NEW YORK - Facebook (
NASDAQ:FB,
Forum) surpassed expectations on all fronts in the second quarter, growing not just profit and revenue but its already-massive user base, mobile advertising and usage of its “family” of non-Facebook apps like Instagram and WhatsApp.
Even so, its stock price fell after the results came out, as some investors may have been looking for even better results, or they may be simply cashing in on some profits as Facebook's shares have been trading near record highs. Spending also soared in the April-June period, as Facebook had promised it would.
The world's largest online social network said Wednesday that it had 1.31 billion people monthly mobile users as of June 30, up 23 per cent from a year earlier. It reached 1.49 billion monthly users, up 13 per cent from a year earlier. Facebook also had 968 million daily active users overall and 844 million on mobile devices.
“Once again Facebook has proven its ability to attract and retain users. It's particularly impressive that users are more engaged than ever before - that the percentage of monthly users who visit every day continues to grow,” said Forrester Research analyst Nate Elliott.
That's in contrast to Twitter, which continues to worry investors with stalling user growth.
Facebook's mobile advertising represented 76 per cent of the total advertising revenue during the April-June period, proof that the company continues to attract advertisers to where its users are - on smartphones and other hand-held gadgets. That's up from 62 per cent a year earlier.
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NEW YORK - Tepid user growth and ongoing uncertainty about its leadership dragged Twitter's (
NYSE:TWTR,
Forum) stock to its lowest level in over a year Wednesday, even though the short-messaging service reported sharply quarterly higher revenue.
Twitter is “not satisfied” with its user growth, co-founder Jack Dorsey, who replaced Dick Costolo as CEO earlier this month, said Tuesday after the earnings report. But that's unlikely to change any time soon.
Twitter doesn't expect to see “sustained, meaningful growth” of its number of users until it reaches the mass market, said Chief Financial Officer Anthony Noto. This, he said, will take considerable time.
While the company is planning to boost its marketing efforts to lure in new users, Noto also acknowledged that the site remains too difficult to use for many people.
On average, Twitter had 316 million monthly active users in the second quarter, up less than 3 per cent from the previous three months.
“Stagnant user growth suggests Twitter is still trying to find its place in the social media food chain,” said Colin Sebastian, an analyst at Baird Equity Research, in a note to investors.
While Twitter's quarterly results easily surpassed Wall Street's expectations, the analyst said the company's potential “remains in question due to the perceived 'niche' adoption when compared to other social media peers” such as Facebook with its nearly 1.5 billion monthly users, or Snapchat with its 100 million daily users.
Nonetheless, Cantor Fitzgerald analyst Youssef Squali said Twitter's long-term potential remains intact, helped by its unique offering as “the largest real-time broadcasting platform” as well as its “growing level of monetization.”
The San Francisco-based company's stock fell $5.08, or 14 per cent, to $31.46 in afternoon trading on Wednesday, hitting its lowest levels since May 2014. The stock is down 12 per cent since the beginning of the year. In comparison, the Standard & Poor's 500 index is up 2.4 per cent year to date.
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SAN FRANCISCO - Microsoft (
NASDAQ:MSFT,
Forum) debuted its new Windows 10 operating system Wednesday, in what the company hopes will be a pivotal moment in its bid regain its sway in a world where the PC is no longer king.
The first people to get the new software Wednesday included about 5 million “insiders,” or tech enthusiasts who previously enrolled in an early preview program. Microsoft is counting on tens or even hundreds of millions more to download its latest release for free in coming months.
Others will get the software when they buy a new PC. While some new models equipped with Windows 10 are available in stores this week, more will hit the market this fall. Microsoft and major PC makers are planning a global ad campaign that will extend into the crucial holiday shopping season.
Although Windows 10 is coming to PCs and tablets first, it's also designed to run phones, game consoles and even holographic headsets. It has new features, a streamlined Web browser called Edge and a desktop version of Cortana, the online assistant that is Microsoft's answer to Google Now and Apple's Siri.
Still, the company insists Windows 10 will seem familiar to users of Windows 7, the older operating system still running on most PCs. Microsoft and PC makers want to erase the memory of the last big update, 2012's Windows 8, which alienated many with its jarring, unwieldy design.
Microsoft skipped the name Windows 9, as if to distance itself further from the last release. While many analysts believe Windows 8 made sagging PC sales even worse, it's far from certain if Windows 10 will spur the industry back to growth.
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NEW YORK - Imagine making a video call without other people being able to listen in.
Yahoo (
NASDAQ:YHOO,
Forum) is trying to make that happen with Livetext, a new app that seeks to make video calling as private as texting.
Yahoo says video calls can be better than texts for expressing emotions, but their audio component makes private conversations public. With Livetext, you message friends by typing, just like texting, but you see video of friends without the audio.
It's the latest example of Yahoo trying to catch up in mobile services since Marissa Mayer became the company's CEO three years ago. Facebook Messenger, WhatsApp, Skype and other services already deliver video calls. Yahoo's twist is silencing audio.
It's not clear how much traction this app will get. Friends will also need to be using Livetext, and for now, the pool of users is much smaller than those with established rivals. Yahoo says it didn't want to tap its existing network of millions of users, in order to keep the experience intimate. To use Livetext, users create a separate ID and make friend requests using their phone's address book.
Following tests in Hong Kong, Taiwan and Ireland, as well as some U.S. college campuses, the app will be released Thursday in the U.S., Canada, Germany, France and the U.K. Versions for Apple and Android devices will be available.
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SAN FRANCISCO - Like a lot of teenagers, Aanya Nigam reflexively shares her whereabouts, activities and thoughts on Twitter, Instagram and other social networks without a qualm.
But Aanya's care-free attitude dissolved into paranoia a few months ago shortly after her mother bought Amazon's (
NASDAQ:AMZN,
Forum) Echo, a digital assistant that can be set up in a home or office to listen for various requests, such as for a song, a sports score, the weather, or even a book to be read aloud.
After using the Internet-connected device for two months, Aanya, 16, started to worry that the Echo was eavesdropping on conversations in her Issaquah, Washington, living room. So she unplugged the device and hid it in a place that her mother, Anjana Agarwal, still hasn't been able to find.
“I guess there is a difference between deciding to share something and having something captured by something that you don't know when it's listening,” Agarwal said of her daughter's misgivings.
The Echo, a $180 cylindrical device that began general shipping in July after months of public testing, is the latest advance in voice-recognition technology that's enabling machines to record snippets of conversation that are analyzed and stored by companies promising to make their customers' lives better.
Other increasingly popular forms of voice-recognition services include Apple's Siri assistant on mobile devices, Microsoft's Cortana and the “OK Google” feature for speaking to Google's search engine. Spoken commands can also be used to find something to watch on some TVs, and an upcoming Barbie doll will include an Internet-connected microphone to hear what's being said.
These innovations will confront people with a choice pitting convenience against privacy as they decide whether to open another digital peephole into their lives for a growing number of devices equipped with Internet-connected microphones and cameras.
The phenomenon, dubbed the “Internet of Things,” promises to usher in an era of automated homes outfitted with locks, lights, thermostats, entertainment systems and servants such as the Echo that respond to spoken words.
It's also raising the spectre of Internet-connected microphones being secretly used as a wiretap, either by a company providing a digital service, government officials with court orders or intruders that seize control of the equipment.
“We are on the trajectory of a future filled with voice-assisted apps and voice-assisted devices,” Forrester Research analyst Fatemeh Khatibloo says. “This is going to require finding the fine balance between creating a really great user experience and something that's creepy.”
Fears about Internet surveillance have heightened during the past two years as former National Security Agency contractor Edward Snowden released documents revealing that the U.S. government's terrorist-fighting programs have included mining personal information collected by a variety of technology companies.
The Electronic Privacy Information Center, a watchdog group, wants the Federal Trade Commission to set security standards and strict limitations on the storage and use of personal information collected through Internet-connected microphones and cameras.
“We think it's misleading to only present the potential conveniences of this technology without also presenting the huge number of possible drawbacks,” said Julia Horwitz, director of the centre's privacy project.
The FTC believes companies selling Internet-connected devices and apps should collect as little personal data as possible and quickly delete it once the information has served its purpose, said Kristen Anderson, an attorney with the commission's division of privacy and identity protection.
Amazon.com says Echo users don't need to worry about the device eavesdropping on them. As a safeguard, according to Amazon, the device's microphone is programmed to come on only after it's activated with the press of a button or the use of a certain word, such as Alexa, the name of the software that powers the Echo.
A blue light on the Echo also comes on when it's recording and remains illuminated when it's listening. Users can also select a sound to alert them when the Echo is recording. Amazon also allows users to review the recordings made by the Echo and delete any or all of them, although the Seattle company warns the device might not work as well without access to the audio history.
The Echo so far is getting mostly glowing reviews. It has received a five-star or four-star rating from about 90 per cent of the roughly 23,000 reviews posted on Amazon.com.
Despite what Amazon says, Steven Combs has noticed the Echo's blue light illuminate at times when it hasn't been asked during the six months he has been using a test version of the device in his Columbus, Indiana, home. But he says he has never worried about being spied upon.
“Somebody would have to have a real interest in me, and I don't think I am that interesting for someone to come after my data,” said Combs, the president of a community college.
Michael Edelman, 61, started to wonder about the Echo's snooping potential within the first few weeks after he set up the device in his home in Huntington Woods, Michigan. He frets about the possibility of government agencies using the Echo or similar devices as a surveillance tool, though that concern hasn't been enough to cause him to turn off the device's microphone.
“After you have lived long enough, you realize people will be willing to bring spying technology into their own house if they think it will do something great for them,” Edelman said.