime Now in parts of New York in December and expanded the service to other cities including Baltimore and Miami. (Reporting by Abhirup Roy in Bengaluru; Editing by Kirti Pandey)

Two Uber France executives to go on trial September 30

Two executives from Uber's French branch will go on trial on September 30, a prosecutor said on Tuesday, after the two were held for questioning as the government intensified its clampdown on the U.S.-based taxi and ride-sharing service.Thibaud Simphal, manager of Uber France, and Pierre-Dimitri Gore-Coty, general manager for western Europe, were detained on Monday as part of an investigation that earlier led to Uber's offices being raided by police in March.The probe focuses on one of the company's several local transport options known as UberPOP, which allows passengers to book rides with non-professional drivers via their mobile phones, infuriating taxi operators. Uber has provoked protests by taxi drivers from London to New Delhi as it upends traditional business models that require professional drivers to pay often steep fees for licenses to operate cabs. In France, the backlash intensified last week when taxi drivers blockaded major transport hubs to protest against what they call unfair competition. (Reporting by Chine Labbe; Writing by Ingrid Melander; Editing by Leigh Thomas)

Alibaba Group in talks to buy stake in India’s Paytm: sources

Chinese e-commerce giant Alibaba Group Holding Ltd is in advanced talks to invest in Indian online payment platform and e-commerce firm Paytm, two sources with knowledge of the matter said on Tuesday.Alibaba's financial arm Ant Financial, which runs the Alipay online payment platform, is already an investor in Paytm's parent, having agreed in February to buy a 25 percent stake.One source with direct knowledge of the matter said the new deal would see Alibaba directly invest around $600 million for a share in Paytm that could take the Chinese group's total holding to around 40 percent of the Indian payments firm. The fresh investment would value Paytm at around $4 billion.The sources declined to be named as negotiations are not public. A spokesperson for Alibaba declined to comment on the development. A spokeswoman for Paytm also declined to comment, but said the group regularly engaged with investors on "various funding opportunities". (Reporting by Sankalp Phartiyal, Nivedita Bhattacharjee and Paul Carsten; Editing by Clara Ferreira Marques)

Orange, Partner Communications set terms to end brand deal

French telecoms group Orange and Israeli mobile phone operator Partner Communications said on Tuesday they had agreed terms to end their licensing deal following a public row in Israel, but Orange said it was still committed to Israel.Israel protested to France after Orange's Chief Executive, Stephane Richard, said earlier this month he would terminate the licensing arrangement with Partner "tomorrow morning" if the contracts allowed.Specifically, the controversy surrounds economic activities in Israeli settlements of the occupied Palestinian territories which France and the European Union consider illegal. Orange is 25 percent owned by the French government.Richard later apologized to Israeli Prime Minister Benjamin Netanyahu and said his comments, made during a visit to Egypt, had been misinterpreted to suggest that he supported an outright boycott of Israel for political reasons.Orange later explained the comments as reflecting a broader desire and strategy of not licensing its brand where it was not directly in control of the business. Partner pays a fee to use Orange's brand in Israel. Under the new deal, if Partner does not exercise its right to terminate their brand agreement within 12 months, either Partner or Orange could terminate it during the following 12 months, Orange said in a statement. Should the branding agreement be terminated, Orange would rebrand its research and development operations in Israel under its own name."For Orange, Israel is a strategically important country and we have a long-term commitment to it, including our innovation activities through the Orange affiliates in Israel," Orange deputy CEO, Pierre Louette, said in the statement. It said it had agreed to pay Partner 40 million euros ($44.7 million) while a market study is carried out on Partner's position and an additional 50 million could be paid out should the agreement be terminated within 24 months. (Reporting by Leigh Thomas; Additional reporting by Tova Cohen in Tel Aviv; Editing by Susan Fenton)

Baidu to invest $3.2 billion in online-to-offline services within three years

China's search leader Baidu Inc said on Tuesday it would invest 20 billion yuan ($3.22 billion) over the next three years on online-to-offline services, including group-buying service Nuomi. (Reporting by Paul Carsten; Editing by Miral Fahmy)

Samsung's Cheil, pitching $8 billion merger, pledges higher returns

Locked in a battle with an activist U.S. hedge fund, the Samsung Group's [SAGR.UL] de facto holding company sought to win support for a proposed $8 billion merger with a sister firm by pledging to bolster post-deal shareholder returns.Cheil Industries said on Tuesday that the company formed on completion of its all-stock takeover of Samsung C&T Corp would gradually increase its dividend payout ratio to 30 percent by 2020 from the equivalent of 21 percent in 2014 and also consider future share buybacks.On a forecast 2020 pre-tax profit of 4 trillion won, the dividends would amount to 4,800 won ($4.29) per share, Cheil said in a statement. It also promised a governance committee within the board of directors to guard investor interests."The steps show that the companies are mindful of shareholder value, but we need to take a closer look at the details and whether the growth strategy set forth is reasonable," said Baik Jae-yer, fund manager at Korea Investment Trust Management, a Samsung C&T investor.The investment firm has yet to decide how it will vote at a July 17 shareholders' meeting, he said.A deal would smoothen a leadership transfer for Samsung's founding Lee family by helping to consolidate stakes in key companies including Samsung Electronics Co Ltd into a vehicle firmly controlled by the Lee heirs. ELLIOTT'S CHALLENGEThe Samsung Group is trying to fend off a challenge from Samsung C&T shareholder Elliott, a hedge fund that has filed two injunction requests with a South Korean court to block the merger, which it says undervalues C&T. The court may issue rulings on both requests on Wednesday. In a rare case of shareholder activism in a country that has long been wary of foreign investors, Elliott has repeatedly criticised the deal and called on investors to vote against Cheil's offer.Elliott declined on Tuesday to comment on Cheil's proposed steps.Investors in Samsung C&T including overseas fund firms Aberdeen Asset Management and APG Asset Management, and South Korea's Ilsung Pharmaceutical Co, have also spoken out against the deal, while some domestic investors such as Shinyoung Asset Management have voiced support. Cheil co-Chief Executive Yoon Joo-hwa told analysts during a briefing on Tuesday that if the current offer fails, the firm will not try again to merge with Samsung C&T.C&T, separately, sent a letter to shareholders on Tuesday urging them to accept the deal: "We caution our shareholders to be wary of Elliott’s questionable motives," it said.($1 = 1,119.1000 won) (Reporting by Joyce Lee and Se Young Lee; Editing by Tony Munroe and Muralikumar Anantharaman)

Monday, June 29, 2015

Sony to raise up to $3.6 billion to boost sensor production

Sony Corp said it plans to raise up to 440 billion yen ($3.6 billion) by issuing new shares and convertible bonds to invest in its fast-growing image sensors business.Sony said it expects to raise 321 billion yen from a public offering and 119 billion from issuing convertible bonds. The company said in February that it would spend 105 billion yen to boost production capacity for sensors, increasing its focus on a business that is becoming one of its strongest as its TV and mobile operations struggle. Sony shares were down over 7 percent. (Reporting by Chris Gallagher and Ritsuko Ando)

Sprint rolls out all-included rate plan

Sprint Corp said on Tuesday it will offer an $80 a month cellular phone plan, including both service and smartphone device fees, hoping to draw users who dislike complex price plans and hidden costs.The "All-in" plan will offer unlimited talk, text and data at $60, plus $20 to lease phones such as the iPhone 6 and Samsung's Galaxy S6, chief marketing officer Kevin Crull said in an interview.Sprint, the No. 3 U.S. cellular operator, is in the middle of a turnaround plan aimed at narrowing the gap with its larger rivals. It has focused on offers such as cutting subscribers' bills in half to get them to switch from other carriers, doubling its data capacity and hand-delivery of new phones. Analysts have raised concerns over Sprint's heavy spending to acquire customers and whether it can balance costs with investments in network upgrades.In recent years, the industry has moved away from traditional two-year contracts of subsidized phones to offering monthly leasing plans alongside service fees. The shift sparked a price war among Sprint and its rivals, T-Mobile US Inc, AT&T Inc and Verizon Communications and the proliferation of varied promotions and rate plans. "The natural evolution of the industry is to advertise both combined: cost of the device and the rate plan, put them together and tell the customer what's the rate all in," Crull said. The plan, which includes a one-time $36 activation fee, will roll out on Tuesday with a video campaign featuring soccer star David Beckham, Sprint said. (Reporting by Malathi Nayak; Editing by Dan Grebler)

Qualcomm has no plans to spin off chip business at present: chairman

U.S. chipmaker Qualcomm Inc has no plans to spin off its chips business at present, Executive Chairman Paul Jacobs said on Tuesday, despite recent investor pressure to do so amid intensifying industry competition. Hedge fund Jana Partners said in April Qualcomm should spin off the chip business from its patent-licensing business to improve shareholder value, calling the chip business "essentially worthless"."We've had that discussion for a long time, many years the board has looked at it but we still think the synergies of having the businesses together outweighs the dissynergies," Jacobs told on the sidelines of an American Chamber of Commerce event in Seoul. Jacobs said, however, that the company is always evaluating its options and that the situation could change in the future. (Reporting by Sohee Kim; Writing by Se Young Lee; Editing by Muralikumar Anantharaman)

EU in preliminary deal to scrap mobile roaming fees by mid-2017

The European Union reached a preliminary deal on Tuesday to scrap mobile roaming charges across the 28-country bloc by June 2017 as part of an overhaul of the continent's telecoms market to boost growth and innovation."Under the agreement, roaming surcharges in the European Union will be abolished as of 15 June 2017," Latvia, which holds the rotating EU presidency, said in a statement after 12 hours of talks with EU lawmakers. On the controversial issue of net neutrality, the EU plans to order telecoms operators to treat all Internet traffic equally and that blocking would only be allowed to counter cyber attacks or during peak periods. Companies such as Deutsche Telekom, Orange and Telecom Italia had lobbied to have more leeway to tap into a potentially lucrative source of revenue but Internet activists say this could create a two-speed Internet benefiting companies with deep pockets. (Reporting by Foo Yun Chee and Julia Fioretti)

Exclusive: Amazon looks to offer loans to sellers in China, seven other countries

Amazon.com Inc (AMZN.O) will start a business loan program for small sellers in the United Kingdom on Tuesday and is looking to launch it this year in seven more countries including China.Until now, the e-retailer has offered the service only in the United States and Japan. Amazon Lending, founded in 2012, plans to offer short-term working capital loans in other countries where it operates a third-party, seller-run marketplace business, the head of Amazon Marketplace, Peter Faricy, told . The countries are Canada, France, Germany, India, Italy, Spain and China, where credit is becoming a key factor in competing for new vendors and grabbing market share. The service is on an invite-only basis and is not open to all sellers on Amazon's platform. Other large retailers including eBay Inc's (EBAY.O) PayPal and Alibaba Group (BABA.K) which run third-party marketplaces, are also turning to credit to boost their vendor base.Some lending industry officials who help lenders assess credit risk say these retailers are taking on risky loans because they do not know the credit markets in which the sellers are operating. Small businesses have high failure rates, especially in China and India, added William Black, a former U.S. banking regulator and professor at the University of Missouri.Amazon said it can safely offer loans based on internal data and because it takes loan payments out of the sales proceeds it pays sellers. Amazon offers three- to six-month loans of $1,000 to $600,000 to help merchants buy inventory. It makes money on interest and takes a cut of all sales on its marketplace, which now account for about 40 percent of total Amazon site sales. Amazon said it has offered hundreds of millions of dollars in loans since 2012, with more than half of its sellers opting for a repeat loan. The company declined to provide specific figures and also did not say how much it plans to lend this year.Amazon's Faricy said the company has become better at understanding the inflection points in a small or medium business where capital can make a difference. "We know a lot about our sellers' business and invite only those who we think are in the best position to take capital and grow," he said.In China, where Alibaba lends to small businesses, offering such loans is more of a business requirement, analysts said. "Amazon has very little share in China and they haven't been able to break out of that, so this is a very important necessary step for them to be able to grow," said Gil Luria, analyst with Wedbush Securities in Los Angeles.In other countries including India, where there is a scramble to expand the online shopping market, small business loans could offer a distinct competitive advantage, Luria said.MITIGATING RISKOnline lending accounts form about 3 percent of the roughly $1 trillion of outstanding personal and small business loans in the United States. The default rate for small businesses with credit under a $1 million stood at 1 percent in 2014 but is seen rising to 1.6 percent in 2015, as new lenders with varying ability to assess risk increase lending, according to small business credit ratings provider PayNet.Retailers like Amazon do not have data from sellers about some markets in which they operate, and relying on internal seller company data is not enough, said William Phelan, president of PayNet.Sellers interviewed by and writing on Amazon forums cited interest rates on Amazon loans ranging from 6 percent to 14 percent, in line with loans from banks and business credit cards.Stephan Aarstol, chief executive of Tower Paddle Boards, an Amazon seller, said he has taken four loans from the company starting in March 2014 because of the speed and simplicity of the process. It took him five days to get his first loan."The problem for a small business owner is not the interest rate, it's the availability of credit ... I can't grow fast enough," he said. (Editing by Matthew Lewis and Cynthia Osterman)

AT&T, DirecTv extend 'termination date' for second time

AT&T Inc (T.N), the No. 2 U.S. telecom company, said it has extended the "termination date" of the merger agreement with satellite TV provider DirecTV (DTV.O) for "a short period of time", the second time in two months.AT&T said in a regulatory filing on Monday that the extension is aimed at obtaining final regulatory approval for the merger. (1.usa.gov/1IHzVJa) AT&T in May last year offered to buy DirecTV to create the largest U.S. pay TV company. The deal highlights AT&T's pressing need for fresh avenues of growth beyond the maturing U.S. cellular business, which has become increasingly competitive. (Reporting By Lehar Maan in Bengaluru)

U.S. Office of Personnel Management to suspend IT system after hack

The U.S. Office of Personnel Management (OPM) said on Monday it would temporarily suspend a program it uses to complete background investigations, following a data breach that compromised the personal information of millions of Americans.The program, called Electronic Questionnaires for Investigations Processing (e-QIP), was not involved in either of two attacks by suspected Chinese hackers on personnel data and applications for security clearances, OPM said. The breaches were announced earlier this month.After a security review ordered by Director Katherine Archuleta found a vulnerability in the system, OPM said it would take e-QIP offline for 4-6 weeks until security can be enhanced.In a statement, the agency said there was no evidence the vulnerability had been exploited.But the move amounts to an implicit admission the electronic submission system is vulnerable, and some agencies are considering switching to a more old-school process of submitting data on paper, according to sources familiar with the issue who are unauthorized to speak publicly about it. The breach has fueled doubts about the centralized electronic system set up to process security clearances after the Sept. 11, 2001, hijacking attacks, and could prompt some intelligence agencies and others to switch back to their own applications, the sources said.The electronic system is designed to collect massive amounts of personal data, ranging from financial histories to information about relatives, from those undergoing federal background checks. Employees sign in using their Social Security numbers.Brian Kaveney, who heads the security clearance practice at Armstrong Teasdale, said the move would have serious consequences for companies seeking security clearances for their employees, compounding a logjam caused by mandatory budget cuts in 2013. "This security measure will doubtlessly increase the processing time of clearance applications and potentially create a backlog, slowing business efforts to deliver classified goods and services to the federal government," Kaveney said in an interview."Several federal agencies have worked incredibly hard to reduce the backlog caused by 2013's budget sequestration and other issues, and now we may be facing a similar slowdown caused by security problems."The announcement follows widespread doubts among lawmakers about Archuleta's ability to lead OPM following the announcement earlier this month of the sweeping breaches. Archuleta has so far refused to answer where the attacks originated or how many people were affected, leading many in Congress to call for her resignation.The massive data breach is now believed to have affected well over 10 million separate users, the sources said. The Federal Bureau of Investigation has said up to 18 million could have been affected. (Reporting by Megan Cassella and Andrea Shalal; Editing by Richard Chang)

Falcon rocket explosion leaves SpaceX launch schedule in tatters

SpaceX on Monday was searching for what destroyed its Falcon 9 rocket after liftoff over the weekend, leaving customers still loyal but unsure when their satellites might fly.The privately-held company, owned and operated by technology entrepreneur Elon Musk, has flown 18 successful missions with the Falcon 9 before Sunday’s failure.Preliminary analysis pointed to a problem with the rocket’s second-stage motor liquid oxygen tank, SpaceX said."There was an overpressure event,” Musk wrote on Twitter after the accident. “Cause still unknown after several thousand engineering-hours review,” he added on Monday. Falcon 9 debuted in 2010 after SpaceX experimented with a smaller predecessor booster. “There’s a huge, huge question about the cause of this failure, not from a point of view of finger-pointing, but for understanding if we should expect new vehicles to operate reliably from the beginning,” said Carissa Christensen, managing partner of The Tauri Group, a Virginia-based space and technology consultancy. In the past, new rockets typically failed several times in their early missions, as engineers perfected designs and tweaked operations. With better computer modeling and computational tools, as well as more spaceflight experience, that paradigm may no longer be true.CUSTOMER LOYALTY SpaceX has nearly 50 launches, worth more than $7 billion, on its schedule.“I don’t think the accident is going to cause a mass move away from SpaceX,” said Christensen.“It will be one more fact companies fold into their decisions and their negotiations, but it’s not going to be the only fact, and it’s certainly not going to be the most important fact,” she said. Current customers include NASA, which uses Falcon 9 and SpaceX Dragon cargo ships to fly supplies to the International Space Station, and about 20 commercial and other satellite operators, many of which have contracts for multiple flights.Sunday's accident destroyed the Dragon cargo ship bound for the station, a $100 billion research laboratory that flies about 260 miles (418 km) above Earth. "We were the first (commercial customer) to use SpaceX in December 2013 and have never regretted taking that important step," said Markus Payer, vice president of communications with Luxembourg-based SES, which had booked an August Falcon ride for an Asian communications satellite.SES and other satellite operators said they were waiting for more information about why the Falcon failed, what corrective action might be needed and how long it would take before launches resume.“It is unfortunate, but … we don't have any concerns about our commitment to fly on Falcon," Iridium Communications Inc (IRDM.O), which has contracts for seven SpaceX launches, wrote in an email to .“It isn’t critical that they make the exact dates – there is some flexibility in our overall launch plans,” added Iridium spokeswoman Diane Hockenberry. RACE IN SPACEWith prices that are 25 percent to 30 percent less expensive than competitors in Europe and Russia, privately-owned SpaceX has brought the United States back into the commercial launch marketplace. Rival United Launch Alliance (ULA), a joint-venture of Lockheed Martin and Boeing intends to add commercial customers to a schedule now almost completely devoted to U.S. military missions.“Very sorry to hear of the (Falcon mission) loss,” ULA Chief Executive Tory Bruno wrote on Twitter. “Heart-breaking for the men and women who worked on the rocket and its missions. Hang in there SpaceX.”The accident was the third supply ship to fail in eight months. NASA’s other supply line, operated by Orbital ATK, had a launch accident in October.Orbital’s Antares rocket is being refurbished with new engines and expected to return to flight next year. Meanwhile, Orbital bought an Atlas rocket ride from ULA to launch its Cygnus cargo ship to the station before the end of the year.Russia lost a Progress cargo ship in April after it failed to separate properly from it Soyuz rocket. A reflight is slated for Friday. The only other supply ship flying to the station is Japan’s HTV. (Reporting by Irene Klotz; Additional reporting by Tim Hepher in London; Editing by Marguerita Choy)

Microsoft to drop display ad business, cut 1200 jobs - Bloomberg

Microsoft Corp (MSFT.O) will close its web display advertising business, handing operations over to AOL Inc and AppNexus Inc and cutting about 1,200 jobs, Bloomberg reported.Some of the affected employees will be moved to AOL and AppNexus, while some more will be offered positions at Microsoft, Bloomberg said, citing a person with knowledge of the matter. (bloom.bg/1JkPHg3) The remaining employees will be laid off. The financial terms of the deal weren't immediately known, Bloomberg reported. (Reporting By Lehar Maan in Bengaluru; Editing by Joyjeet Das)

Exclusive: U.S. should spurn Russia rocket engines despite SpaceX failure - McCain

The failure of a SpaceX rocket over Florida on Sunday should not lead U.S. officials to conclude there is need for a Russian rocket engine to help get military equipment into space, Senate Armed Services Committee Chairman John McCain said on Monday. "This mishap in no way diminishes the urgency of ridding ourselves of the Russian RD-180 rocket engine," McCain said in a statement. (Reporting By Richard Cowan; Editing by Doina Chiacu)

Two rival self-driving cars have close call in California

(In June 25 story, changes attribution in last sentence to the companies, instead of the California Department of Motor Vehicles and the companies)By Paul Lienert - Two self-driving prototype cars, one operated by Google Inc and the other by Delphi Automotive Plc, had a close call on a Silicon Valley street earlier this week, a Delphi executive told on Thursday.It was believed to be the first such incident involving two vehicles specially equipped for automated driving.The incident occurred Tuesday on San Antonio Road in Palo Alto, said John Absmeier, director of Delphi's Silicon Valley lab and global business director for the company's automated driving program, who was a passenger in one of the cars.No collision took place. Google declined to comment.Absmeier was a passenger in a prototype Audi Q5 crossover vehicle equipped with lasers, radar, cameras and special computer software designed to enable the vehicle to drive itself, with a person at the wheel as a backup.As the Delphi vehicle prepared to change lanes, a Google self-driving prototype - a Lexus RX400h crossover fitted with similar hardware and software - cut off the Audi, forcing it to abort the lane change, Absmeier said. The Delphi car "took appropriate action," according to Absmeier.Delphi's Silicon Valley lab is based in Mountain View, not far from Google headquarters. While Delphi is running two Audi prototypes in California, Google has been testing more than 20 Lexus prototypes. On Thursday, Google started testing self-driving vehicle prototypes of its own design on local streets. The latest prototypes use the same software as the Lexus vehicles.Both companies previously have reported minor collisions of self-driving cars with vehicles piloted by people. In most of those cases, the self-driving car was stopped, typically at an intersection, and was rear-ended by another vehicle.In all cases, the self-driving prototype was not at fault, according to the California Department of Motor Vehicles and the companies. (Editing by Stephen R. Trousdale and Leslie Adler)

Google given more time to reply to EU antitrust charges

Google (GOOGL.O) has been given six more weeks to reply to EU antitrust charges of abusing its market power in a dozen EU countries, the world's most popular Internet search engine said on Monday."We have asked the European Commission for additional time to review the documents they've provided us. The Commission has extended our response deadline to Aug. 17," Google spokesman Al Verney said. The company had earlier been told to respond by July 7, sources told . Neither the company nor the EU competition authority has provided the first deadline. (Reporting by Foo Yun Chee; editing by Adrian Croft)

Google given more time to reply to EU antitrust charges

Google has been given six more weeks to reply to EU antitrust charges of abusing its market power in a dozen EU countries, the world's most popular Internet search engine said on Monday."We have asked the European Commission for additional time to review the documents they've provided us. The Commission has extended our response deadline to Aug. 17," Google spokesman Al Verney said. The company had earlier been told to respond by July 7, sources told . Neither the company nor the EU competition authority has provided the first deadline. (Reporting by Foo Yun Chee; editing by Adrian Croft)

U.S. top court declines to hear Google appeal in Oracle software fight

The U.S. Supreme Court on Monday declined to hear Google Inc's(GOOGL.O) appeal in a major software copyright case, leaving intact a ruling that would allow Oracle Corp(ORCL.N) to charge licensing fees for the use of some of its Java programing language.The high court left in place a May 2014 ruling by the U.S. Court of Appeals for the Federal Circuit in favor of Oracle. Google had argued it should be free to use Java without paying a licensing fee. The case involved how much copyright protection should extend to the Java programing language.Google, which used Java to design its Android smartphone operating system, said in court papers that an Oracle victory would obstruct "an enormous amount of innovation" because software developers would not be able to freely build on each others' work. Oracle said effective copyright protection is the key to software innovation. The Obama administration, asked to weigh in on the issue earlier this year, asked the court not to take the case.The case is Google v. Oracle, U.S. Supreme Court, No. 14-410.

Virtual reality pedals and dances its way into fitness classes

Virtual reality is making inroads into group fitness classes and personal training sessions and promises to get more immersive as the technology advances, according to fitness experts.It can transport an indoor cyclist in snowy Minnesota to Miami Beach or drop a novice into the middle of a three-dimensional exercise class that was taped days ago and miles away. Anytime Fitness, a worldwide franchise, uses automated kiosks to screen immersive classes from indoor cycling to yoga.“We have doubled down on our concentration of virtual fitness,” said Shannon Fable, corporate director of programing. “It’s an electronic way to deliver reliable, affordable group fitness for free.”Fable, who is based in Boulder, Colorado, said virtual fitness is also popular in personal training and kiosks provide classes during off-peak afternoon hours. “With virtual group fitness, if you’re nervous or scared, you can do it over and over,” she explained.Virtual exercise in the form of instructors and classes projected onto a screen has already penetrated some 3,000 clubs worldwide, according to IHRSA (International Health, Racquet & Sportsclub Association). Zumba, the dance party workout, has been demonstrating a 360-degree virtual reality class, delivered via a clunky headset, to industry insiders at professional trade shows. Alberto Perlman, the CEO of Miami-based Zumba Fitness, expects to have a consumer-friendly version in 2016. “We envision as the headsets get lighter and the technology gets better, you’ll be able to be in a Zumba class at home,” he said. “The average person will go into a store, buy a piece of elastic casing, put it on their phone, and download the class.”He also expects the cost of the headset, now about $200 dollars, to drop significantly. The virtual reality technology is also expected to attract more men to Zumba. Endri Tolka, co-founder of YouVisit, the New York-based virtual reality content company that partnered with Zumba for the class, agrees that the virtual reality experience will only get better.“Right now your brain has a tough time making the connection with the real world but starting next year it will be a more normal experience,” he said.Tolka believes virtual reality will revolutionize fitness.“Down the line you’ll be getting on a cycling machine, putting the headsets on, and loading up the Tour de France or a beach in California,” he said. “And you will feel as if you’re there in your brain.”

Out of the shadows, China hackers turn cyber gatekeepers

China, long accused by the United States of rampant cyber aggression, may be synonymous with hacking exploits these days, but that doesn't mean every Chinese hacker is out to pilfer and destroy.As Chinese companies grapple with a sharp increase in the number of cyber attacks, many hackers are finding it increasingly lucrative to go above board and join the country's nascent cyber security industry. Zhang Tianqi, a 23-year old Beijinger, cut his chops in high school trying to infiltrate foreign websites, skirting domestic law by probing for vulnerabilities on overseas gaming networks. Now, after a stint working at internet bluechip Alibaba Group Holding Ltd, he is the chief technology officer of a Shanghai-based cyber security firm which owns Vulbox.com, a site offering rewards for vulnerability discoveries, and internet security media site FreeBuf.com. "I'd been messing around in the field in my early years, but luckily it just so happens now that there's this trend of China taking information security very seriously," Zhang said on June 18, from his office in a high-tech development in eastern Shanghai.China's President Xi Jinping has made cyber security a national priority as the country starts to feel the impact of rapid economic growth occurring without a corresponding development in data protection. In May, China's National Computer Network Emergency Response Technical Team, a non-profit agency, said it had recorded 9,068 instances of data leaks in 2014, three times as many as in 2013, reflecting the "grim challenges" of Chinese cyber security, according to the official Xinhua news agency.To try and tackle this, dozens of cyber security companies are now cropping up across China according to industry observers, populated by young techies with bona fide security skills and work experience at firms like Alibaba, Tencent Holdings Ltd and Baidu Inc.China is hoping that eventually domestic cyber security groups will provide most of its companies with defenses against hacking, rather than them relying on foreign firms like Symantec, Kaspersky and EMC Corp's RSA. The gradual professionalism of China's bedroom hackers traces the country's rise as an economic and technological force, and its sometimes conflicted position in the escalating global data security arms race. The U.S. government has attributed sophisticated attacks - including the large-scale data theft this month from the Office of Personnel Management (OPM) - to increasingly advanced state-affiliated teams from China. But former hackers say the majority of their peers are joining a burgeoning industry to help China firms fend off the numerous attacks they face themselves. China has denied any connection with the OPM attack and little is known about the identities of those involved in it.The Cyberspace Administration of China told in a June 19 fax that it opposes "any form of network attack" and does "not allow any groups or individuals to engage in network-attacking activities" within its borders. CRACKDOWNThe cyber security industry's growth was partly spurred by a government crackdown on China's hacking community five years ago - around the same time Beijing passed a series of laws banning hacking and spamming tools and requiring telecom operators to help suppress attacks.Government sweeps largely silenced once-raucous online forums like kanxue.com, where hackers traded tips and boasted about their conquests.Many chose to shift from "black hat" activities to "white hat" ones, using their skills to find network vulnerabilities so that they can be fixed."Many people feel that now white hats have some space to do things, or make money, while hackers can't do bad things anymore," said one hacker who asked not to be identified because of his former work with the government. Aside from companies like Alibaba, Tencent and Baidu beefing up their defenses, China's government has also been working to ramp up the data security of the country as a whole.Agencies including the Cyberspace Administration of China have led educational efforts around promoting data security. Still, many "white hats" say Chinese companies continue not to take the matter of information security seriously enough, neglecting to hire enough people in-house to protect themselves. "I hope we can give people a wake-up call," said the former government hacker. Even with the current progress, it's likely to be a long and laborious effort, with China saying it is often the target of sophisticated attacks from overseas.Last month, Chinese security company Qihoo 360 Technology Co Ltd issued a report saying it had discovered a series of cyber-intrusions against important Chinese targets that lasted for years. These include a government maritime agency, research institutions and shipping companies.Zhang says that while the finger is often pointed at China for hacking attacks, the country is still playing catch up with the United States on both the cyber security, and cyber espionage fronts. "When China's measured up against the American giants, the level of their hacks, their data security, the scale and the harm they can do is all much greater." (Additional reporting by Ben Blanchard, and Jeremy Wagstaff in Singapore; Editing by Rachel Armstrong)

Google, with U.S. government, to add rail crossing data to map system

Google and the U.S. Federal Railroad Administration have agreed to use the agency's data to add audio and visual alerts to notify drivers about upcoming railroad crossings on Google's navigation system, the FRA announced on Monday.The agency also asked four other companies - Apple, Garmin, Tom Tom and AOL's Mapquest - to join similar map partnerships, it said. AOL is owned by Verizon. (Writing by Bill Trott; Editing by Susan Heavey)

Thailand launches Muslim-friendly tourist app

Thailand on Monday launched a smartphone app to attract Muslim visitors, something that could help further boost an industry which has been steadily recovering since a 2014 coup.Thailand is predominantly Buddhist but parts of the south are majority Muslim. Known for its laissez-faire attitude toward travelers, powder-white beaches and as an aviation hub, Thailand draws millions of tourists each year.Now its tourism body hopes the new app will help further boost Thailand's tourism sector, which makes up about 10 percent of its economy.The industry took a beating last year as some foreign governments issued warnings against non-essential travel to Thailand due to political unrest and a May 22 coup, but it has been steadily recovering.Efforts to welcome Muslim travelers to Thailand come amid rising anti-Muslim sentiment in some Western countries and recent Islamist militant attacks. The new app will be available on Google Inc's Android and Apple Inc's iOS systems, the Tourism Authority of Thailand said in a statement.With search and navigation features, it will help visitors find hotels and shopping centers with prayer rooms and halal, or permissible under Islamic law, restaurants, said Juthaporn Rerngronasa, acting governor of the Tourism Authority of Thailand.Among non-Organization of Islamic Cooperation (OIC) countries, Thailand was ranked the second most popular place for Muslim travelers to visit in the world after Singapore by the Global Muslim Travel Index in 2015. "We believe this is because we have the required range of products and services for Muslim travelers," said Juthaporn.The app is available in English and Thai but will be expanded to include Arabic and Bahasa Indonesia. Thailand expects a record 29.5 million tourists this year, up 19 percent from 2014, its tourism council said last week. (Reporting by Amy Sawitta Lefevre; Editing by Nick Macfie)

Samsung Electronics plans more Tizen smartphones this year: source

Leading smartphone maker Samsung Electronics Co Ltd plans to launch more handsets running on its own Tizen operating system later this year, a person with knowledge of the matter told on Monday.Samsung will launch several Tizen smartphones at varying prices, the person said without disclosing other specifications.The person declined to be identified due to the sensitivity of the matter.A spokeswoman for the South Korean firm declined to comment. Samsung aims to build its own ecosystem through Tizen, which powers its smartwatches and premium television sets. But the firm needs more handsets running on the system to expand its user base and attract third-party developers, analysts say. The company launched its first Tizen smartphone, the Z1, in India in January and has since been selling the device in Sri Lanka and Bangladesh. It has sold 1 million Z1s so far in India, the world's third-biggest smartphone market.The Z1 was the best-selling smartphone in Bangladesh in January-March, researcher Counterpoint said in a May report. (Reporting by Se Young Lee; Editing by Christopher Cushing)

Sunday, June 28, 2015

Exclusive: Amazon to offer loans to sellers in China, 7 other countries

Amazon.com Inc will launch its business loan program for small sellers later this year in eight more countries including China, where credit is becoming a key factor in competing for new vendors and grabbing market share. Until now, the e-retailer has offered the service only in the United States and Japan. Amazon Lending, founded in 2012, now plans to offer short-term working capital loans in other countries where it operates a third-party, seller-run marketplace business, the head of Amazon Marketplace, Peter Faricy, told . The countries are Canada, China, France, Germany, India, Italy, Spain and the United Kingdom. The service is on an invite-only basis and is not open to all sellers on Amazon's platform. Other large retailers including eBay Inc's PayPal and Alibaba Group Holdings, which run third-party marketplaces, are also turning to credit to boost their vendor base.Some lending industry officials who help lenders assess credit risk say these retailers are taking on risky loans because they don't know the shape of the credit market in which the sellers are operating. Small businesses have high failure rates, especially in China and India, added William Black, a former U.S. banking regulator and professor of Economics and Law at the University of Missouri.Amazon said it can safely offer loans based on internal data and because it takes loan payments out of the sales proceeds it pays sellers. PayPal spokesman Josh Criscoe said eBay merchants who use PayPal are eligible for the working capital loans and credit is offered to only those customers that have a strong PayPal sales history. PayPal has provided more than $500 million in capital since September 2013, with an average loan disbursement of $2 million per day.A spokeswoman for Alibaba's financial services arm Ant Financial, which offers these loans, said credit is offered to Taobao, Tmall merchants and other small business owners who meet certain conditions. The company also offers such loans to customers in some countries like the United States and Britain.Since 2011, Ant Financial's Ant Micro Loan program has issued 400 billion yuan ($64.42 billion) worth of loans, and the non-performing loan ratio is 1.5 percent, the spokeswoman added. Amazon offers three- to six-month loans of $1,000 to $600,000 to help merchants buy inventory. It makes money on interest and takes a cut of all sales on its marketplace, which now account for about 40 percent of total Amazon site sales.Amazon said it has offered hundreds of millions of dollars in loans since 2012, with more than half of its sellers opting for a repeat loan. The company declined to provide specific figures and also did not say how much it plans to lend this year.Amazon's Faricy said the company has become better at understanding the inflection points in a small or medium business where capital can make a difference. "We know a lot about our sellers' business and invite only those who we think are in the best position to take capital and grow," he said.Faricy said Amazon uses internal algorithms to choose sellers based on the frequency with which they run out of stock, the popularity of their products and their inventory cycles.In China, where Alibaba lends to small businesses, offering such loans is more of a business requirement, analysts said. "Amazon has very little share in China and they haven't been able to break out of that, so this is a very important necessary step for them to be able to grow," said Gil Luria, analyst with Wedbush Securities in Los Angeles.In other countries including India, where there is a scramble to expand the online shopping market, small business loans could offer a distinct competitive advantage, Luria said. MITIGATING RISK Online lending accounts for about 3 percent of the roughly $1 trillion of outstanding personal and small business loans in the United States. The default rate for small businesses with credit under a $1 million stood at 1 percent in 2014 but is seen rising to 1.6 percent in 2015, as new lenders with varying ability to assess risk increase lending, according to small business credit ratings provider PayNet. Retailers like Amazon do not have data from sellers about some markets in which they operate, and relying on internal seller company data is not enough, said William Phelan, president of PayNet.Amazon said it has the information it requires to make "great loan decisions" because of close relationships with sellers and that it mitigates risk by taking loan payments from proceeds due to sellers for their sales. Sellers interviewed by and writing on Amazon forums cited interest rates on Amazon loans ranging from 6 percent to 14 percent, in line with loans from banks and business credit cards.Stephan Aarstol, chief executive of Tower Paddle Boards, an Amazon seller, said he has taken four loans from the company starting in March 2014 because of the speed and simplicity of the process. It took him five days to get his first loan. "The problem for a small business owner is not the interest rate, it's the availability of credit ... I can't grow fast enough," he said.($1 = 6.2094 Chinese yuan renminbi) (Reporting by Nandita Bose in Chicago; Editing by Peter Henderson and Matthew Lewis)

Out of the shadows, China hackers turn cyber gatekeepers

Friday, June 26, 2015

Delphi says self-driving car didn't come close to Google's car

Delphi Automotive PLC (DLPH.N) on Friday offered a new description of an encounter on a California road between one of its prototype self-driving cars and a self-driving vehicle operated by Google Inc (GOOGL.O), saying "the vehicles didn't even come close to each other."The description differed from Delphi's original account on Thursday, when a company official told that a Google self-driving car on Tuesday "cut off" a Delphi self-driving car that was beginning to make a lane change. The incident occurred in Palo Alto, and no collision took place. The official was a passenger in the Delphi vehicle. To avoid the Google car, the Delphi car "took appropriate action, as it is programmed to do," the Delphi official said on Thursday. The vehicle's sensors recognized the presence of the Google car, aborted its move, waited for the Google car to finish its maneuver, then completed its own lane change, he said.On Friday morning, a Delphi spokeswoman said the Delphi car had seen the Google car move into the lane where it was planning to go. The Delphi car detected "that the lane was no longer open" so it "terminated" the lane change. The cars were about a lane width apart, according to the spokeswoman. "During a recent visit with , our Delphi expert described an actual interaction that we encounter all the time in real-world driving situations. In this case, it was a typical lane change maneuver. No vehicle was cut off and the vehicles didn't even come close to each other," the Delphi spokeswoman said on Friday afternoon. "Both automated vehicles did exactly what they were supposed to do." Google, which had declined to comment on the story on Thursday, issued a brief statement on Friday that said the "two self-driving cars did what they were supposed to do in an ordinary everyday driving scenario."A spokesperson on Friday said the news agency "stands by accuracy of its original story." (Reporting by Paul Lienert and Joe White; Editing by Tiffany Wu)

Intuit lays off 399 employees

Intuit Inc, a maker of software that helps with tax-preparation, said it has laid off 399 people.The company had about 8,000 full-time employees as of July 31, 2014.The affected employees will receive separation packages, career assistance from Intuit and will be eligible to look for another position within the company, an Intuit spokesperson said. The news was first reported by technology news website TechCrunch. Patrick Barry, who leads customer communication software maker Demandforce, has also stepped back, though he remains with Intuit, the spokesperson said. Intuit acquired Demandforce in May 2012. Barry took over the role of vice president and general manager at Demandforce last June, according to his LinkedIn profile. (Reporting By Lehar Maan in Bengaluru; Editing by Joyjeet Das)

Twitter's M&A team loses second member: Re/code

Twitter Inc's Rishi Garg, vice president of corporate development and strategy, has resigned from the company to pursue other projects, technology blog Re/code reported, citing a tweet from Garg.Garg, who led the company's mergers and acquisition team, had joined Twitter in May, 2014, according to his LinkedIn profile. He had previously worked at Square, Re/code reported. This is the second resignation at Twitter's mergers and acquisition team. Jessica Verilli resigned last month as the director of corporate development and strategy, to take a role at Google Ventures, the technology blog said. (Reporting By Lehar Maan in Bengaluru; Editing by Joyjeet Das)

Facebook staff diversity little changed over past year

Facebook Inc released new diversity data Friday that showed the number of women and minorities has remained little changed over the past year. The number of women increased only 1 percentage point, from 31 percent to 32 percent. The number of black people, Hispanics and people of two or more races remained unchanged at 2 percent, 4 percent and 3 percent, respectively. Diversity among the social network's tech workers was far less even, with 84 percent men and 16 percent women. Among non-tech workers, 48 percent are men and 52 percent women. Facebook's senior leadership is still overwhelmingly white and male. Women comprise only 23 percent of the senior leadership while men comprise 77 percent, unchanged from last year. More Asian people made up senior leadership with 21 percent this year, compared to 19 percent last year, but the number of senior-level Hispanics decreased from 4 percent to 3 percent. In a blog post, Facebook listed several initiatives to increase its diversity. They included a Facebook University training program, which invites college freshmen from underrepresented groups to spend a summer working alongside Facebook mentors, and a training course geared toward conversations about stereotypes and bias. (Editing by Bernadette Baum)

How to find the best cyber security insurance for your firm

A robust cyber security insurance policy can be tricky to procure, even for the most meticulous wealth management firms.Interest in cyber insurance has surged over the past year following a number of high-profile hackings, including one announced earlier this month involving the U.S. Office of Personnel Management. In response, many industries and the financial services industry in particular, have stepped up their vigilance against cyber crimes. Last year, financial institutions raised by nearly 20 percent the total limits of their cyber coverage with Marsh, a global insurance broker and unit of Marsh & McLennan Cos, to an average of $23.5 million.Premiums for a $10 million policy at financial institutions with under $1 billion in revenue can run between $150,000 to $175,000 per year, according to Marsh.Insurance coverage would help offset the financial burdens of a cyber attack, covering everything from notifying customers to hiring technology experts.About 50 insurance carriers offer cyber insurance in the United States, including Ridge Insurance Solutions, a global insurance company launched in October by former Department of Homeland Security (DHS) secretary Tom Ridge.More than 60 percent of brokerages examined during a Financial Industry Regulatory Authority (FINRA) review of brokerages' cyber security practices had a standalone cyber security policy, the Wall Street watchdog said in a February report. Here are some tips on finding the best policy for your firm. CURB RISKSEfforts to limit potential risks could lower premiums. Phishing attacks, or attempts to steal sensitive data, decreased at Raymond James Financial Inc since launching a cyber threat center in 2013, where a team monitors around the clock for problems, said Andy Zolper, Chief Information Security Officer. Firms should also find a carrier that will complete an "honest assessment of their vulnerabilities," to avoid purchasing a policy "full of holes," Ridge said. ENCRYPT DEVICESInsurers may reward efforts, such as the encryption of employees' mobile devices, with discounts by offering lowering deductibles and premiums, said Robert Parisi, cyber product leader at Marsh. The encryption process depends on the phone model, but is often user-friendly. CHECK FOR COVERAGE GAPS Some firms believe their coverage is complete after adding cyber riders to general business insurance. But there can be gaps, said Adam Cottini, managing director of the Cyber Liability practice for global insurance brokerage Arthur J. Gallagher & Co. For example, outdated language in insurance documents may not mention coverage for phishing attacks. NEGOTIATE SUBLIMITS A $1 million policy may offer only $250,000 in coverage sublimits for each of four potential claims categories, including legal expenses and hiring a forensic company to analyze damage. But insurers can increase those sublimits without changing the overall limit.DETAILSRead the fine print, said Hardeep Walia, chief executive of Motif Investing Inc at a May FINRA conference. A policy may exclude coverage for regulatory expenses, which may surprise firms. Insurers are cutting back as regulators home in on cyber security violations, Marsh’s Parisi said. That could leave firms on the hook for big bills, such as for legal representation. (Editing by Suzanne Barlyn and Bernadette Baum)