Shares of social media platform Twitter surged more than 20 percent in morning trading Friday on reports that the company will soon receive a formal bid from a high-profile suitor, according to CNBC.
Possible contenders for the acquisition of San Francisco-based Twitter include Salesforce, Google and other high-profile tech names interested in the data it’s collected.
“Twitter’s board of directors is said to be largely desirous of a deal, according to people close to the situation, but no sale is imminent,” CNBC reported Friday.
“One source close to the conversations said that they are picking up momentum and could result in a deal before year-end.”
Requests for comment by the Business Times from Twitter, Google and Salesforce were not returned Friday.
At the end of July, slowing advertiser demand and a weakened revenue forecast walloped Twitter, pushing its share price down as the company scrambled to reassure investors it was on the right path.
Twitter recently ratcheted down its revenue guidance to a range of $590 million to $610 million in the third quarter, a significant drop from the $681.4 million analysts had expected. More importantly, Twitter said it had “less overall advertiser demand than expected,” as brands decided not to invest in the platform, adding to ongoing concern about how it will continue to make money.
On an earnings call Tuesday, CEO Jack Dorsey, CFO Anthony Noto and COO Anthony Bain said they are confident Twitter can continue to attract new users. Twitter is hoping new live video deals will lure in more users, and with them, advertising dollars.
Video streaming is part of a suite of new features rolled out by the company in recent months, including tools to allow users to create polls, make political donations and post photos or videos without affecting the 140-character count of tweets.
Twitter also has introduced the ability to buy products and services via a one-step button.
Billion-dollar valuations and mushrooming funding round amounts gathered much of the attention of recent years in startup-land.
But a new report shows that the majority of tech startups exit before they raise any venture or private equity funding and their valuation on exit is less than $50 million.
Venture investment research firm CB Insights said in a report on tech exits in the first half of 2016 that 53 percent involved startups that had raised less than $50 million. Another 26 percent were valued at between $50 million and $200 million.
Only about 4 percent were acquired or went public with a unicorn valuation of $1 billion or more. These included General Motors buying Cruise Automation for $1 billion, Twilio going public with a market cap of $1.2 billion and Cisco Systems buying Jasper Technologies for $1.4 billion.
“That is increasing but it’s really only the strong companies that are getting acquired,” Elman said. “The acquihire market, where every team is worth something, has been falling away.”
It’s easy to see why they say that launching a successful tech startup is hard when you consider all of those numbers in the context of this rule of thumb — between 90 percent and 95 percent of them fail to achieve any sort of exit at all.
But the CB Insights report shows that it may not be necessary to do any venture visits to Sand Hill Road to sell a tech startup for millions or even tens of millions.
About 72 percent of the companies that exited in the first half did so without raising any outside venture, private equity or growth funding. That’s actually down slightly from the first half of last year when the number was 75 percent.
Cromwell Schubarth is TechFlash Editor at the Silicon Valley Business Journal.
GoPro just unveiled 3 new action cameras and a new drone
GoPro just announced its new action cameras, called the Hero 5 Black, Hero 5 Session, Hero Session, as well as a new drone called Karma.
Here are some new features and details of the new $399 Hero 5 Black action camera:
- Water-proof without a housing down to 30 feet
- A touch-display
- 4K video
- Voice control
- 12-megapixel photos
- RAW photo support
- Wide Dynamic Range video
- Improved image stabilization
The new $299 Hero 5 Session has a smaller cube-like design and has similar features as the Black model, including 4K video recording. However, it has more basic features and specs. The main differences are:
- 10-megapixel photos
- No display
- No GPS
- No RAW support
- No Wide Dynamic Range video
There’s also a $199 Hero Session model:
- 8-megapixel photos
- 1440p video recording
- Water-proof down to 30 feet
The new Karma drone costs $799 on its own, and can be bundled with the Hero 5 Black Session for $999, and the Hero 5 Black for $1,099. The Karma drone features a removable 3-axis gimbal to stabilize footage captured by a GoPro on the drone itself, in your hands, or when a GoPro camera is mounted on your equipment. The Karma will also work with the Hero 3, and Hero 4 GoPros.
Just saw Motown – the Musical in London
Was fantastic – 5 star production.
You “remember when”, you “smile” and you “sing along”. Something we need in our busy days.
Amazon is doubling down on retail stores with plans to have up to 100 pop-up stores in US shopping malls
Amazon is aggressively expanding its presence in the real-world retail market, with a plan to open dozens of new pop-up stores in US shopping malls over the next year, a source familiar with the matter told Business Insider.
The miniature retail storefronts are a separate effort from the physical bookstore that Amazon opened in Seattle last year and are primarily designed to showcase and sell the company’s hardware devices, particularly its Echo home speakers.
The pop-up stores, which are spearheaded by Amazon’s head of devices and services, reflect the company’s growing drive to reach consumers directly through a variety of access points including retail storefronts, home delivery, and innovative devices.
Just as Apple changed its relationship with customers through its sleek retail stores, Amazon is building out its vision for a new class retail business that weaves together a powerful assortment of online and physical components.
Pop-up stores, typically 300- to 500-square-foot locations in the middle of shopping malls, carry an assortment of Amazon hardware — including the Kindle e-readers, Fire TV, and the Echo speakers — as well as accessories. But the broader goal is to drive more traffic to Amazon’s online store, as these devices make it easier to purchase items there.
As of August, Amazon had 16 pop-up stores in the US — nearly three times as many as the six it had at the end of last year, according to the source. That number is expected to exceed 30 this year and could go up to as many as 100 by next year, as new stores are popping up almost every week in shopping malls across the country, this person said.
In fact, Amazon quietly launched a new site dedicated to its pop-up stores; it shows 21 now. The stores are spread across 12 states, including New York and Texas, with California owning the most (six).
End of the test phase
Amazon is hiring a number of positions for “Amazon device pop-up stores” in multiple locations that have yet to be announced, including Miami, Florida, and West Hartford, Connecticut, according to job listings.
In one of the job posts, Amazon says pop-up stores “have emerged from the test phase with a goal to expand and grow.”
Business Insider’s source said Amazon seems to be putting a lot more resources in its pop-up store expansion and that it could potentially evolve into other forms as well, such as a brick-and-mortar space similar to an Apple Store. Amazon has tested things like pop-up trucks, but those haven’t really materialized into any meaningful sales channels.
Amazon never officially announced pop-up store launches, although it did confirm the 2014 opening of its San Francisco one in the upscale Westfield Mall. And The Wall Street Journal’s Greg Bensinger discovered a smaller pop-up store in the mall a year before that.
Amazon still hasn’t closed its Westfield Mall location, despite the short-term nature of pop-up stores.
The pop-up stores come with hefty fixed costs, including leases in shopping malls and full-time employees to staff the storefronts. But they offer a new way for the company to boost its brand awareness and to drive sales, both at the stores and on its website.
Given Amazon’s obsession with data, the decision to expand the network of stores may indicate that the company has seen an uptick in online sales in the regions where it already has pop-up stores.
The pop-ups also serve a strategic purpose by providing Amazon with its own physical sales channel — something that has become especially important after big-box retailers such as Target and Walmart stopped selling Amazon devices in 2012. (Target plans to bring Amazon products back this year.)
Amazon declined to comment on its roadmap for the stores but provided this statement: “We offer pop-up kiosks so that customers can try out all our new devices and learn about our services like Prime and unique content like Amazon Originals.”
The Echo effect
One interesting part about Amazon’s pop-up stores is that they’re run by the devices team, not the retail team that opened Amazon’s bookstore last year. The initiative is led by Senior Vice President of Devices and Services Dave Limp, who oversees everything from the Kindle to the Echo.
That means the push for more pop-up stores coincides with the success of the Echo, which is widely considered to be the next big hit product for Amazon. The Echo’s success has prompted rivals such as Google and, reportedly, Apple to develop competing versions.
According to multiple sources, Amazon is increasingly putting more resources to developing the Echo and its voice technology platform, Alexa — and the pop-up stores provide an important way to raise brand awareness for both products.
Another source said Amazon played with the pop-up store concept while the Echo was being developed in 2013, as it’s a way to let people play, hands-on, with its devices, especially the unusual ones like the Echo.
“Lowering the barriers to trial and letting people feel how things actually work is a great way to start,” this person said.
It’s unclear why Amazon’s taking such a low-key approach to its pop-up store expansion. But it’s not too uncommon for Amazon to do things quietly when it’s clear that it has bigger ambitions. Amazon’s fashion team, for example, launched seven private labels over the past year — and it’s expected to overtake Macy’s as the top apparel retailer in the US by 2017.