Category: Tech news

An inexpensive introduction to the Internet of Things, the fully programmable Twine alerts you to all the changes and happenings inside your home.

An inexpensive introduction to the Internet of Things, the fully programmable Twine alerts you to all the changes and happenings inside your home.

Digital media company and ad sales platform Ziff Davis is expanding its network of properties even further with the purchase of NetShelter’s display advertising business, a well-placed source has informed us. The source couldn’t share exact terms of the deal, but did reveal that InPowered, the product that NetShelter has increasingly focused on (to the point that it largely rebranded itself under that name last November), will be split into two teams, with half heading to Ziff Davis as part of the arrangement.

NetShelter/inPowered is a digital advertising network that focuses solely on tech publications, including SlashGear, MacRumors, 9to5Mac, Crackberry, IntoMobile and many more. It claims over 150 million global readers reached, which adds a not-insignificant audience to the existing Ziff Davis portfolio. Ziff Davis counts a number of top tech sites among its own list of clients, including PCMag and Geek.com.

The deal makes sense for both companies, as NetShelter has been focused squarely on more of a content marketing play, which culminated in its launch of the InPowered product and later rebranding as the same. When Anthony covered that identity shift back in November, he noted that NetShelter CEO and co-founder Peyman Nilforoush believed that direct banner advertising was ultimately not the way forward for online ads, and that a means of surfacing so-called “earned” media, or positive reviews collected from independent sources, was much better for brands in the long run.

NetShelter/InPowered’s display ad business gave it ample reach from which to sell its next-generation vision of online advertising, but if the company is serious about focusing its efforts in that area, a sale to someone like Ziff Davis makes perfect sense, in terms of generating some capital for reinvesting in the new direction. Our source says that Ziff Davis will take over both publisher relationships as well as the display side of the business, with InPowered’s “expert word of mouth” model remaining with the original company.

We contacted NetShelter’s founders and the PR team for further information or confirmation on the news, but had not heard back as of press time.

Additional reporting by Anthony Ha.

Lets say you’ve come up with a brilliant idea for some shiny new piece of hardware. You brush up your coding chops, scratch out a design, and set out to build a prototype.

First, you’ll need a programmable chip to act as the brain. Because of the relatively gentle learning curve and friendly community, you go with the Arduino. The problem: your hardware idea requires WiFi.

Until now, that’s actually been a pretty complicated issue.

It’s not that Arduinos couldn’t do WiFi before — it’s just always been a bit of a pain. You had two main options, neither of them perfect:

• You could buy a WiFi shield. “Shields” are optional attachments built for the Arduino to give them more functionality, like sound playback/recording, ethernet, or WiFi. The downside here: WiFi shields are expensive (2-3x the cost of the Arduino itself), bulky, and often tough to find in a pinch.
• You could buy a “clone” board with WiFi built-in. Clones are unofficial Arduinos built by third parties. The problem there: if something went wrong, you’d have to hope someone in the community was familiar with whatever clone board you opted to use.

At this weekend’s Maker Faire, the company announced the Arduino Yún (with Yún being Chinese for “cloud” and English for “Yeah, most people are probably just going to type Yun without the fancy ú.”), the first official Arduino to come with WiFi functionality built-in out of the box.

At its core, the Yún is actually part traditional Arduino and part Linux system. The Arduino handles all of the functionality it traditionally would — running your code, reading from sensors, etc — while an itty-bitty Linux-powered chip acts as both a WiFi receiver and transmitter, handling all of the HTTP gruntwork needed to get your hardware project online. Plus: you can reprogram the Arduino Yún over WiFi, no USB cable required.

Lost in geek-speak here? Wondering what all of this means to you? Basically, one of the most popular platforms for DIY hardware projects has just made it a whole lot easier to get said projects connected to the Internet. Want a coffee maker that starts brewing 30 minutes before Google Calendar says you’ve got guests coming over? Sure, why not. Want an alarm that automatically donates money from your PayPal when you hit the snooze button? Totally doable.

Just this week, a project focused on building a high-quality, WiFi-enabled, Arduino-compatible board raised over $300,000 on Kickstarter. That’s over 30x their initial goal of $10,000, and they’ve still got nearly 2 weeks left. There’s definitely a lot of interest in such a thing.

The Yún should start shipping at the end of June, and will cost about $69. That’s about twice the cost of the WiFi-less Arduinos available today, but still significantly cheaper (and more compact) than buying both an Arduino and an add-on WiFi-shield.

While it was missing the skydiving antics of last year’s event, Google’s I/O keynote last week wasn’t short on product launches. In between the splashy updates to Google Maps, Search, Android and everything else Google announced, the company also briefly talked about Web Components for a few minutes. While Google’s Sundar Pichai noted that it’s still early days for this technology, he also said he believes that “the vision for it is clear” and that it will allow developers to build “elegant user interfaces that work across all form factors.”

Web Components are clearly a topic that’s close to the heart of a number of Chrome developers. Many of them, for example, cited it as one of the Chrome features they are most excited about at a fireside chat later in the week.

A number of Google engineers are also working on Project Polymer, which aims to write a web application framework that’s built upon the idea of Web Components and will allow developers to use the ideas behind Web Components on browsers that don’t even feature all of the necessary technologies yet.

The fact that it made an appearance during the keynote, right next to WebGL and other more established web development techniques, makes it pretty obvious that this is a technology that Google believes has the potential to change how developers write web apps going forward.

So what is this all about? Essentially, Web Components give developers an easier way to create web sites and recyclable widgets on these sites with the help of the HTML, CSS and JavaScript they already know. The ideas behind Web Components have been around for a while (and a few years back, Microsoft backed a similar initiative that never got any traction), but even today, this is still a topic that’s pretty foreign to most.

Building large, single-page web apps with a smart component models isn’t easy today. Web Components help developer encapsulate they HTML, CSS and JavaScript so it doesn’t interfere with the rest of the page and the page doesn’t interfere with it.

It’s worth noting that, for the time being, developers can’t rely on this to work in all browsers. Chrome Canary includes support for Web Components, but it’s hidden behind a number of flags. Mozilla will likely start adding support for it in Firefox soon, too. Most importantly, though, the Polymer project aims to bring the concept to all browsers with the help of a polyfill.

Web Components relies on four pieces – the template element, decorators (which apply templates to CSS), custom elements (which allow developers to create their own elements) and the Shadow DOM (which sounds ominous, but which really just defines how all of the other pieces play together and shield the other three pieces from the regular DOM if necessary).

Putting all of this together, including Custom Elements, developers can suddenly create their own HTML tags like after creating them using the tag. they can also extend existing elements. In addition, Web Components also allow developers to more easily separate content from presentation and the Shadow DOM ensures that the styles you create for the rest of your site don’t interfere with the widgets you build using Web Components.

All of this sounds pretty dry, but if it catches on – and there is no reason to think it won’t – this will change how developers write web apps (Google’s Eric Bidelman calls it a “tectonic shift for web development”) and there are some inherent advantages to Web Components that will also help it speed up the web browsing experience for users. In the end, though, this represents a completely new way for writing web applications and it will probably take a bit before the repercussions of this evolutions fully sink in.

If you want to take a deeper dive into this topic, take a look at this presentation here.

Joshua Pearce, PhD, is a researcher at Michigan Tech who rearches open source and low-impact solutions to engineering problems. He is also the founder of the Printers For Peace contest, an effort to bring together clever 3D-printed ideas that have loftier aims. You can win one of two 3D printers if you submit a winning project.

We asked Pearce a few questions about his goals for the project and about the future of 3D printing.

John Biggs: Why Printers For Peace?

Joshua Pearce: I think it is clear that low-cost open-source 3D printing has enormous potential to do real good for the world – particularly for the poor as it radically reduces the cost of high-value products like scientific tools and consumer goods. This threatens a lot of entrenched interests because the average Joe can fabricate extremely complex products at home for pennies, which is disruptive to say the least. I have noticed a clear bias in 3D printing news coverage – any advances on the low-end of the spectrum are generally ignored or vilified. The media frenzy about 3D printed guns is actually having terrifying consequences – and I don’t mean the guns. A California senator has already proposed registration, background checks, and licensing for 3D printers!

Michigan Tech and Type A Machines sponsored the contest to get the more positive truth about 3D printers into the conversation. There are over 90,000 open-source 3D printable designs available and only one low-quality gun. We do not want to lose the baby with the bathwater. Our aim is to raise awareness of the power of 3D printing to change the world for the better.

JB: What do you think will happen now that the 3D printed gun is out of the bag? It was inevitable, obviously, but what does it mean?
JP: The 3D printed gun is a red herring. Anyone who wants a gun can make a much better one using more traditional tools found in any machine shop and many garages — or just buy one. I am, however, very concerned that the debate about 3D printed guns will be used to squash the incredible technological development we are seeing in the open-source 3D printing community.

JB: What’s the coolest Printers for Peace project you’ve seen so far?

JP: The contest just opened, but there are some really cool designs already developed that I think would make good starting points for derivatives. I really like some of the small-scale 3D printed windmill designs – and there is a graduate student working on what looks to be a printable recyclebot. I would love to see a reliable 3D printed treadle pump as this is one of the most successful appropriate technologies for lifting rural farmers out of poverty in the developing world.

JB: What’s next? 3D printed bazookas? 3D printed heart stents? Where do you see this headed, in either direction?

JP: I think it is clear that existing manufacturers will continue to move from using high-end 3D printing for rapid prototyping into actual manufacturing creating entirely new classes of jobs (e.g. automobile parts, human body parts, etc.). This is exciting, but not nearly as exciting as what is happening on the low-end of the spectrum. As open-source 3D printable designs continue to grow exponentially the value of owning a 3D printer is climbing as their quality improves and actual costs continue to decline. Thus, low-cost open-source 3D printers will become ubiquitous household items, which people use to make a wide array of consumer goods, replacement parts, and highly customized products. Following shortly after I hope to see recyclebots become similarly widespread – with people recycling their waste plastic inhome to make their own products. The implications for improving human well-being are staggering.

There’s plenty of buzz about the concept of making our cities “smarter” — that is, loading them up with sensors and data-driven services to improve efficiency and quality of life. Hell, even Google has taken to loading up its event venues with scores of sensors.

Most of the discussion out there deals with how local governments are working toward this lofty, nebulous goal, but a team called Acrobotics Industries is trying to put the onus on the citizens. To that end the team has kicked off a $50,000 Kickstarter campaign for a small sensor array called the Smart Citizen kit in hopes that people will start collecting and sharing their environmental data with the world.

“There’s a problem with the way current cities were built,” Acrobotic’s COO Francisco Zabala told me. “Beijing’s air quality is insanely bad — we think we have it bad in L.A. — and it’s not getting any better.

The heart (or brain, I guess) of the Smart Citizen project is an Arduino-powered kit that gets tucked away inside (or outside, if you’ve got the right kind of enclosure) of a user’s home to track local environmental variables — think temperature, humidity, air composition, ambient brightness, and sound levels. It’s arguably neat enough to keep tabs on the environmental conditions at your home while you’re not there, but the real value here is when a host of users set up their Smart Citizen sensors and fire up them up en masse.

It’s the team’s hope that Smart Citizen kits will sell widely enough that regular people will be able to get an accurate glance at environmental conditions with a finer sort of granularity than you’d get by firing up, say, the Weather Channel app. For what it’s worth, Zabala concedes that the Smart Citizen project is largely geared toward making people aware of climate change and global warming without getting too political or divisive about it.

“I believe that climate is changing for the worse, but our approach is more personal,” Zabala said. “By raising awareness we’re working toward a solution without banging on people’s heads.”

As it happens, a few of those Smart Citizen kits have already been fired up. A quick look at a demo version of the sensor-tracking website reveals that a handful of the little things are live in Zabala’s native Barcelona — the Smart Citizen team ran an earlier, more local crowdfunding campaign (Zabala called it a “proof of concept run”) that saw a number of users in Spain install and fire up their sensor arrays all around the city. Hovering over a bright blue spot displays the latest environmental data (users can define how often they want those updates to occur), while greyed out units haven’t been fired up lately.

Thanks to how the Smart Citizen kit is constructed, users will eventually be able to monitor more than just the environmental criteria this early kit supports. Zabala said that the Acrobotics team is currently working on swappable daughterboards that will allow the Smart Citizen kit to be used for soil and water testing, too — perfect for you city-dwelling gardeners. If you’re suddenly itching to monitor your surroundings more acutely, you’ll be able to lay claim to a fully constructed Smart Citizen for $155 — the more handy among you can save a little money by springing for the $105 unassembled kit instead.

An upcoming update will bring a web browser, email and update store app to Barnes & Noble’s super affordable Nook Simple Touch line of e-readers, which will begin rolling out June 1 according to a source close to the matter who wishes to remain anonymous. The 1.5.0 update was created in response to the positive critical and customer response to the recent Nook tablet update that brought Google Play to B&N’s Android-powered devices.

The Nook Simple Touch and Simple Touch with Glowlight will be receiving the over-the-air update starting next month, marking the first time that Nook’s entry-level readers get official access to web browsing capabilities. Amazon’s competing Kindle devices have shipped with an “experimental” web browser since the Kindle 2, but have not offered an email client on anything except for the Kindle Fire tablets.

Making Nook hardware a little more flexible for users is a good way for Barnes & Noble to help counter flagging sales of dedicated Nook hardware, which were shown to be weak in recent quarterly results. Nook weakness probably ended up prompting the bookseller to offer promotional giveaways with on-hand inventory.

When B&N announced that Google Play would be coming to Nook tablets, I praised the decision as a key step in helping the company position them as affordable, fully featured Android tablets, as opposed to just glorified e-readers that could do a bit more than most. The Nook Simple Touch is still pretty focused on e-books, but as an email triage device and basic browser, especially for text heavy content, it probably becomes a lot more attractive to an audience that mostly wants books but would like a little more general-use value as well. Especially for older buyers, I imagine a simplified device with a cheap price tag has the potential to carry appeal over a much more expensive full-fledged tablet.

Will a browser and email client be enough to right the Nook ship? Probably not on their own, but B&N is at least expending effort in the right direction to combat flagging consumer interest in dedicated e-reader devices.

Sometimes, more medical information is a bad thing. The influential United States Preventive Services Task Force recommends against most women getting genetic screenings for their susceptibility to breast cancer. Why? Because the tests are imperfect: for every woman who gets tested for genes associated with onset breast cancer, even more will falsely test positive, leading spooked patients into needless surgery or psychological trauma. Super cheap genetic testing from enterprising health startups, such as 23andMe, have complicated cancer detection for us all by increasing the accessibility of imperfect medical information.

After discovering a mutated BRCA1 gene, known to increase the likelihood of breast cancer 60 to 80 percent, actress Angelina Jolie underwent a radical preventive double mastectomy. Her brave confession in the New York Times brought much needed attention to breast cancer awareness, but it’s dangerous in the hands of a statistically illiterate population.

For instance, as New York Times statistical guru, Nate Silver, once reminded me, while breast cancer mammograms are 75 percent accurate, a woman who tests positive only has about a 10 percent chance of actually getting cancer. Since the vast majority of women don’t have cancer, there are far more women who will falsely test positive (here is a helpful blog post with the numbers worked out). Most importantly, surveys reveal that many people don’t understand the math behind false positives in cancer testing, and may make uninformed decisions as a result.

The same math holds true for the mutated BRCA1/2 gene of Jolie’s confession: researchers estimate that a tiny 0.11 to 0.12 of women have the faulty gene. “I believe in doing genetic testing for BRCA1/2 with appropriate counseling,” writes University of Southern California’s David Agus, one of Steve Jobs’ cancer doctors. The answers are not simple in this case and require experienced professionals to discuss with the patient.”

Traditionally hundreds of thousands of dollars to test, a cottage industry of cheap genetic testing has sprung up. 23andMe, one of the most popular, offers the service for as little at $99, and has even dared to weigh in on the BRCA controversy on the company blog.

Citing a new study that found no negative emotional consequences from patients after learning about their BRCA1 mutation, 23andMe concludes, “The findings are important given that a frequent criticism of direct-to-consumer testing is based on the assumption that it causes either serious emotional distress or triggers deleterious actions on the part of consumers.”

Given the absence of evidence for serious emotional distress or inappropriate actions in this subset of mutation-positive customers who agreed to be interviewed for this study, “broader screening of Ashkenazi Jewish women for these three BRCA mutations should be considered.”

Sometimes, however, voluntary surveys don’t tell the whole story. In its cover story on Jolie’s decision, TIME magazine recounts the tale of one woman who likely had unnecessary preventative surgery after learning about a genetic defect. “She freaked out and had a bilateral mastectomy,” said Otis Brawley, chief medical officer for the American Cancer Society, who worried that this patient’s particular mutation was not as troubling as she worried it was.

Interestingly, TIME’s author, Kate Pickart, argues the financial costs of genetic testing has stall mass run on genetic tests. Even a new provision under the Affordable Care Act (a.k.a. Obamacare) only mandates 100 percent insurance coverage for patients with a family history of genetic flaws.

But, at just $99 (and probably far less in the future), financial barriers are crumbling. This isn’t to say that genetic screening is bad, it just complicates things for the rest of us, especially those who don’t understand statistics. The more women get tested, the more false positives exist, the less confident patients and physicians become in a course of action.

Maybe our only hope out of this cheaper testing spiral is technology that makes detection more accurate and more predictive. One promising solution is a new bra that constantly monitors deep tissue for cancerous signs (below).

So, perhaps, before long, we will innovate our way out of this dilemma.

Android UX and interaction design leads Helena Roeber and Rachel Garb gave a talk at Google I/O this year about the Android Design Principles (ADP) they helped create and introduced back in 2012 with the launch of Android 4.0 Ice Cream Sandwich. The ADP foll three simple principles, essentially “enchat, simplify and amaze,” but there’s much more to those principles that that relatively slippery and non-scientific language might lead you to believe.

In fact, Garb and Roeber have based the ADP on compelling recent research that suggests eliciting negative emotional responses have an outsized effect on user experience, and require lots more counterbalance in terms of positive experiences to achieve a net positive, or even net zero lasting impression.

The Math Of Joy

They cited a John Gottman study that found successful marriages maintain around a 5:1 ration of pleasant feelings to bad, whereas those with more like a 1:1 ration have a far greater chance of ending in divorce. Another study they cited offers insight into team productivity, which suggests that positive-to-negative interactions in a work group setting operating in at least a 3:1 ratio result in much more productive teams than those with more negative experiences. Finally, they suggested that humans need three positive experiences to compensate for every bad one.

A lot of that may sound obvious when simplified; it doesn’t take a genius to figure out that designers and app builders should strive to please their audiences. But the execution of enacting that pleasure is where things get interesting, and where Roeber and Garb’s insight really shone through. It’s one thing to say “okay, we won’t anger a user here, and we’ll make them happy instead,” and quite another to actually do it.

Putting Theory Into Action

Hearing them describe it, the ADP almost came about under a sort of moral obligation. Roeber described how the teams in charge of Android UX and interaction found that tech now has “a profound impact” on all of our lives, and as such, when things go wrong, we have a tendency to blame ourselves, and that can have a subtle but ultimately strong impact on people’s wellbeing.

“All those non-ideal implementations eroded people’s confidence in their own abilities and caused frustration,” she said, describing how even small things that you might not think that much about ultimately leave you with a tick in the negative column if left unresolved. So if you can’t figure out what you’ve done wrong in setting up Gmail on your phone, for instance, that’s something you’ll carry, and something that requires that much more to negate in terms of the overall karmic balancing act.

The example offered by the presenters of how exactly this works in action in Android right now is the visual signal given for when you’ve hit the last of your home screens. Android users will know that you’re greated with a blue glow animation and a visual representation of a page turning up to suggested nothing underneath. It’s clear in what it indicates, but it’s less accusatory or finger-pointing than a text alert, Roeber explained, which can still make users feel admonished and leave them internalizing some blame.

Another example meant to explain how interface elements can not only minimize or eliminate bad feelings, but actually generate good ones was the Google Now art which occupies the search box when you call up Android’s digital personal assistant. It changes based on both location and time of day, and Roeber and Garb explained that in testing, the produced a reaction of wonder and enjoyment not just the first time it was encountered by users in testing, but every time after that as well, thanks to its dynamic nature. Experiences like this rack up positive emotions on the part of the user.

The Interface As The Ultimate Customer Service Rep

Essentially, what Roeber and Garb described in their chat is a means of combining the best possible way of tiptoeing around a potentially negative interaction with positive ones that excite and delight. It’s a simple calculus designed to result in an overwhelmingly net positive experience, the ultimate aim of which isn’t just to minimize the negative impact of the tech we now use constantly, but also to add points in the wins column that can be used to offset negative interactions that happen anywhere in our lives. The ADP isn’t conceived as a way to make using apps not suck, in other words; it’s actually designed to turn Android into a means of spreading happiness.

That’s an ambitious goal, but it’s impossible to deny that the experience of using Android on a daily basis has improved dramatically since the introduction of the ADP. And all of these improvements serve to illustrate how mobile software is perhaps at its best when it’s acting as the idealized customer service representative: friendly and informal, but not overly familiar; attentive to and anticipatory of your needs; gentle and kind when you’re barking up the wrong tree. A truly great customer service experience leaves you feeling lifted, capable, intelligent and happy. It’s more than fair to expect the same out of our device interactions.

Editor’s Note: Semil Shah is a contributor to TechCrunch. You can follow him on Twitter at @semil.

Apple has a good deal of cash. And, in the Valley, the startup ecosystem — for many reasons — wants to see Apple spend that cash. As their cash pile continued to grow as their stock price and market cap soared, Apple’s inability to provide robust software services combined with opportunities to expand their reach through acquisitions has become a fancy parlor game which includes every stripe of public and private investor imaginable. On top of this, pumping even a small percentage of cash pile into acquisitions could provide another pool of much-needed liquidity for founders and investors alike. While it all makes sense on paper, part of what makes Apple “Apple” is that they operate how they want to — not how the market wants them to. Recently, in response to a variety of pressures to do something, to do anything, Apple announced a two-part share buyback. There are many explanations for this financial strategy, and while the Valley may have their own armchair financial analysts with a Twitter account, I reached out to some friends who actually work in technology banking or at techonology-focused hedge funds and asked them to send me a paragraph on their perception of the move. Because of the world these folks work in, I’ve reproduced their answers below anonymously, as they are not permitted to publicly share their opinions on such matters:

Technology Investment Banker: With the amount of cash stock piled by Apple, and mainly overseas, it was only a matter of time until the water would break, especially with activist investor David Einhorn ruffling feathers. Apple did something very standard and not uncommon, but on a large scale the way Apple likes to do things. At the end of the day I feel Apple’s actions represent the following four points: (1) Increased Shareholder Value: There are many ways to value a profitable company but the most common measurement is Earnings Per Share (EPS). If earnings are flat but the number of outstanding shares decreases. . Voila! . . A magical increase in period-to-period EPS will result; (2) Higher Stock Prices: An increase in EPS will often alert investors that a stock is undervalued or has the potential for increasing in value. The most common result is an increase in demand and an upward movement in the price of a stock; (3) Increased Float – As the number of outstanding shares decreases, the shares remaining represent a larger percentage of the float. If demand increases and there is less supply, then fuel is added to a potential upward movement in the price of a stock; and (4) Excess Cash: Companies usually buy back their stock with excess cash. If a company has excess cash, then at a minimum you can bank that it doesn’t have a cash flow problem. More importantly, it signals that executives feel that cash re-invested in the corporation will get a better return than alternative investments. This is definitely a positive sign for the company going forward. Customers and investors should feel confident with these events transpiring that Apple will continue to deliver value to both parties respectively.

Technology Hedge Fund Principal: Since Apple has around $150B cash on the books (70% of which is foreign), it’s clear they need to do something with this cash because it’s just wasted sitting on the balance sheet earning low interest rates. People have assumed the market would respond well to Apple making acquisitions, especially in software and services, particularly in cloud and mobile software. While they have reaped the benefits of profits in mobile hardware, the value going forward is at the application and services layer. Other hardware manufacturers are catching up, if they haven’t caught up already. Unfortunately, Apple doesn’t seem to have an appetite for these types of acquisitions. Another option is to buy back shares, a proven way to deploy cash, though doing so sends a signal that they are a mature (read: not growth) company. Tactically, buybacks can decouple EPS growth from new product lines, and Apple could see 2x its buyback investment in earnings growth as a result. Ultimately, Apple has withstood significant pressure from the investment community to do something with the cash, especially as growth has slowed. (Venture arms, since you asked, are not an effective use of capital for a corporate player; I see the share repurchase as a much more responsible use of proceeds.

Hedge Fund Partner #2: Apple had four basic choices of what to do with their cash, remembering that apple has a duty to its shareholders: (1)  Do nothing (status quo), which makes zero sense. given that they have ~$145Bn in cash and are adding ~ $40Bn in cash annually assuming zero growth earnings earning; (2) Strategic acquisition or expansion, though Apple will be hard pushed to effectively put either their cash hoard or future cash flows to use to do this; (3) a one-time special dividend and increased annual dividend; or (4) a share buyback (or various form of it). Only options #3 or #4 made any sense to me and I assumed it was only a matter of time before they did something. #1 is out as they are would not be meeting their shareholder responsibility and #2 is out simply because of scale.

I see the share buyback as positive for three key reasons: (1) Apple stock is currently very cheap. My back of the envelope calculations conservatively value them at $500-$550/share, so they are effectively leveraging and creating additional shareholder value here until the multiple recovers to fair value. What’s more is that management knows a lot more than what we all do, so they should be able to calculate their own value in two to three years fairly well, and I assume they saw this as a positive. (2) Because Apple issued bonds to finance the deal rather than using cash, this way they will not need to repatriate taxable offshore cash to perform the buyback and they will likely get a bond rate the crazy low prices. Bottom line, they are saving shareholders cash, although at some point they will need to find a way to address the offshore cash, so perhaps they are waiting for another tax holiday. And (3), assuming the market reacts rationally, a buy back signals that managements believes in stock and the story and believes that this will generate returns that will outperform for long-term investors, something that a cash hoard did not address at any level and effectively generate returns far in excess of what could be achieved in any other safe manner.

More often than not I do not like share buybacks. often management does this to boost their own salary bonuses (EPS biased etc) or simply follow bad advice and follow the investment banking herd, but this time I liked Apple’s share buyback at this share price and multiple and applaud the debt financing way of doing it, I would have applauded it more if they had also issued a $40 special dividend.

Hedge Fund Partner #3: The view is Apple has stopped being an innovator. While they were at the forefront of technology, people bugged them to use their cash for a dividend or buyback and they could say “no” because the stock price was going up on leading edge innovation. Once Jobs passed away, Tim Cook hasn’t been able to keep that going, and if anything they are now playing catch-up to Samsung or even Google. When you aren’t innovating and you have $150B in cash, a board has to find ways to keep investors happy and one tactic is to conduct a massive buyback. Showing they are returning money to shareholders, creating a new base if “capital return” investors rather than growth investors. It’s all a game to prop up the stock price, money is cheap because of Bernanke, so it’s an easy way for them to please shareholders without much cost to the business. In general, I think that Apple is falling behind and trying to figure out how to regain their lead, and I’m not sure if its possible any time soon.

Technology Stock Investor: They’re doing the buyback because: 1) they have an unprecedented amount of cash ($140+ billion) that’s earning nearly nothing; 2) the stock is down nearly 40% from its high and shareholders are angry; 3) the stock is cheap on every financial metric, signaling that buying shares is a good use of cash if you believe in the long-term growth of the company.  The company does not appear to want to do a large acquisition or massively increase its capital expenditures.  They don’t “need” to hold that much cash. So the company had a very inefficient capital structure ($140+ billion of cash and no debt). Equity investors (who, in the end, own the company) sooner or later demand to get returns on their companies’ cash. Capital markets are competitive, and if management doesn’t give investors great reasons to own their stock, investors will go somewhere else. AAPL is facing slowing revenue growth, margin pressure, and uncertainty about their next major product line. A management team that is perceived as unfriendly to shareholders is another reason for investors to sell the stock. The buyback is a big gesture by management that they understand their shareholders’ concerns, in addition to likely being a good investment.

Photo Credit: Eddi 07 / Flickr Creative Commons

The Wall Street Journal is now reporting that the rumored $1.1 billion cash acquisition deal for social blogging site Tumblr has been approved by Yahoo’s board of directors. The Tumblr acquisition was rumored last week, with a price tag reportedly north of $1 billion, which appears to be accurate if the WSJ’s sources are correct.

Tumblr would continue to be run as a separate business and independent property, the WSJ’s sources said, and we could see an official announcement as soon as Monday from one or both of the companies. Yahoo CEO Marissa Mayor become interested in the site only a couple months ago, but sees the Tumblr purchase as a way to big inroads into social media and boost revenue growth, according to one of the anonymous people who spoke to the WSJ. Yahoo already has an event scheduled for Monday in NYC, and the WSJ has learned it will deal with Flickr, something which we’ve also heard separately. The Tumblr deal might not have been on the docket initially, but if it’s all approved it’s highly likely we’ll see it mentioned tomorrow, too.

Recently, we’ve seen suggestions that there’s a vacuum developing at the top of Yahoo’s executive ladder, and there have been rumors recently of key people departing from the mobile team. It’s interesting that a lot of these departures are fairly recent, and could go some way to explaining why Tumblr may have been willing to accept the $1.1 billion offer when sources have told TechCrunch that the amount was seen as “too low” by some within the company. Our sources also suggested that Tumblr may be looking at a fast-depleting cash pile, which again gives it good reason to sell.

Some users on Twitter are threatening to depart Tumblr if the Yahoo deal goes through, as Ingrid reported on Saturday. Overall, as she noted, visitor growth to the site appears to be flat or declining slightly in 2013, so combined, those two facts might not bode well for Tumblr’s future user acquisition. But Instagram also faced an outcry of vocal users claiming they were going to shut down their accounts and depart the service for good when Facebook bought that company. In fact, users, engagement and reach for brands using Instagram have all gone up considerably since the acquisition.

Yahoo has been snapping up companies at a rapid pace this year, with what seems like new acquisitions every week over the past few months. One of the more high-profile purchases was the Summly buy, which brought the news summary startup into the Yahoo fold for a reported price of around $30 million. The company’s 17-year old founder arguably made more headlines than the company itself, and many debated the merits of the acquisition.

More recently, the companies on Yahoo’s shopping list have been more under the radar, and in general the pattern looks like a strategic hiring spree, rather than a bunch of additions to Yahoo’s product portfolio. Tumblr would likely buck this trend, as it has a massive built-in audience, a full-featured, mature product and targets a relatively young demographic that so far isn’t all that well-represented at Yahoo. There’s a certain amount of “cool” that’s attached to Tumblr, and Yahoo is desperate for exactly that.

The deal size is raising some eyebrows, since, as Fortune’s Dan Primack tweeted, Yahoo had only $1.2 billion cash on hand as of its most recent quarterly earnings, which makes an all-cash offer for Tumblr a lot more of a stretch than it would be for someone like Apple, or even Facebook, which acquired Instagram for $1 billion in a mix of both cash and stock. Yahoo’s purchase of Tumblr, if the terms are correct, is a strong indicator of just how badly it wants to expand into media-based social networking.

As of 3/31 Yahoo had just under $1.2b of actual cash on hand. And deal is $1.1b cash? Time to liquify that $1.8b of "short-term investments"—
  (@danprimack) May 19, 2013

We’ve contacted both Yahoo and Tumblr for comment, and so far have only received a boilerplate “We don’t comment on rumors or speculation” from Yahoo. If Tumblr gets back to us, we’ll update this piece.

Editor’s note: Glenn Solomon  is a partner with GGV Capital. Some of his recent investments include Pandora, Successfactors, Isilon, Domo, Square, Zendesk, Quinstreet, and Nimble Storage. He blogs regularly at www.goinglongblog.com, where the focus is on growth stage entrepreneurs who are thinking big. Follow him on Twitter @glennsolomon.

Stanford-born and Seattle-based Tableau Software (DATA) enjoyed a tremendous debut on the public markets on Friday, closing on its first day of trading at over $50/share, up over 60 percent from its $31/share IPO price. The company raised over $250 million through the sale of approximately 14 percent of the company, and its enterprise value now sits at approximately $2.5 billion.

For the pundits who’ve been arguing that the tech IPO landscape is in crisis, deals like Tableau serve as a powerful reminder that the public market is eager for certain tech companies. In fact, over the past year or so, there have been several other high-profile tech IPO winners, such as Workday, Splunk, Palo Alto Networks and ServiceNow.

What lessons can aspiring tech entrepreneurs learn from Tableau and these other Wall Street success stories? Here are few.

Stand Out In The Crowd

Tableau has built a highly attractive business. Growth has been very strong – March quarter revenue growth was over 60 percent, to $40 million. The company is operating in a huge and proven market: The data analytics and visualization space has produced big winners across several software generations and remains interesting, as big data pushes the limits of existing solutions. Finally, Tableau has been able to show profits, albeit modest, as the company has grown rapidly. For all these reasons, public investors flocked to Tableau.

If you’re considering an IPO for your company in the future, recognize that public fund managers have many companies from which to choose. More specifically, small-cap growth managers have between 500-1,000 companies in their universe. Given the enormity of this number, a typical manager will only follow 50-100 companies closely and, depending on strategy, will likely only invest in 25-50 of these in any one year.

Tableau stands out in this sea of stock tickers. Does your company stand out? If not, what investments do you need to make to help you rise above the noise?

Price Your Company Right

Cynics will suggest that Tableau left money on the table. Since the stock popped over 60 percent on the first day of trading, the company clearly could have set its IPO price higher and raised more money. This misses the point.

Tableau recognized that its IPO is a chance to establish a new shareholder base. By pricing the IPO at $31, the company surely had its pick of new investors since most everyone, seeing the obvious good deal, wanted to get in. I’m sure Tableau’s management team spent time evaluating who was most likely to hold their IPO stock and add to their ownership over time. If the company has done its job well, Tableau has stacked its shareholder list with the best, long-term oriented fund managers. This will serve the company well for years to come.

You should spend time getting to know potential VC investors before you take money into your company. Consider prioritizing things like alignment of outlook and ability to help add value ahead of price. Taking the highest price limits dilution in the short-term, but if you add a VC who either can’t help or has a different vision than you for your company, you’ll likely regret the decision down the road.

Patience Is An IPO Virtue

Tableau deferred its IPO for several quarters. In fact, had it used a $100 million in revenue run rate as a threshold for IPO timing, as many others do, the company would have now been public for over a year. Because Tableau waited longer, the company was able to continue to invest in its business. With more time and investment likely came increased visibility and predictability, which is critical to performing as a public company.

Also, Tableau has become more valuable during the past year, as it has grown and solidified its leadership position in the market. With a higher valuation, Tableau’s IPO brought in more money and established a larger public float than would have been possible a year ago. Public fund managers dislike small, or “thin,” float deals; such thin float IPOs often lead to more stock volatility, which is difficult to manage. As you build your company for IPO readiness, consider waiting until you have predictability well under control and your valuation allows you to sell a larger amount of stock without taking more than 15-20 percent of dilution.

Clearly Tableau is a remarkable company. Emulating these three traits will help you succeed, as well.

Retooling the traditional public library for a more technically savvy populace is no small feat, especially when library budgets across the U.S. have been gutted these past few years.

That sad state of events has forced some libraries to take matters into their own hands. Consider the case of the Northlake Public Library in Northlake, Illinois — it wants to give its community (and especially the town’s children) access to a slew of new digital creation tools to help inspire the next generation of makers and artists, and it’s decided to turn to Indiegogo in hopes of making it happen.

All told, Northlake trustee Tom Mukite is looking to raise $30,000 to outfit the library with an iMac, a drawing tablet, a Wacom Cintiq display, a fancy lightbox, and (perhaps most tantalizing) a 3D printer for youngsters and local makers to feed their projects to.

In a bid to attract younger would-be readers, Mukite says the staff is also planning to use the funding to expand the library’s cache of graphic novels — there’s been plenty of debate about the value of these highly visual tomes as motivators for childhood and adolescent literacy, but the folks in Northlake firmly believe that they’ll help get reluctant readers devouring content as well as help improve language skills for non-native English speakers.

Oh, and then there’s the pièce de résistance — a nine foot tall statue of Dr. Bruce Banner’s green alter-ego hulking out, again meant to attract the kiddies. I’ll admit I don’t really get that part, but then again I was the sort of kid who needed to be carefully coaxed out from among the stacks anyway.

It’s not exactly the first time we’ve seen the crowdfunding model applied to spreading literacy — Cassandra Elton and a group of fellow University of Iowa students used Indiegogo to turn a wild-eyed idea into the roving Antelope Lending Library earlier this year even though they missed their funding goal by some $7,000. Northlake’s creation-friendly angle is an intriguing one — I can’t think of any child who wouldn’t like to see their doodles converted into a real-life action figure, and hooking these kids on the joys of making things could help inspire a new generation of designers, entrepreneurs, and engineers.

[Image via the Metropolitan Library System]

Google is under fire in the UK for its tax practices in the country, and a new key witness (who spoke to The Sunday Times) might put them in deeper hot water when he hands over a reported 100,000 emails and documents to the British Revenue & Customs (HRMC) services. Barney Jones, a former Googler who was at the company between 2004 and 2006, says he has material proof that Google’s London sales staff which would negotiate and close sales for the UK market, despite claiming its Dublin HQ handled finalizing all deals.

Jones was prompted to speak out by testimony given to the Commons Public Accounts Committee (PAC) last week by Google VP Matt Brittin, who said that London-based Google staff were never closing any ad sales deals, though some selling efforts were made there. Brittin had previously gone on record in November 2012 with statements asserting that no one in the London office was doing any kind of ad selling.

The matter of where the deals were finalized is especially important because if a sale closes in London, it’s likely they’d be taxable in Britain, rather than in the extremely low tax-rated Ireland. Jones told the Sunday Times that Google is fully aware of this, yet there are still records of Google staff closing major deals from companies like eBay and Lloyds TSB, but Google doesn’t seem at all certain that any of the documentation will absolutely prove that it has done anything strictly against UK tax law, according to a statement provided by Google Direct of External Relations Peter Barron to the Sunday Times.

“As we said in front of the public accounts committee, it is difficult to respond fully to documents we have not seen,” the statement reads. “These questions relate to Google’s business in the UK going back a decade or more. None of the allegations put to us change the fact that Google pays the corporate tax due on its UK activities and complies fully with UK law.” Google reiterated this statement to TechCrunch when we contacted them for comment.

Ireland uses its lower corporate taxation rate, which is 12.5 percent, or a little over half of Britain’s 23 percent, to attract big names who base their European corporate headquarters there, including Apple and Facebook in addition to Google. The search giant is currently under fire from UK parliament members for its tax practices, thanks to a Reuters investigation that revealed statements it made last November to the PAC about its London operations may not have been entirely accurate.

Amazon is next in the PAC’s sights for its UK tax practices, as Reuters has also recently uncovered evidence to suggest that it, too, is doing a lot of selling through an autonomous London-based unit, despite routing its sales on paper through a tax-exempt affiliate based in Luxembourg. In fact, for most on Google’s footing, avoiding taxes seems to be the exception, not the rule, and a recent piece by V3′s Madeline Bennett explains that even if this fresh round of hearings reveals that these schemes do run afoul of UK tax regulations, it’s unlikely we’ll see situations change all that dramatically. Governments are too dependent on the general economic benefits of hosting big corporations, and get too much out of awarding them contracts, she says, to risk doing long-term harm to those arrangements.

Still, what Jones claims to have would be incredibly embarrassing for Google, especially if it spells out in no uncertain terms that closing deals was regularly handled by Google’s London staff, in direct contradiction to what Brittin has told the committee, but until we see the goods, there’s no telling how deep down the rabbit hole his information actually goes.