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Facebook staff discussed selling API access to apps in 2012-2014

Following a flopped IPO in 2012, Facebook desperately brainstormed new ways to earn money. An employee of unknown rank sent an internal email suggesting Facebook charge developers $250,000 per year for access to its platform APIs for making apps that can ask users for access to their data. Employees also discussed offering Tinder extended access to users’ friends’ data that was being removed from the platform in exchange for Tinder’s trademark on “Moments”, which Facebook wanted to use for a photo sharing app it later launched. Facebook decided against selling access to the API, and did not strike a deal with Tinder or other companies including Amazon and Royal Bank Of Canada mentioned in employee emails.
The discussions were reported by the Wall Street Journal as being part of a sealed court document its reporters had reviewed from a lawsuit by bikini photo finding app developer Six4Three against Facebook alleging anti-competitive practices in how it changed the platform in 2014 to restrict access to friends’ data through the platform.
The biggest question remaining is how high in rank the employees who discussed these ideas were. If the ideas were seriously considered by high-ranking executives, especially CEO Mark Zuckerberg, the revelation could contradict the company’s long-running philosophy on not selling data access. Zuckerberg told congress in April that “I can’t be clearer on this topic: We don’t sell data.” If the discussion was between low-level employees, it may have been little more than an off-hand suggestion as Facebook was throwing ideas against the wall, and may have been rejected or ignored by higher-ups. But either way, now that the discussion has leaked, it could validate the public’s biggest fears about Facebook and whether it’s a worthy steward of our personal data.
An employee emailed others about the possibility of removing platform API access “in one-go to all apps that don’t spend… at least $250k a year to maintain access to the data”, the document shows. Facebook clarified to TechCrunch that these discussions were regarding API access, and not selling data directly to businesses. The fact that the discussions were specifically about API access, which Facebook continues to give away for free to developers, had not been previously reported.

Facebook provided this full statement to TechCrunch:
“As we’ve said many times, the documents Six4Three gathered for this baseless case are only part of the story and are presented in a way that is very misleading without additional context. Evidence has been sealed by a California court so we are not able to disprove every false accusation. That said, we stand by the platform changes we made in 2015 to stop a person from sharing their friends’ data with developers. Any short-term extensions granted during this platform transition were to prevent the changes from breaking user experience. To be clear, Facebook has never sold anyone’s data. Our APIs have always been free of charge and we have never required developers to pay for using them, either directly or by buying advertising.”
A half decade-later, with the world’s will turned against Facebook, the discussions of selling data access couldn’t come at a worse time for the company. Even if quickly aborted, the idea could now stoke concerns that Facebook has too much power and too much of our personal information. While the company eventually found other money-makers and became highly profitable, the discussions illuminate how Facebook could potentially exploit people’s data more aggressively if it deemed it necessary.

UK parliament seizes cache of internal Facebook documents to further privacy probe

Facebook staff discussed selling API access to apps in 2012-2014

Xiaomi gobbles up selfie phone brand Meitu as revenue jumps 49%

Xiaomi is diversifying into a new range of phones as the Chinese smartphone maker announced impressive growth with its latest financials.
The company announced it will take over selfie app maker Meitu’s smartphone business to go after new demographics, particularly women, while it lodged impressive 49 percent revenue growth in Q3.
Xiaomi posted a net profit of 2.481 billion RMB ($357 million) for the quarter on total sales of 50.846 billion RMB ($7.3 billion). The bulk of that income came from smartphones sales — 35 billion RMB, $5 billion — as Xiaomi surpassed its annual target of 100 million shipments with two months of the year still to go. The majority of those phones are sold in China, but the company said that international revenue overall was up by 113 percent year-on-year.
The company has ventured into Europe this year, with its most recent launch in the UK this month, but now it is taking aim at a more diverse set of customers in the Chinese market through this tie-in with Meitu. Best known for its ‘beautification’ selfie apps, Meitu also sells smartphones that tap its selfie brand with optimized cameras and advanced editing features.
Now Xiaomi is taking over that business through a partnership that will see Meitu paid 10 percent of the profits for all devices sold, with a minimum guaranteed fee of $10 million per year. For other smart products, its cut increases to 15 percent.
Meitu is hardly a mainstream phone brand. Its first device launched in 2013 and it has sold 3.5 million units to date. Recently, the company cut back on its hardware — it has launched just one device this year compared to five last year — while the average sell price of its devices has fallen, causing it to forecast a net loss of up to 1.2 billion RMB (or $173 million) up from just 197 million RMB last year. Shifting the heavy-lifting to Xiaomi makes a lot of sense — despite its total cut of sales dropping to just 10 percent, Xiaomi has impressive reach and a sales platform that already features third-party hardware.
Back to Xiaomi, these results are its first ‘true’ financials since the company went public through a Hong Kong IPO back in July. It posted a $2.1 billion profit in the previous quarter but a large chunk of spending and revenue was down to the listing.

Xiaomi gobbles up selfie phone brand Meitu as revenue jumps 49%

Crunch Report | Comcast Launches Xfinity XFi

 Today’s Stories  Comcast invests in mesh router maker Plume, launches Xfinity xFi for managing your home’s wireless network John Oliver reminds us that Net Neutrality is still under siege Facebook culls ‘tens of thousands’ of fake accounts ahead of UK election Amazon to control 70 percent of the voice-controlled speaker market this year Food startup Maple shuts… Read More

Crunch Report | Comcast Launches Xfinity XFi

Make Way For Another European Square: SumUp Launches With $20M+ In Backing

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Add one more to the list of companies going head-to-head in the area of card payments by way of smartphone attachments: today, Berlin-based SumUp is opening up for business in the UK, Germany, Ireland and Austria, backed by an eight-figure Series A round, understood by TechCrunch to be over $20 million.

SumUp’s $20 million Series A investment comes from b-to-v Partners, Shortcut Ventures, Tengelmann Ventures and Klaus Hommels, the early Skype, Facebook and Xing investor. Before the $20 million round, SumUp had been bootstrapped by its founders, which include Daniel Klein, SumUp’s CEO, who was also one of the founders of PayPal competitor MoneyBookers (later rebranded as Skrill).

Similar to services like like Square, PayPal’s Here, iZettle, mPowa, Payleven and Intuit’s GoPayment, SumUp works by way of a free dongle that attaches to a smartphone or tablet — in its case an Android or iOS device — which can then be used with an app to read cards and take payments. And like the others, SumUp is targeting the large swathe of merchants and small businesses who currently do not have the facilities to take card payments. But if this sounds a little me-too and crowded, it’s clearly a space where investors still see a lot of opportunity for a startup to make a killing.

SumUp estimates that there are some 20 million small businesses in Europe today, but a large part of them are still only able to take payments by cash and checks because of the costs and infrastructure associated with traditional card payment services. Like others in the mobile payment space SumUp is banking on the growing uptake of smartphones — currently 32% penetration in Europe overall — and the increasing reliance on card transactions — they’re growing by 18% annually — to change that.

What is perhaps noteworthy about SumUp is that it is kicking off with a full launch — not a limited beta — in these four countries, with two of them, Germany and the UK, being some of the largest retail markets in Europe. The biggest competitor in Europe, iZettle, has up to now carved out some market share in the Nordics but is still only in beta in the UK; and of course Square and PayPal, the two biggest players in the U.S., have yet to enter the market here — although that seems to be something coming very soon.

[The launch today comes after a four-month closed beta in Germany, the UK, Ireland and Austria, which had been spotted early on by the German blog Deutsche Startups. The company has some 100 employees working in Berlin, Dublin and London.]

SumUp takes a 2.75% cut of every transaction made using its reader. It currently works with MasterCard, Visa and Europay and Stefan Jeschonnek, the MD and another co-founder, says that it’s currently in discussions with other card companies to extend that list.

You may recall that iZettle has been in a pickle in Europe over Visa cutting off its service because of the method iZettle uses to authenticate card users — iZettle requires a signature, which Visa says doesn’t meet its requirements. SumUp also takes signatures for authentication, but only on MasterCard transactions. For Visa customers get sent an SMS with a secure link, which they have to access on their devices to manually enter their full card numbers.

That sounds cumbersome, but Jeschonnek says SumUp is working on another method to speed up that process in future. “We are looking at different technology that we can use, and we are considering the chip-and-PIN solution [used by merchants who have payment terminals],” he says.

Another notable aspect of SumUp’s service is that the company is already developing the idea as more than just a point-of-sale card payment provision. Merchants have the option of using the app to preload several items that they sell, and that effectively turns SumUp into a kind of cash register.

This is, for now, limited to being used within SumUp’s own service, although Jeschonnek says it is also looking at how it might leverage APIs to offer this kind of functionality within merchant’s own apps.

“But right now we’re mainly focused on the problem of getting merchants to take cards,” he says. “We’re trying to solve a problem that still hasn’t been solved.”


Make Way For Another European Square: SumUp Launches With $20M+ In Backing

Kiip Takes Its First International Steps, Inks Reward Network Deal With UK’s Yo! Sushi

yosushi-kiip-notif

Kiip — the San Francisco-based mobile marketing startup that has created a “rewards network” in which users see offers for free goods and services instead of mobile ads — is going international. The company has signed on the UK-based sushi chain, Yo! Sushi, to deliver offers for free food across apps used in the UK that have integrated Kiip’s service.

Although Kiip has had some of its U.S. customers serve ads outside of the U.S., this is the first time a non-U.S. company has signed on for the service, and the first time Kiip is sending out offers in the UK on a localized, London-only basis, to coincide with the fact that there are so many more people (and specifically Americans) in town for the Olympics. In a meeting this past weekend in a little coffee shop in London, CEO and co-founder Brian Wong told me this is just the beginning of many deals like this as Kiip ramps up its growth, on the back of a recent $11 million Series B round of funding.

The expansion comes at a time when Kiip is competing against a number of other companies that also deliver rewards instead of straight advertisements, like Foursquare and Groupon. The space remains wide open, says Wong, and “we have realized that we could become the trusted rewards provider out there.”

If there’s one thing that seems to annoy the otherwise mild-mannered Wong, it’s that Kiip often gets called a mobile advertising network. “We’re about rewards, not ads,” he told me, stretching out the r-word. He thinks ads, in their current state, have some major limits because of issues with usability and effectiveness. “When you see companies jamming ads into small formats, saying ‘let’s just shrink this billboard,’ it just doesn’t work,” he said.

Rather than trying to figure out how best to cram lots of information into a limited space, Kiip has moved the goalposts altogether and focused its use of small real estate directly on something that a customer can use immediately. While there are a number of apps on the market that push offers to users — Groupon and Foursquare being two examples — Kiip’s innovation of putting those rewards directly into apps by way of its network means that its offers go, in Wong’s words, “wherever you are.”

He says that up to now the engagement rates have been very encouraging. So far, Kiip has seen a 22%  redemption reward rate, and 50% of its redeemers come back to Kiip for more. The majority of users, Wong says, are between the ages of 18 and 34, and Kiip sees a relatively equal mix between male and female users, with ads coming in from big names like Disney, Best Buy and Procter & Gamble.

The bigger picture will see Kiip trying to better match up rewards with increasingly relevant apps. Right now, the company is still in early-adopter phase with a lot of the activity focused around gaming — either in the form of actual mobile games or in areas like fitness apps, which have a natural gamification element to them. It is here that the Yo! Sushi brand fits in particularly well — the company has a kind of Japanese-manga-inspired branding that matches well with gaming design.

But down the road, there will be separate micro-networks around areas like female-focused apps and women’s consumer products; car apps and car-related rewards, and so on. And with the increasing push on location-based offers you can see how this, too, will also start to play a more prominent role with Kiip.

Looking ahead, Kiip is planning to announce more brand partnerships in the UK soon, and it is “on the verge” of rolling out its first campaigns in the middle east and Asia Pacific, with Kiip’s London office, led by Eamonn Carey, leading much of that growth.


Kiip Takes Its First International Steps, Inks Reward Network Deal With UK’s Yo! Sushi