Category: Tech news

You’d be forgiven for thinking that’s odd, considering two of Facebook’s attempts at standalone apps failed.

Facebook built its separate Camera app for shooting, filtering, and sharing photos in 2012 as it watched Instagram’s popularity skyrocketing. But then Facebook acquired Instagram before Camera even launched, and it never saw much development after that.

In December 2012, Facebook cloned Snapchat in 12 days and launched it as Poke, an app for sending self-deleting text,, and videos. Facebook was interested in acquiring Snapchat yet was rebuffed so it built its own version instead. But a lack of organic community and entrenched worries about Facebook privacy led Poke to quickly peter out, hardly putting a dent in Snapchat.

Now Facebook has given up on Camera and Poke. Though they remain available in the App Store, the company confirmed to me they’ve been deprecated and will receive no more active development. But Facebook’s quest to build an arsenal of standalone apps is just getting started.

Today on Facebook’s earnings call, Mark Zuckerberg explained “One theme that should be clear from our work on products like Messenger, Groups and Instagram is that our vision for Facebook is to create a set of products that help you share any kind of content you want with any audience you want.”

Setting Messenger Free

As I drove in to Facebook’s Menlo Park headquarters at 1 Hacker Way in November, I was greeted by a familiar 15-foot tall thumbs up. But for the few weeks before, the billboard at the entrance to Facebook’s campus had been emblazoned with a symbol of its future: the new Messenger icon. In case there were any doubts, launch of the completely redesigned Messenger app was a big deal to the company.

For the past year, it had watched slim and stylish messaging apps explode in popularity around the world by using people’s phone books to kickstart their social graphs. WhatsApp is Messenger’s biggest and most direct competitor, and it now has 430 million users. China’s WeChat has 272 million active users thanks to growth where Facebook can’t go.  Japanese sticker-messaging app Line had 300 million as of November, and South Korea’s KakaoTalk with its own gaming platform has 130 million users. Meanwhile, Facebook is encountering increasing competition from Google’s mobile Hangouts messenger and Twitter’s newly highlighted Direct Messages.

So Facebook set out to rebuild Messenger. In November it launched and I got a chance to sit down with its development team: Product Design Manager Luke Woods, Product Manager Peter Martinazzi, and Facebook’s Vice President of Growth and Analytics Javier Olivan. What began as a rebranded version of group messaging app Beluga that Facebook acquired in March 2011 had finally been given its own identity. You can watch my interview with the team at Facebook Headquarters below:

The design got a complete overhaul that distances it from the look of Facebook’s kludgy all-in-one main app. Gone is the heavy Facebook-blue top banner. In fact, the word “Facebook” hardly appears in Messenger at all, and its logo and navy hue have been banished too. Instead, it’s filled with breezy whitespace and simplified navigation.

Woods proudly explained to me “You can tell it’s a different app. It’s not like the old Messenger. The icon is different, the color is different. We want you to recognize this is new. And with time we’re going to make it more and more distinct, and more clear it’s a standalone product.”

Messenger even sounds different. It’s got its own range of carefully composed tones for sending and receiving messages, but also new ones like a little keyboard clatter that tells you your conversation partner is typing. It’s optimized for Facebook’s cutesy stickers that let people express complex emotions quickly and vividly. And new indicators tell you if a friend is on the web, on mobile without Messenger, or has Messenger installed and will be more likely to respond quickly.

Facebook is even letting you message people who aren’t on Facebook with the app. Martinazzi told me “There are a lot of graphs in your life. Everyone you’ve ever emailed, you have your address book on your phone, and you have your Facebook graph.” Facebook integrates those by letting you text people by phone number from within Messenger, so you don’t have to ditch out to SMS if someone you want to talk to doesn’t have a profile on the social network. That’s been a talking point of Facebook’s messaging competitors that’s now been eliminated.

But the biggest change isn’t how the app looks or works, but how you get to it. In an on-stage conversation with Mark Zuckerberg at a private Facebook developer event on November 14th 2013, the CEO told me:

“The other thing that we’re doing with Messenger is making it so once you have the standalone Messenger app, we are actually taking Messenger out of the main Facebook app. And the reason why we’re doing that is we found that having it as a second-class thing inside the Facebook app makes it so there’s more friction to replying to messages, so we would rather have people be using a more focused experience for that.”

Zuckerberg calling features buried inside the main app “second-class” is a big indicator for how he sees Facebook’s mobile strategy evolving.

Previously, Facebook’s main app had its own messaging tab, which was redundant and confusing if you also had Messenger. It wasn’t clear which to respond with, and loading the entire main Facebook app just to get to messages was slow. So with the big relaunch, Facebook made it so if you have Messenger installed but tap the messages tab in the Facebook app, you’d be quickly app-switched to Messenger.

Olivan tells me “We’ve realized we were trying to put too many things in the same app at the same time.” Martinazzi followed up, emphasizing “To do mobile you have to be fast all the time. Standalone apps can load faster.”

It’s bit strange to get bounced around, and the app-switching replaces the enjoyable overlaid messaging bubbles called Chat Heads that were ported to Facebook’s iOS app from Home. But overall, the new Messenger feels like it was actually built for mobile, instead of being Facebook’s website crammed into a small screen.

And users like it. Mark Zuckerberg said today on Facebook’s Q4 2013 earnings calls “The number of people using Messenger grew more than 70% in the past three months, and we’ve seen a large increase in the number of messages sent. We have a lot more coming to Messenger in the first half of this year.”

That’s not the only app Facebook’s working on, though. Zuckerberg wants to bring this feel and engagement increase to more of its features.

First-Class Standalones

On stage in front of a crowd of third-party developers and employees but no press, Zuckerberg spoke candidly with me about what mobile will look like for Facebook in 2014. I asked for his thoughts on unbundling Facebook’s functionality in an effort to appeal to mobile-first and younger audiences. Zuckerberg said (emphasis mine):

We just did this big Messenger release and certainly having Instagram here is really shaping our thinking on how you can build out these communities and reach a global maximum for the impact an app can have rather than a local one. So the thinking I think we’ve had in the Facebook mobile app for a while is that experiences that we might add, whether that’s Groups or Events or things like that can reach a lot of people because the vast majority of phones have Facebook on them and people are using Facebook everyday.

About 20% of the time people spend in mobile devices is on Facebook, so having these experiences tied in is a good way to seed them. But if you have something like Groups, it’s always going to be kind of second-class in the main Facebook app, or even messaging for that matter. In order to make these things really be able to reach their full potential, I do think over time we’re going to have to create more specific experiences. And you’re seeing us do this right now with Messenger…

…And now there’s this big question, we don’t know how far this goes. Right, obviously you don’t want to have 30 different Facebook apps. So we need to figure out exactly where that goes, but in general, I do think that you’re going to want to move towards more of these focused experiences over time.

Facebook has made a big deal about reorganizing talent to make it so every team builds its own mobile products. On today’s earnings call it announced that its surpassed the halfway mark for the first time and now 53% of its ad revenue comes from mobile. But it’s the shift to standalone apps that Zuckerberg reveals in the quote above that truly makes Facebook a “mobile-first company”.

Over the next year we might see Facebook giving small teams more freedom to build apps that nail a specific use case and delight a particular audience. That matches The Verge’s Ellis Hamburger‘s sources who say Facebook is planning a suite of standalone apps in 2014. And today on Facebook’s Q4 2014 earnings call, Zuckerberg confirmed the company is focused on building separate apps that let people share different types of content with different size audiences, rather than sharing to all friends through the News Feed.

As Zuckerberg suggested, Groups and Events could be two features unbundled. Facebook launched Groups as a web-first product back in October 2010 and it hasn’t changed much since Facebook got serious about mobile. But today on the earnings call, Zuckerberg said there’s more than 500 million people using Facebook Groups, hinting Facebook might try to capitalize on that interest with a standalone Groups app.

Meanwhile, Events have become one of Facebook’s most unique features. It’s a popular place for organizing and promoting birthday parties, cultural events, club nights, and more. While Eventbrite is often used by organizers trying to throw ticketed events, for gathering people for free events Facebook is far and away the most popular choice. A standalone Events app that offered users a calendar of the upcoming events, discovery of nearby events they haven’t been invited to, and their friends birthdays could gain serious traction with Facebook’s most outgoing users.

And soon, Facebook is expected to launch a reimagined news reading experience we first caught wind of a year ago. More recently, Re/code’s Mike Isaac reports the product is called Paper and will let people share news stories from a variety of publishers and their friends, some of which are curated by human editors working for Facebook.

All of these center around a new insight Zuckerberg outlined on today’s earnings call: People don’t just want to share with all their friends at once. They want to share all different types of content with audiences of a variety of sizes. That means sharing status updates and photos, but also links, locations, games, and more with a loved one, a small cluster of friends, a big group of acquaintances, or publicly. Zuckerberg concluded “We want to build a handful of great experiences that are separate from what you think of as Facebook today.”

[Image Credit: Demian Rosenblatt via Electric Literature, Cristophe Tauziet]

Google has just let us in on another tidbit about the deal it has built with Lenovo over the sale of its Motorola Mobility assets: It keeps the high-tech Q division-type stuff being developed at Motorola’s Advanced Technology Group. That means the Ara modular smartphone concept, as well as sensors you swallow and passwords you tattoo on your skin.

The Advanced Tech team is headed by one-time Defense Advanced Research Projects Agency director Regina Dugan, and has been behind some of the more sci-fi things that Google has demonstrated since acquiring Moto’s mobile biz.

Project Ara was one of those projects that garnered a lot of attention back in October. It essentially features a single base unit design that pairs with components that can swap out including keyboards, bigger batteries, memory, sensors and more. Users can easily customize the device to taste using these parts, building the perfect phone for business, or for travel, or for media consumption etc. And this isn’t something that’s still so far away as to be purely contemplative: Google said back then it would be launching a pilot beta test of the Ara soon.

Motorola’s crack research team was also working on truly wearable (and ingestible) tech, including passwords that are embedded tattoo-like beneath your epidermis and can be activated on command, and authenticators that can be swallowed in pill form. Another ingestible product discussed on stage at D11 last June was a sensor that could be swallowed to relay medical information to a user and their doctors.

One more recent Motorola Advanced Tech project revealed in a patent filing in November details a lie-detecting neck tattoo that uses embedded electronics to take in auditory information via microphones and relay that back to an attached smartphone for analysis. Lie detection is just one possible use (imagine audio recording or other types of environment sensing, too) but it’s definitely an intriguing one.

All of this stuff fits pretty nicely under the Google X division at Google, where its other kooky experiments are currently housed. Luckily this part of the deal should mean we’ll see the Advanced Tech team continue its work under that department, or anywhere at all really, since it’s too interest-grabbing to just mothball away.

Google just took to the wires and announced the sale of Motorola Mobility to Lenovo for $2.91 billion. TechCrunch obtained the following internal Google memo that outlines the reason for the sale and plan going forward.

Towards the end of the memo, Larry Page thanks the Motorola team and states the obvious that he is confident that Lenovo can drive the Motorola brand forward.

More as we get it.

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CONFIDENTIAL – DO NOT FORWARD

Googlers,

We are just in the process of announcing the sale of Motorola to Lenovo for $2.91 billion. This is important news so I wanted to communicate directly with you.

We acquired Motorola in 2012 to help supercharge the Android ecosystem by creating a stronger patent portfolio for Google and great smartphones for users. Over the past nineteen months, Dennis Woodside and the Motorola team have done a tremendous job reinventing the company.  They’ve focused on building a smaller number of great (and great value) smartphones that consumers love.  Both the Moto G and the Moto X are doing really well and I’m very excited about the smartphone line-up for 2014.  And on the intellectual property side, Motorola’s patents have helped create a level playing field, which is good news for all Android’s users and partners.

But the smartphone market is super competitive, and to thrive it helps to be all in when it comes to making mobile devices.  It’s why we believe that Motorola will be better served by Lenovo–which has a rapidly growing smartphone business and is the largest (and fastest growing) PC manufacturer in the world.  This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere.  As a side note, this does not signal a larger shift for our other hardware efforts.  The dynamics and maturity of the wearable and home markets, for example, are very different from that of the mobile industry.  We’re excited by the opportunities to build amazing new products for users within these emerging ecosystems.

Lenovo has the expertise and track record to scale Motorola into a major player within the Android ecosystem: they have a lot of experience in hardware and they have global reach. In addition, Lenovo intends to keep Motorola’s distinct brand identity–just as they did when they acquired ThinkPad from IBM in 2005.  Google will retain the vast majority of Motorola’s patents, which we will continue to use to defend the entire Android ecosystem.

The deal has yet to be approved in the US or China and this usually takes time.  So please don’t speculate about the impact of the deal either outside or inside Google, and direct any press inquiries to [email protected].  Until it closes it’s business as usual.  But if you have any questions, please come to TGIF tomorrow (or add them to the dory).

Finally, a big thank you to the entire hard working Motorola team.  I’d also like to thank Dennis for taking this on and also working really hard to make great products.  I’m proud of everything the team at Motorola has achieved and confident that with Lenovo as a partner, Motorola will build more and more great products for people everywhere.

Stock quotes were among the first things Google added to its search results pages when it launched “universal search” back in 2007. Since then, its stock quotes widget has gone through a few iterations and today, it looks like the company has launched a redesigned version.

There are no new features here as far as I can see. The new widget has a slightly cleaner look, bringing it more in line with the rest of Google’s tools. For the most part, Google moved the buttons that allow you to select different timeframes to the bottom of the widget.

One thing users will notice, though, is that the company removed the links to its competitors Yahoo Finance and MSN Money that had been prominently featured at the bottom of each widget. Those were always featured on Google’s search results pages – even in early versions of the widget.

Back when Google first launched these kinds of widgets that featured its own services, having these links as part of the package helped the company deflect criticism that it was favoring its own services over those of its competitors. At one point, Google also linked to AOL, CNN and Reuters, but it dropped those links with the last redesign back in 2012.

Google obviously continues to link to its competitors’ finance sites, but the prominent links to the stock charts on these sites seem to be gone for now.

We have reached out to Google about this change and will update this post once we hear back.

Motorola Mobility is being sold to Lenovo, in a deal worth $2.91B. Google is divesting itself of the handset division it purchased for $12.5B in 2011, but it will keep some of the assets — including patents.

“Google will maintain ownership of the vast majority of the Motorola Mobility patent portfolio, including current patent applications and invention disclosures,” says Motorola Mobility CEO Dennis Woodside. “As part of its ongoing relationship with Google, Lenovo will receive a license to this rich portfolio of patents and other intellectual property. Additionally Lenovo will receive over 2,000 patent assets, as well as the Motorola Mobility brand and trademark portfolio.”

When Google purchased Motorola Mobility, much of the discussion swirled around whether it was buying it simply to own a hardware pipeline on which to deliver its Android juice — or whether it wanted patents for protection. The answer, as is typical, lay somewhere in the middle. Though the Motorola patents never turned out to by incredibly effective winning solo battles against Google’s patent enemies, they did work as a part of a larger tactic which has seen Google aligning itself via cross-licensing with OEMs like Samsung.

One segment of the statement today by Woodside was interesting:

Since being acquired by Google in 2012, Motorola has transformed itself, focusing on solving real consumer problems and providing amazing experiences built on a foundation of pure Android. The result has been Moto X, Moto G, and a reinvigorated Droid line. Together, these devices have won over consumers and critics alike and helped re-establish the Motorola brand around the world.

Indeed, Google’s purchase and investments in Motorola did raise the flagging manufacturer’s profile significantly over the intervening years. They have several well-received smartphones on the market and have made a lot of noise about technology innovations in wearable computing and DARPA-think-tank-director hires.

Google sold off several aspects of its initial Motorola purchase including its cable box business. And it managed to leverage the patents — which Google valued at $5.5B — to at least some positive outcome. So, while the monetary ‘wins’ or ‘losses’ here are one for the bean counters to figure out, the strategic victories for Google may actually be fairly strong. According to some maths from analyst Benedict Evans, Google’s total outlay may have been closer to $7.15B than $12B — the divestitures, retention of patents and the sale price would cut the plain monetary loss down further to under $2B.

There is now a renewed Android vendor on the market peddling Google’s OS, in the care of Lenovo, the logistics firm that made IBM’s old enterprise business the biggest consumer computer retailer in the world. And it has some new cross-licensing agreements on patents — the majority of which it gets to keep.

And, with the purchase of Nest, it has a fresh young hardware company with a design focus and a set of high-profile talent.

“As a side note, this does not signal a larger shift for our other hardware efforts,” noted Google CEO Larry Page in an announcement today. “The dynamics and maturity of the wearable and home markets, for example, are very different from that of the mobile industry. We’re excited by the opportunities to build amazing new products for users within these emerging ecosystems.”

It may look bad in the raw math, but may not turn out so bad for all parties when the pieces settle into place.

Image Credit: Hades2k

Dell continues making bets on Android in its computing lineup with a new $129 device that brings Google’s mobile OS to any TV or display with HDMI input. The new stick runs Android Jelly Bean, also supports MHL connections (mobile high-def) and offers Bluetooth and mini USB for mouse, keyboard and other device connectivity.

In addition to onboard connectivity for Bluetooth, the new Dell Wyse Cloud Connect also offers 802.11n dual-band Wi-Fi and the standard Google Play store for Android software. It’s an enterprise and business focused device, however, and also has Dell’s Wyse PocketCloud software preloaded to help it act as a virtual terminal for remote computers.

This is, in effect, supposed to be the long-vaunted and sought-after thin client PC you can carry with you in your pocket that still manages to provide access to all your files, software and communications back home. Of course, that doesn’t mean it can’t also provide entertainment options to business travellers, since it’s capable of full HD output and should be able to easily run Netflix’s Android app.

That “multi-core” Cortext-A9 ARM SoC might not be the most muscular mobile processor in the world, but Dell does specifically tout its HD and 3D graphics abilities in its specs sheet. It has 8GB of onboard storage, and 1GB of RAM, plus a micro SD slot that supports up to 72GB of additional space.

Based solely on surface impressions, you could do far worse in a pocket computer for those gruelling weeks on the road if you’re a frequent business traveler. It’s interesting to see Dell move in this direction, effectively taking a page out of the playbook of devices like the Ouya and the Gamestick but cutting out all the nonsense and painting it with a business brush.

Weirdly, more than anything else over the past half decade at least, this makes me want a Dell computer. Go figure.

Yesterday Naoki Hiroshima, an Echofon developer, posted an article about how he lost his extremely short Twitter handle @N in an extortion scheme. Hackers compromised his GoDaddy account with social engineering (calling and lying to an account rep), gaining access to his email on a personal domain.

They said that they gained access via a similar call to PayPal, who the hacker claimed gave them the last four digits of Hiroshima’s credit card. They then used that CC info to convince GoDaddy that they were the owner of the domain, and reset his login information.

They used that data to leverage Hiroshima into giving them — under duress — his low-character-count Twitter user name @N. This, it turns out, was the point of the entire affair from the beginning.

PayPal has since investigated and claims that it never gave out Hiroshima’s credit card number or any other personal information — though it does acknowledge there was an attempt to get the info. So, that leaves a question about whether the hacker was lying about where it got Hiroshima’s card numbers — but it doesn’t change the fact that the hack happened.

And it leaves an even bigger question. The hack is pretty well documented and it appears evident that the end result was fairly straightforward extortion. So why hasn’t Twitter simply given Hiroshima his @N username back?

Twitter, for its part, will only tell us that it is still investigating the matter.

We spoke to Hiroshima about the ordeal and exactly how it went down. He notes that it’s highly improbable for the hacker to have gained access to his account without credit-card numbers somehow, and that they claim it was via PayPal. He also says that he feels he did everything normally expected to prevent this kind of thing, but that the methods used by the hackers side-stepped any additional efforts he might have taken like two-factor authentication.

“[Two factor authentication] can’t prevent this from happening again,” says Hiroshima. “GoDaddy allowed the guy to reset everything over the phone. As long as a company only uses the last 4 digits of a [credit card] to verify [identity], this will keep happening. They should ask multiple questions.”

GoDaddy has said that it is investigating but has not responded to a request for further comment.

The vector for the attack, in the end, was the weakest link in many security procedures: people. A well-documented attack on Wired writer Mat Honan last year was predicated with relatively similar tactics. The target of Honan’s attack was also a low-character Twitter account.

The question about what can be done to improve security in these matters is a long-running one. There have been some changes like two-factor authentication being offered by more vendors — but sloppy procedures like allowing account resets with credit-card numbers (especially partial ones!) remain commonplace.

And the fact is that many of these ‘hacks’ don’t take any special technical knowledge. They just require a methodical and bold operator that is willing to pick up the phone and follow a script.

Hiroshima also notes that many of these systems are designed to make it easy to change things by phone, but nearly impossible to revert them afterwards.

“They should design the system so that reverting should be easier than changing,” Hiroshima says. “That the attacker changed something was something that can happen, the problem is, I couldn’t revert the change. If someone updated something and someone else said “no” immediately after, what’s the chance of the latter guy is the attacker?”

As far as why Hiroshima’s Twitter account hasn’t simply been ‘given back’ to him — the answer likely lies in the fact that he felt so threatened by the hacker’s access to his accounts that he ‘gave’ the account over willingly. Had he held out and waited for them to cause more damage or take over the account by main force or another feat of customer service manipulation, it would have been a much simpler matter. It would have been stolen and could be returned.

Now, because the account was ‘transferred’, it’s a much murkier affair and Twitter will likely have to do more due diligence before it takes any action. So Hiroshima will probably get @N back, but it will take a bit.

It’s worth noting that Twitter appears to have banned the @N account at the time of this writing, so the gears are turning.

Image Credit: Manuelxk

TechCrunch has confirmed reports that Lenovo is buying Motorola Mobility from Google. This is the division within Google that the company purchased in 2011 for $12.5 billion. Motorola Mobility will go to Lenovo for $2.91 billion.

Of that $2.91 billion, $1.41 billion will be paid at the close of the deal. $660 million will be comprised of US cash and $750 million in Lenovo ordinary shares. The remaining $1.5 billion will be paid in the form of a three-year promissory note.

Google will maintain ownership of the vast majority of the Motorola Mobility patent portfolio. Lenovo will still receive 2,000 patent assets and the Motorola Mobility brand and trademark.

According to a separate report published by Reuters, Lenovo is being advised by Credit Suisse Group while Lazard Ltd advised Google on the transaction.

“As part of Lenovo, Motorola Mobility will have a rapid path to achieving our goal of reaching the next 100 million people with the mobile Internet. With the recent launches of Moto X and Moto G, we have tremendous momentum right now and Lenovo’s hardware expertise and global reach will only help to accelerate this,” said Dennis Woodside, CEO, Motorola Mobility, in a released statement.

According to our source, Google wanted to dump the asset for some time. The company had to hold off selling the division for tax reasons.

Motorola Mobility’s performance has yet to live up to its purchase price. Since Motorola split and its consumer division went to Google, it has been a constant source of red ink. Motorola lost quite a lot of money: $248 million in the last quarter alone. Google sums this well, noting that the loss was “-21% of Motorola Mobile segment revenues.” Motorola lost $192 million in the year-ago quarter, so the trend here isn’t positive.

Google previously sold off the cable box division of Motorola Mobility for $2.4 billion.

This comes just weeks after Google purchased the hot hardware startup Nest. Since then, Nest’s role in the budding conglomerate that Google is turning into has been widely speculated about. With Motorola gone, Nest’s superstar team that includes many former Apple engineers seemingly has an empty playground.

It seems this complete’s Lenovo’s quest for an established cell phone business. It was rumored back in October that the company submitted a bid for BlackBerry. That deal clearly didn’t pan out.

Simply buying its way to the top worked for Lenovo in the past. In 2005 Lenovo purchased IBM’s personal computer division for $1.25 billion. That purchase alone caused Lenovo to be the world’s third-largest computer maker. But, using the established brand, Lenovo scaled the PC division to become the largest shipper of PCs in the world. In the last months of 2013 Lenovo overtook HP.

Just last week, Lenovo announced a plan to buy IBM’s x86 server business for $2.3 billion.

As the dust settles on this deal, it’s clear that Google took a large loss on its venture with Motorola Mobility. Google acquired an established brand with a vast portfolio of patents, a mature distribution system and a knowledgeable manufacturing arm. Even after pouring money and resources into the historic American brand, Google couldn’t make lemonade with Motorola. Maybe Lenovo, the now-leader in personal computers, will have better luck.

More as we get it.

Today Facebook reported its fourth quarter financial performance, including revenue of $2.59 billion and earnings per share of $0.31. Analysts had expected the company to earn $0.27 on revenue of $2.33 billion. Both EPS figures are non-GAAP, of course.

In regular trading, Facebook fell around 3%. In after hours trading, Facebook is sharply up.

The company’s GAAP net income for the period was $523 million, up a huge margin from its piddling $64 million in the year-ago quarter.

Since its public offering, Facebook has been on a ride. The company went public for $38 a share, fell to as low as $18 per share, and has since rocketed over the $50 dollar mark. The company is now quasi-legendary for its shift from desktop to mobile ad revenues. After its offering, the market fretted that Facebook would not be able to make money on smartphone usage. That was wrong.

In the sequentially preceding quarter, Facebook had revenue of $2.02 billion and earnings of $0.25 per share.

Today, Facebook reported that its mobile share of ad revenue was 53%.

For its full calendar year, Facebook had revenue of $7.87 billion, up 55% year over year, and net income of a pat $1.50 billion. Daily active users of Facebook in December totaled 757 million, up a modest but in-line 22%. Monthly mobile users of Facebook, a key metric for the company, rose 39% by the end of the year to 945 million.

All told, the good ship Facebook is cruising along. This is a strong quarter in nearly every possible way, though I will say the 53% figure is only a 4% (net) change from the preceding quarter, making it a slower growth pace than expected. Still, Facebook’s growing mobile userbase should give that number space to run.

We’ll be tuning into the Facebook call, on which we will hopefully hear about usage of Facebook among younger demographics, a key market subset for the social company.

Facebook hit a major milestone with today’s Q4 2013 earnings as it crossed the halfway point and now earns 53% of ad revenue from mobile, or $1.37 billion of its $2.59 billion in revenue this quarter. The small-screen skrilla comes from 556 million daily mobile users up from 507 million in Q3, and 945 million monthly mobile users up from 874 million. Overall, Facebook hit 757 million total daily users and a cool 1.23 billion monthly users up from 1.19 billion in Q3.

Facebook reached 49% of ad revenue from mobile in Q3 2013 up from 41% in Q2 and 30% in Q1. But now 53% of its $2.59 billion in revenue came from mobile. On the earnings call, Facebook said Q4 was its first billion dollar mobile ad revenue quarter, and it made nearly as much on mobile in Q4 2013 as it did from mobile and desktop in Q4 2012.

The boost has been driven by Facebook’s mobile app install ads that help developers get their apps discovered outside of the cluttered app stores. This quarter Facebook also introduced new mobile app re-engagement ads that can get users back into apps they downloaded and forgot about. “This is working even better than we hoped” COO Sheryl Sandberg said on the earnings call.

While many predicted the mobile era might kill Facebook, the company has made a remarkable shift on the business side to take advantage of the new medium where others have faltered. Because users spend so much time in Facebook’s News Feed and it knows so much about them, it can show well-targeted, relevant, full-screen ads that bring in good rates. That’s helped every geographic region see total revenue increase of 65% or more over the year.

As for user growth, Facebook’s mobile-only user count increased significantly from 254 million in Q3 2013 to 296 million in Q4. That could mean Facebook users are ditching their desktop entirely, or it’s just recruiting more mobile-only users in developing nations where desktops are scarce.

While Facebook’s total monthly user count increased 3.36% this quarter and 16% year-over-year (172 million), in the US + Canada it only grew 1% from 199 million to 201 million in Q4. That signals Facebook is reaching saturation in those markets and may have begun to lose steam with younger demographics.

On last quarter’s earnings it admitted that it saw “a decrease in daily users specifically among younger teens” which caused its share value to drop 15%, erradicating growth it made from strong Q3 financials.

At 4:50pm EST, just before the earnings call, Facebook shares are up 10% to $58.90 in after-hours trading. But as I wrote this morning, teens have the potential to make or break Facebook’s share price today. You can expect all ears to be listening for what Mark Zuckerberg says on the upcoming earnings call about how kids are using Facebook.

Update: Facebook said it didn’t have any new data to share on teens. Without damning evidence to go on, investors have responded favorably to Facebook earning $2.59 billion in revenue.

What was interesting was how Zuckerberg outlined a big new strategy for Facebook: more standalone apps. Read about it in my long-form feature piece “Facebook’s Plot To Conquer Mobile: Shatter Itself Into Pieces“.]

Click below for more on Facebook’s earnings:

When it comes to hosting, there are basically two billing models: pre-paid monthly (and sometimes annual) bills or metered billing. Most cloud computing platforms, including AWS, use metered billing and only charge their users for the resources they actually used. Linode, the popular cloud hosting company, is now switching to metered billing as well.

Existing users will still be able to switch or they stick to their pre-paid monthly plans. Once the metered billing comes out of beta, it will become the default for new customers.

Unlike Amazon and other platforms that have pretty complex pricing plans, Linode is opting for simplicity. Instead of paying separately for storage, I/O, compute power and network transfer, everything will be bundles within a single hourly fee.

For the company’s smallest machines (which come with a gigabyte of memory and 48 gigabytes of storage), the new prices will start at $0.03/per hour. Users, of course, can add a number of extra features to these, which will also be billed hourly and bundled into a single bill that arrives at the end of the month.

One interesting twist here is that all of the plans come with a monthly cap. “Each month has a different number of hours. January has 744. February has 672. April has 720,” the Linode team wrote on the company’s forum today. “Imagine if your bill was different every month!” For AWS users, of course, that’s exactly what happens.

Over the last few months, Linode has lost a bit of mind share to new competitors, including DigitalOcean, which always charged by the hour. It’s hard not to look at Linode’s move as a reaction to this, but it’s also simply a reflection of what developers expect from their cloud computing services: being able to quickly start up and shut down a machine as needed without having to deal with refunds and credits at the end of the month.

I’m especially fond of business ideas formed by real people, in the trenches, in real jobs, trying to solve real problems that immediately affect them. Seeing that the idea could benefit others and turn a profit as a startup at the same time makes it all the better. I don’t know, it just seems less sterile than a fleet of Ivy League MBAs building a business model around pure data crunching (also a viable and historically successful method too, I should add).

There’s a certain Cinderella mystique around four Ohio accountants, who, not wanting to waste valuable time calling and re-calling their clients on the phone to remind them of needed tax documents, came up with an idea for a better mouse trap…a document reminder service to do that work for them.

Enter Sqrl, which is launching today.

To restate the problem Sqrl solves (in case you are not a CPA):

“Accountants and other professional knowledge workers spend as much as 25% of their time manually creating, tracking, following up on and processing requests for essential client information. Sqrl (pronounced “squirrel”) solves the problem of lost time and profitability with a request engine that automates and manages routine communication and requests. It effectively eliminates the need to ever follow up.”

So basically, it’s a service you can pay for as an accountant, that reminds your individual clients of every file they need to provide to you. It also includes a mechanism for uploading and delivering those files to you. Only after all of the necessary files are delivered are you — the accountant — notified that you are ready to begin working on that specific client job.

Sqrl was conceived as an internal solution by founders Ryan Watson, Ryan Baker and Craig Baldwin, for their online accounting firm, Upsourced Accounting. After going through The Brandery accelerator in Cincinnati and hooking up with developers Zack Brown and Drew Miller to spin up the startup, they secured $550,000 from CincyTech, Hyde Park Venture Partners, and Vine Street Ventures.

The basic feature set of Sqrl will be offered to users free of charge. There are multi user plans which will eventually contain premium features, such as white labeled notifications, customized security, and team collaboration.

The service is targeted at small and regional accounting firms, but could scale to any profession managing lots of documents on behalf of clients (advertising agencies, legal firms, financial advisors). It’s a good idea, and I could see this catching on.

Your boss says “You’ve got a budget of $300 a day for this trip.”

You hear “Go spend $300 dollars a day! Have fun!”

Rocketrip, a company out of the latest Y-Combinator batch, wants to save companies money by paying the employee to find ways to travel on the cheap.

The idea behind Rocketrip: for every two dollars you save your company, you get paid one. If hotel rooms in the area are, say, $150 a night, and you opt to crash on a buddy’s couch instead, you just saved the company $150 bucks. You get a gift card for $75, and the company still saves $75. Find a promo code that saves you $10 off your rental car? Bam — that’s $5 bucks for you.

At least, the slightly simplified version. It’s a bit more complicated than that in process, as there’s a point system involved. Every $2 you save the company earns you 10 points, and every 10 points you earn = $1 on a gift card (be it Amazon, Best Buy, Target, J Crew, AmEx, or one of their other 20+ vendors). But to simplify it: you save the company $2, you get $1.

Why wouldn’t a company just set a budget and forget it? It’s all about the mindset. When you give people a dollar cap, they tend to spend that money like it’s someone else’s. That becomes even more true as a company gets larger; when the budget they’ve allotted you seems like a drop in the bucket, and is handed down from some mysterious budgeting department that for all you know is on the moon, it’s a bit easier to spend with disconnected disregard.

Reward people for saving money by giving them money, however, and (theoretically, at least), people will be frugal. Your company only keeps 50% of the savings, but that’s better than saving nothing — especially when you multiply those savings by however many hundreds or thousands of employees a large company might have.

Here’s how it all works:

• You tell Rocketrip where you’re going, and what you need — like, say, flights, hotel, and a car for a trip from SF to New York.
• Rocketrip figures out how much a trip like that should cost, on average, based on realtime market data (read: they check the current prices) and the policies put in place by your company (Can a certain employee fly business class? SUV or compact car?).
• You book your travel, and forward the receipts to Rocketrip.
• Rocketrip calculates how much you saved the company, sends’em an invoice for half that amount, and gives you your “points” accordingly (remember: $2 saved = 10 points, 10 points = $1 on a gift card.)

Sound familiar? Depending on where you’ve worked before, it might! I’ve heard of a few companies doing something similar — most notably, Google. In fact, Rocketrip president Daniel Ruch openly admits that this is loosely based on what Google reportedly does internally. When a Google employee travels for work, half of the money that they save under a pre-set cap is credited to an internal account, and they can spend that money on a later trip (for things like upgrades) or while on the trip itself. Rocketrip just opens that concept up to everyone.

Rocketrip doesn’t plan on charging companies for the service, outside of invoicing them for whatever an employee is owed. So how do they make money?

While Ruch gave me the standard “We’re focusing on the product” answer that most startups give early on, they’ve actually already got something of a business model in place. In fact, they’re making money from two arms of the arrangement. On one end, they’re making money from the gift card vendors, who are willing to give them a small cut for the sake of customer acquisition. On the other, they’ve got travel vendors; if a customer opts to use a certain site (like say, Expedia) to book their travel, Rocketrip makes a bit of a commission.

Rocketrip is currently bringing companies on one-by-one. If you’re interested, you can find the sign-up details here.

[Top image credit: Peshkova on Shutterstock]

Social magazine Flipboard is rethinking how it organizes content for readers. Today the company is revamping “Cover Stories,” the section within Flipboard that highlights the best and most popular content from across your subscriptions.

This feature was initially developed using technology Flipboard acquired several years ago from Ellerdale, an early semantic web startup. The system is designed to surface not just the trending content that others are sharing or clicking on, but also content that’s most relevant to you based on your own interactions (separate from general popularity).

Before today, Cover Stories would offer a mix of articles and social updates from your subscriptions and networks, but the selection could come across, at best, as an eclectic gathering of news and, at worst, as something of a chaotic mess. Now, that changes.

“In the early days, we did a great job at presenting content in a way that’s magazine-like, but what we haven’t done yet is structure that content in a way that feels like a magazine. That’s what we’re starting to do now,” explains Flipboard co-founder and CEO Mike McCue.

With the revamped Cover Stories section, you’re still able to flip through the section as usual, but the content is more ordered. Navigation on the right side of the screen shows you a list of “sections” based on your favorite sources. This list is led by “Flipboard Picks,” the service’s own recommended content.

For example, you might have the top stories from The New York Times, followed by a couple of blogs you frequent, then sections dedicated to the trending activity on social networks like Facebook, Twitter, or Instagram. Over time, Flipboard will learn what sections you engage with the most and will feature those more prominently here, the company tells us.

Flipboard is also starting to think about how it can better organize articles by something other than just source (i.e. publisher). It wants to smartly group articles by subject matter, too. You’ll start seeing this roll out now, beginning with Flipboard’s editorially curated magazine “The Weekend.” Here, articles will be grouped into sections like ”Now in Theaters,” “What’s on TV,” “Sports Weekend,” “Sunday Reads” and more.

This idea of structuring Flipboard content more like a real magazine, the company explained to us last week while demoing the beta, will eventually roll out to all of Flipboard’s editorial content over time. Today, the company curates a number of editorial sections ranging across categories like News, Business, Tech, Sports, Shopping, Photos, Arts & Culture, Travel, Food & Dining, Style, Music, Books, and much more.

The challenge for Flipboard going forward is to make sure its users continue to explore their larger collection of subscriptions, where their activity can help inform the “Cover Stories” algorithm as to their interests.

Most users subscribe to around a dozen sources of content, but some users have hundreds, we’re told. These more voracious news readers could end up relying on “Cover Stories” to get their mix of news, but having to work their way through the section source by source could mean they might miss those sources they only occasionally visit since they’ll now be down at the bottom of the navigation, instead of serendipitously mixed in with other articles from top sources.

That, however, will change in time. The company promises that the Cover Stories section will become more adaptive over time, and it will figure out how to throw “a few surprises” in there, too. It will also begin to group sections more topically, similar to how magazines like “The Weekend” are now being structured. But Flipboard isn’t prepared to go into much detail about those future changes because nothing is yet set in stone.

The new “Cover Stories” section is not going live immediately for all users, but will be a gradual rollout over the next week or two, the company says.

Today’s Patch layoffs are unfortunate, especially in the current media market. They are not, however, surprising. Patch wasn’t profitable, and despite AOL’s firm promises, never found a new path forward.

Disclosure: AOL, which owns TechCrunch and therefore signs my paychecks, retains a stake in Patch.

Today’s layoffs mark the second traunch of Patch’s slimming. Crash diet or not, Patch failed its key test: Profitability by the end of 2013. AOL was hellbent on stemming Patch’s losses by the end of the year, and as far as can be told externally, it failed, so Patch had to go one way or another.

Reporting indicates that AOL wasn’t too choosy about who picked up the money-losing property. Why does that mean layoffs are hardly surprising? Simply that you don’t buy a distressed asset in hopes of it continuing to lose money.

Whatever the value of Patch now, it had essentially zero in its prior form other than non-financial human capital. An asset that has negative cashflow is a liability, not something you buy and keep in its current form.

So Hale, the now majority owner of Patch, firing a chunk of the remaining staff isn’t much of a shock. Patch retains a certain revenue stream we can presume it wants to bank on, given that the network still holds an audience. But at its now prior size, that audience wasn’t enough to drive revenue sufficient to draw profits. And that’s the ball game. The old joke that the billion-dollar company that loses a dollar per year eventually dies is true.

It’s a shame that Patch is so ill. The ideal, idyll even, of building a network of local sites dedicated to local news and the goings and doings of small communities was, I think in moral terms, worth exploring. Was it worth a few hundred million dollars? AOL bet that it was. It appears now that the gist of Patch is past and the rift that it will leave is current.

Who will try hyperlocal next?

Top Image Credit: Flickr