TIME Earnings

Twitter Shocks Wall Street With Big Growth in Revenue, Users

Twitter Goes Public On The New York Stock Exchange
(L-R) Twitter CEO Dick Costolo, Twitter co-founder Jack Dorsey, Twitter co-founder Evan Williams and Twitter co-founder Biz Stone applaud as Twitter rings the opening bell at the New York Stock Exchange (NYSE) while also celebrating the company's IPO on November 7, 2013 in New York City. Andrew Burton—Getty Images

Stock shoots up 25 percent in after-hours trading

Updated July 29 at 6:18 p.m.

Twitter shares leapt more than 25 percent in after-hours trading Tuesday following stellar results in the company’s latest quarterly earnings report.

The social network posted greater-than-expected growth in both revenue and monthly active users during the second quarter. Twitter added 16 million monthly active users to bring its total to 271 million, the biggest period of user growth since the first quarter of 2013. Revenue for the quarter was $312 million, blowing past analysts’ estimates of $283 million. Adjusted earnings for the company were 2 cents per share, beating expectations of a 1 cent per share loss. Overall, the company posted a net loss of $145 million for the quarter when including stock-based compensation expenses and other line items.

Pundits have been writing Twitter’s eulogy for months as its user growth slowed in the last year and the company has regularly posted losses. But the latest report shows that Twitter’s plan to make its platform more user-friendly may be paying off. Features such as a more Facebook-like profile pages and a mute button that lets users remove certain users’ tweets from their timelines are aimed at making Twitter novices feel less overwhelmed by the deluge of messages.

The World Cup, which became the most tweeted-about sporting event in Twitter history, was also likely a big boost for the social network during the quarter. Twitter organized conversations around individual matches, featured real-time score updates and attached countries’ flags to hashtags representing each team. “We made progress on multiple fronts across the business and our financial performance was truly exceptional,” CEO Dick Costolo said in a conference call with investors.

A negative point for the quarter were timeline views. At 640 per monthly active user, they were down 7% year-over-year. In the U.S., views are also down from the first quarter. Twitter regularly attributes these drops to changes in its interface that make it easier for users to see interesting tweets without scrolling through a deluge of messages. Also, some of the content on Twitter’s specially curated World Cup pages didn’t count toward the metric.

As Twitter works to differentiate itself from Facebook in the eyes of investors, Costolo spent a lot of time discussing the audiences Twitter serves outside of its monthly users. He said the total number of people who visit Twitter each month is two to three times its official user base when including those who don’t log in. He also touted what we called syndicated viewers, people who see tweets while reading news sites or watching television broadcasts.

Eventually, the company hopes to monetize these less dedicated users somehow, though Costolo said for now the company is just focused on improving the user experience of Twitter’s many casual visitors. He also wouldn’t rule out the idea of a version of the timeline that selected tweets based on an algorithm, like Facebook’s News Feed, rather than showing them in chronological order. “We’re not ruling any any kinds of changes that we might deliver in the product in service to bridging that gap to signing up for Twitter and receiving that value,” he said.

Challenges still remain for Twitter, which won’t have another World Cup to goose its metrics for another four years. But the company reversed some ominous trends this quarter and proved it can take advantage of global events tailor-made for the Web’s water cooler.

TIME Video Games

Xbox One Owners Can Now Pay $4.99 Month for EA Games

NFL Hall of Fame quarterback Joe Montana
NFL Hall of Fame quarterback Joe Montana (L) walks on stage to join the head of EA Sports Andrew Wilson (R) as they introduce the new EA Sports Madden 13 game with Kinect voice functionality at the Microsoft Xbox E3 2012 media briefing in Los Angeles on June 4, 2012. Robyn Beck—AFP/Getty Images

Only four games are available so far

Electronic Arts is adapting the subscription service model to the video game industry with a new offering for Xbox One. The new service, called EA Access, will allow Xbox One owners to download and play hit EA games for an unlimited amount of time for $4.99 per month or $29.99 per year. A release date was not announced.

Netflix this is not, so far. EA Access will launch with four games: FIFA 14, Madden NFL 25, Peggle 2 and Battlefield 4. Combined, the games retail for more than $150, so the offer is a steal if you happen to enjoy some combination of sports games, first-person shooters and puzzlers. EA says more games will be added to the lineup in the future.

In addition to the catalog of older titles, EA Access members will get a 10 percent discount on the digital version of upcoming Xbox One games like Dragon Age Inquisition and NHL 15. Members will also have access to free trials of upcoming games five days before their official release.

Video game makers are keen to get gamers used to buying and downloading games online because they get to avoid manufacturing and distribution costs while often charging just as much as versions sold in brick-and-mortar stores. So far, there’s no word on a PS4 version of EA Access, but Sony is currently rolling out a new service called PlayStation Now that will allow users to stream older games to a variety of Sony devices.

TIME facebook

Get Ready to Download an Extra App to Send Facebook Messages

A view of and Apple iPhone displaying th
A view of and Apple iPhone displaying the Facebook app's splash screen May 10, 2012 in Washington, D.C. BRENDAN SMIALOWSKI—AFP/Getty Images

If you enjoy messaging with friends via Facebook’s primary mobile app, you’re soon going to need an entirely new app to keep chatting. The social network is quietly eliminating the ability to chat with friends on its iPhone and Android apps. Instead, users will have to download Messenger, a dedicated chat app from the company, in order to have real-time conversations (to be clear, users can still write on each other’s profile pages and communicate in other ways via the regular Facebook app).

The change was announced earlier this year and has already rolled out in Europe, much to the consternation of many users. Some users have griped that they don’t want to juggle two Facebook apps to perform functions that were easily done in one app before. But the social network says the transition from Facebook proper to Messenger is seamless and that people using Messenger respond about 20 percent faster, boosting usage.

“In the next few days, we’re continuing to notify more people that if they want to send and receive Facebook messages, they’ll need to download the Messenger app,” a Facebook spokesperson said in an emailed statement. “As we’ve said, our goal is to focus development efforts on making Messenger the best mobile messaging experience possible and avoid the confusion of having separate Facebook mobile messaging experiences.”

In the last year, Facebook has sharply increased its focus on Messenger, which now has more than 200 million active users. The app has gotten a bevy of new features, such as the ability to send videos, and a redesigned interface that allows for visual conversations, a la Snapchat. The company is also keen to divine a way to make money off its Messenger users—recently, a former PayPal exec jumped ship to Facebook to lead the company’s mobile messaging business.

News of the wider rollout of the Messenger requirement was first reported by TechCrunch.

Facebook’s plan mirrors a similar effort over at Foursquare to force users to download a new app called Swarm to check-in to locations. Unlike Swarm, though, Messenger is already a popular standalone service in its own right.

For now, the Messenger requirement will primarily affect smartphone users. People who access Facebook on the iPad, on desktop computers, on the Windows Phone and through web browsers on their phones won’t be affected.

TIME Transportation

Uber Rolls Out ‘Uber for Business’ To Help You Expense Rides

Barcelona Cabs Strike Against Uber Taxi App
In this photo illustration, the smartphone app 'Uber' shows how to select a pick up location on July 1, 2014 in Barcelona, Spain. David Ramos—Getty Images

Uber doesn’t want to be just a service for people on vacations or late-night benders — the company is launching a new business portal to target customers traveling for work.

The new platform, called Uber for Business, will let companies set up corporate accounts through which employees can charge their rides directly to their employers rather than having to keep track of receipts.

“A centralized billing system helps administrators, team leads and small business owners by providing trip information in place of receipts and helps employees by connecting with the same safe, reliable Uber ride they are used to without the hassle of having to file expenses,” Uber said in a Tuesday blog post announcing the new feature.

In addition, Uber has partnered with Concur, the corporate expenses management company, to include Uber rides directly in Concur’s expense options. Concur’s 25 million users will be able to link their Uber and Concur accounts and add Uber charges to their expense reports seamlessly.

The new focus on business could help Uber tap into a large pool of wealthier customers. The startup is growing fast and recently earned a valuation of $17 billion.

Airbnb, another hot startup that lets people rent out their homes to guests, announced a similar business portal on Monday aimed at corporate travelers.


TIME Advertising

Microsoft Gets Revenge for Those Old ‘Mac vs. PC’ Ads

Cortana vs. Siri, round one: Fight!

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Correction applied Tuesday, July 29

One of Apple’s first effective assaults on Microsoft’s tech empire was the Mac vs. PC ad campaign, which cast Windows computers as devices for schlubby nerds and Macs as tools for cool creatives. The battlefield has now shifted from desktops to smartphones, but Microsoft is taking a cue from Apple’s old campaign with a put-down ad of its own.

In a new pitch for Cortana, Microsoft’s digital personal assistant, the company pits a Windows Phone boasting the software against an iPhone with Siri. As Cortana effortlessly answers a user’s questions, Siri fumbles its responses and is eventually forced to admit, “Now that is a smart phone.”

The ad, which features a Lumia 635 Windows Phone, mainly shows off Cortana’s contextualization abilities. The assistant can use geofences to issue reminders when users arrive at a specific location or automatically serve up messages when a specific person calls. Some reviewers have still found Siri to be a more helpful assistant overall, so it’s likely this new version of “Mac vs. PC” will continue to be hotly debated.

Correction: The original version of this story misstated the feature set of Siri. The software does use geofencing to set location-based reminders.

 

TIME Tech Policy

Meet the Woman Keeping Silicon Valley in Check

Federal Trade Commission Chairwoman Edith Ramirez Cade Martin 2014

Edith Ramirez is probably not the most popular person in Seattle right now. As the chairwoman of the Federal Trade Commission, she’s currently suing two of the city’s biggest tech companies: Amazon, for allegedly making it too easy for kids to rack up in-app purchases on their parents’ Kindles, and T-Mobile, for allegedly cramming unwanted charges into customers’ phone bills. That’s to say nothing of the recent settlements with Snapchat over false marketing and Apple over in-app purchases. It’s all come under the watchful eye of Ramirez, who assumed the chairwoman’s position in March 2013 and has taken a laser focus to the activities of tech companies, particularly in regards to mobile.

The new FTC head talked to TIME about the hidden permissions lurking in terms of service agreements, Facebook’s controversial mood study and whether Americans should ever expect a “right to be forgotten” online. An edited version of the conversation is below.

TIME: How important is the technology sector as a whole for the FTC right now? Is it an area of focus for you personally?

Ramirez: Our fundamental mission is to protect consumers and promote competition and so we are going to be wherever consumers are. The reality is that technology has been playing a critically important role for the agency for a number of years. Because we see consumers really gravitating to mobile devices, it’s crucial that the agency be very much informed about and keenly aware of what’s happening in the mobile sphere.

TIME: What are the biggest challenges or dangerous that consumers can face with the rise of mobile?

Ramirez: You want consumers to be able to partake in all of the terrific innovation we see in the marketplace. One way to assure that is to make sure the products that are out there take into account what’s of concern to consumers—that includes, among other things, taking into account concerns about data security and privacy, and also making sure that some of the basic protections that we’re all used to when we walk into a grocery store or a local convenience store, that we also have those basic protections available to us when we’re engaging in a transaction on our smartphone.

Data security is paramount in my view. The more connected we are, the more information and data that is being gathered by all sorts of different companies. It’s crucial that this personal information that is being collected and being used, that companies take reasonable steps to ensure that data is protected.

TIME: We live in this era now where people sign up for services and they don’t read the fine print. Do you think there’s a base level of privacy or control that Internet companies should be affording their customers?

Ramirez: I do. We realize that consumers aren’t going to be poring over long, confusing privacy policies. Now that we’re in a mobile world, what’s the likelihood that anyone’s going to be scrolling through on a mobile device some lengthy privacy policy? That’s become increasingly unlikely.

Companies need to be thinking about privacy from the get-go, when they first start conceiving of any new product or service. If you’re developing an app that’s a flashlight app, do you really need to have access to my contacts? Do you really need to have access to my geolocation? If they want to access information that goes beyond what one would expect, they ought to be asking for permission to do that.

I think we’ve seen a tremendous improvement, even in the course of the time I’ve been at the agency. We’ve seen companies realize that consumers really do care very deeply about maintaining their information [security] and they want to also exercise greater control. At the same time I think a lot more needs to be done in this area. A lot in this area still continues to take place behind the scenes in a black box. Consumers may not fully appreciate the extent of data-sharing that’s taking place.

TIME: Last month people were upset because Facebook did this experiment where they were altering people’s News Feeds to change their mood in some way. Do you think that experiment was appropriate for them to do?

Ramirez: I can’t really comment on the specifics of what Facebook did, but I think what it does show is again the need for consumers to be in the driver’s seat. They want to know what companies are doing, how they’re using the information that they’re sharing. It just goes to show that consumers don’t want to be in the dark about this. That’s a basic responsibility companies have—they ought to be transparent about what they’re doing, they ought to give consumers an opportunity to have control over how their information is being used, what information is being collected. Simply because [consumers] are receiving a service, and even it happens to be free, that doesn’t mean they don’t want to be in control.

TIME: Does the FTC plan to investigate the Facebook issue formally?

Ramirez: We can’t comment on how investigations we conduct. What I can tell you is these are issues we are concerned about and we are monitoring the marketplace.

TIME: In Europe, the courts recently enshrined a “right to be forgotten,” so people can delete articles about themselves from search results. Do you think that’s something Americans should have the right to for privacy reasons?

Ramirez: Of course we’re operating here in the U.S. under a very different legal regime than folks are in Europe. An expansive “right to be forgotten” is not something that’s likely to pass Constitutional muster here in the United States because there is a First Amendment right to both access to public information and freedom of expression. At the same time, I do understand the need for us to think about controlling our own information. By way of example, I know that consumers want to be able to delete information. If they’re on a particular platform, they will want to be able to be assured that if they close out their account that their information will be deleted. This is exactly an element of an order we have with Facebook. It’s not an expansive right to be forgotten, but there are certain controls and tools that I think U.S. consumers would like to have.

TIME: As we see these tech companies like Google and Amazon getting bigger and bigger, taking up a larger portion of their sectors, do you think there are antitrust issues with these companies as they continue to grow?

Ramirez: With any large company, if they have market power, monopoly power, we would be looking closely at how they use that. We did conduct an investigation relative to Google a couple of years back. In that particular investigation, we opted not to take action.

TIME: A lot of times when FTC settlements come out, people see the dollar figure, and it seems like a slap on the wrist to these companies that are generating billions of dollars in revenue every year. Are the actions you take actual deterrents to stop companies from abusing consumers in various ways?

Ramirez: We do not have general civil penalty authority. We can’t assess a fine when we find a violation of law under our general statute. What we can do is seek to obtain consumer redress or we can, if appropriate, ask a company to disgorge any unlawful gains that resulted from the unlawful conduct.

In any particular case, the amount that you may see, you may think, ‘Well how does that compare to the profits of a company?” But that’s not really the analysis. The analysis on our end is, “Are we successfully recovering money that would compensate consumers for the damage that they have suffered.”

I think our enforcement work is sending important signals to the marketplace. In the privacy arena, Facebook, Google, Twitter [are] under order. It’s sent important signals to them, and I think as a result of the action that we’ve taken, companies are more aware of what their responsibilities are.

TIME: How are you able to strike a balance between this goal of consumer protection and allowing companies to innovate and try new things?

Ramirez: Whether it’s having information about what you’re paying for, whether it’s knowing what information an app might want to have access to when I’m downloading it—all of these things really work side by side with innovation. I don’t think consumers should have to sacrifice their privacy, the security of their information…when they avail themselves of all these terrific products that we see today. In fact I think for companies to flourish, it’s really important that consumers feel they can trust the products that they’re using, that they feel that they know the full extent of what is happening when they download a service. Companies will flourish all the more if they provide basic protections.

TIME Music

Bose Is Suing Beats Over Headphone Patents

Apple Said To Be In Talks To Purchase Beats Headphones Company
Beats headphones in an Apple store on May 9, 2014 in New York City. Andrew Burton—Getty Images

As Beats is being bought by Apple

Bose is suing Beats Electronics over the noise-canceling technology in Beats’ headphones.

Bose filed suit in a U.S. District Court in Delaware Friday, claiming that Beats violated five different patents in the manufacture of its line of Studio noise-canceling headphones. The patents in question are for technology such as “Dynamically Configurable ANR Filter Block Technology” and “Digital High Frequency Phase Compensation.”

Bose is seeking an injunction to prevent Beats from selling the products it says violate its patents, as well as an award for damages.

Apple agreed to buy Beats for $3 billion in May. The deal is still pending regulatory approval.

TIME Transportation

Lyft Launching in New York City Following 2-Week Delay

Ridesharing Salt Lake City
A Lyft car crosses Market Street in San Francisco, Jan. 17, 2013. Jeff Chiu—AP

Lyft will have to use commercial drivers in the five boroughs

After a two-week legal spat with state officials, ride-sharing service Lyft is finally taking off in New York City Friday at 7 p.m. ET.

Unlike in other cities, where strangers can give rides to their neighbors using the Lyft app, the service in the five boroughs will be operated by commercial drivers only, according to a statement from the New York Attorney General’s office. The change in Lyft’s business model makes it compliant with the rules of the Taxi and Limousine Commission, which regulates taxis and black car services, such as Uber, in New York City.

Despite the deal, Lyft is not giving up on eventually bringing its original model to New York City. “This agreement is the first big step in finding a home for Lyft’s peer-to-peer model in New York,” the company said in a blog post. “We’ll continue to work with the TLC, Department of Financial Services, and the Attorney General’s office to craft new rules for peer-to-peer transportation in New York.”

As part of its agreement with the state, Lyft will suspend its operations in Buffalo and Rochester by August 1. The company says it will work with regulatory officials to comply with state law and relaunch in those communities later.

TIME Video Games

Watch the First Trailer for Halo: Nightfall

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Microsoft released the first trailer for its upcoming live-action digital series Halo: Nightfall.

The series, which is being executive produced by Ridley Scott, will feature a new character named Jameson Locke, who is an agent for the secretive Office of Naval Intelligence. The series will be bundled with Halo: The Master Chief Collection, a compilation of past Halo games that launches this November.

TIME facebook

Here’s How Facebook Doubled Its IPO Price

Facebook Holds f8 Developers Conference
Facebook CEO Mark Zuckerberg delivers the opening kenote at the Facebook f8 conference on April 30, 2014 in San Francisco, California. Justin Sullivan—Getty Images

Facebook's stock doubled its IPO price by midday Thursday

Facebook suffered a cruel summer back in 2012. The social network raised its IPO price just before going public in May 2012, but technical glitches during early trading caused mass investor confusion. Nasdaq eventually paid a $10 million fine over the debacle, and Wall Street showed no mercy to the social network in the ensuing months. Facebook’s stock cratered, diving from $38 to below $18 before the following autumn.

Two years later, the sun’s shining bright on the tech giant. Facebook beat analysts’ expectations yet again in its latest quarterly earnings report, generating revenue of $2.9 billion and earnings per share of 42 cents. That sent the company’s stock soaring above $76 during midday trading Thursday, doubling its IPO price of $38. That’s also more than quadruple the social network’s all-time low close of $17.73.

Screen Shot 2014-07-24 at 1.25.08 PM

Facebook’s massive turnaround has everything to do with mobile. When the company went public, its revenue was almost completely tied to desktop ads–exactly the kind of business investors in the mobile era don’t like. With more than half a billion people already accessing Facebook on mobile, the company had to prove that it could successfully transition its business. CEO Mark Zuckerberg set a laser-like focus on mobile strategy, and he forced his executive clique to do the same.

The dedication has paid off. Facebook now generates more than two-thirds of its total ad revenue on mobile and has more than a billion mobile monthly active users. Overall ad prices jumped 123 percent year-over-year, partially because mobile ads placed directly in users’ News Feeds are more valuable than ads on the right rail of the site served to desktop users.

But what really has Wall Street salivating is the fact that Facebook has plenty of mobile monetization moves left to make. New auto-playing video ads in users’ News Feeds could help the company lure marketers from television. Instagram introduced ads last year that are being positioned as an attractive option for brand marketers. The company is also likely to figure out ways to make money off its messaging goliaths Messenger and recently-acquired WhatsApp.

Overall, it’s clear that Facebook has solved its mobile conundrum, and Wall Street is rewarding it handsomely. With its share of the overall mobile advertising market quickly increasing, the company may soon to be able to challenge Google to be at the top of the totem pole of mobile.

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