TIME Mobile

Chinese Tech Giant Alibaba Thinks This Is the Next WhatsApp

Fackbook Acquires WhatsApp For $16 Billion
Justin Sullivan—Getty Images

Alibaba Group, the Chinese Internet giant that already has businesses similar to Amazon, eBay and PayPal, wants a piece of the messaging space too. The company has given $215 million in funding to a quickly growing messaging app called Tango.

While the popular messaging service WhatsApp prides itself on its simplicity, Tango attempts to roll multiple services into a single program. The app offers games, free messaging, voice calls and a social network to share songs and photos. Tango has racked up 70 million monthly users and 200 total registered users over the last four years. Now, it also has major backing from one of the largest Internet companies in the world.

“Tango has exhibited tremendous growth because of its unique approach to combine free communications, social and content,” Joe Tsai, executive vice chairman of Alibaba Group, said in a press release. “We were simply blown away by the vision and quality of the team at Tango and believe they have a disruptive way of looking at the mobile and messaging opportunity.”

Alibaba now has a 20 to 25 percent stake in Tango, valuing the company at $1.1 billion, according to Forbes. The startup received a total of $280 million in its most recent funding round, with previous investors chipping in along with Alibaba. The messaging app is the latest to get a huge investment from a tech giant. WhatsApp was bought by Facebook for an eye-popping $19 billion in February, and the voice-and-messaging app Viber was purchased for $900 million by Japanese online retailer Rakuten just a week earlier.

Alibaba’s moves are being closely watched as it preps for a public offering in the U.S. in the coming months. The company could raise as much as $15 billion in its IPO, which would make it the largest Internet company to go public since Facebook in 2012.

TIME Advertising

Harsh Samsung Ad Throws Shade on Pretty Much Everybody

Samsung has gotten into a habit of taking potshot at its competitors in its commercials. The tech giant recently mocked the faux-gravitas of Apple ads and basically called the people that wait in line for new iPhones total suckers. Today, the gloves really come off as Samsung criticizes Apple, Microsoft and Amazon all in the very same commercial.

The spot, centered on the tagline “It Can Do That,” highlights the advantages of Samsung’s Galaxy pro tablets over other devices in the market. A man in a business meeting pulls up his email account in the middle of a video chat while his iPad-owning colleague looks on helplessly. (The iPad can’t run two programs on-screen at once.) Later, another man’s bulky Microsoft Surface tablet hogs all the space on a coffee table with its mouse, keyboard and charger. At a book club meeting, a group of women with Amazon Kindles are shocked that one member’s Galaxy does things besides “books.” Really, the condescending smile of the Galaxy owner at the end who believes her tablet’s display is crisper than the “retina thingy” on her friend’s iPad sums up the tone of the commercial pretty well.

Samsung has long tried to market its way to dominance in the tech sector. The company spent an estimated $14 billion on marketing in 2013, compared to $3.1 billion by Amazon, $1.1 billion by Apple. The iPhone and the iPad are still the best selling smartphone and tablet in the world, but going negative is often a strategy for second-place contenders anyway. Samsung’s current name-calling echoes Apple’s own “Mac vs. PC” ads in the mid-2000s and Microsoft’s current “Scroogled” campaign against Google.

TIME coca-cola

LeBron James Gets His Own Soda

Miami Heat forward LeBron James smiles after a 100-96 win over the Cleveland Cavaliers at Quicken Loans Arena
Miami Heat forward LeBron James smiles after a 100-96 win over the Cleveland Cavaliers at Quicken Loans Arena, Mar 18, 2014. David Richard—USA Today Sports/Reuters

Miami Heat star LeBron James is partnering with Sprite to introduce 'Sprite 6 Mix,' a specially branded cherry- and orange-flavored version of the popular lemon-and-lime soft drink. The new beverage hits store shelves nationwide for a limited time this month

LeBron James already has a best-selling sneaker line and a cartoon series on YouTube. Soon, he’ll have his own beverage, too.

The NBA All-Star is partnering with Sprite to release Sprite 6 Mix, a cherry and orange-flavored version of the lemon-lime soda. The drink will be available for a limited time nationally starting this month. Sprite 6 Mix will feature a crown on its label — a reference to the basketball player’s nickname, “King James” — and will be the company’s first soda developed in tandem with a celebrity.

James earned $42 million in endorsement deals in 2013, leading all NBA players, according to Forbes. He’s been a pitchman for the Coca-Cola Company, which owns Sprite, since he first entered the NBA in 2003. James has helped the company advertise several of its brands in that time—making improbable full-court three-pointers for Powerade, trying a court case for Vitaminwater and challenging Yao Ming to a battle of cultural stereotypes for Coca-Cola itself.

Sprite 6 Mix will get a 15-second TV spot all its own this spring. Whether James’ new soda will reach the cultural ubiquity of rap star Nelly’s energy drink Pimp Juice remains to be seen.

TIME eBay

Carl Icahn Has a New Plan to Spin Off PayPal

Icahn Enterprises L.P. To Ring The NASDAQ Stock Market Closing Bell
Scott Eells—Bloomberg/Getty Images

Activist investor Carl Icahn has hatched a new plot in his ongoing quest to get eBay to spinoff its online payment service PayPal. In a letter to eBay shareholders released Wednesday, Icahn advocates for a partial IPO of PayPal, in which eBay would sell off 20 percent of the company in a public offering. “PayPal is a tremendous company, but it is on the verge of going to war against strong adversaries, and only with the benefits of being an independent company…will PayPal be capable of winning that war.,” Icahn writes in the letter.

The missive rattles off several reasons that a PayPal IPO makes sense from Icahn’s view. An independent PayPal would create greater value for shareholders, he argues, and money raised from the offering could be used to recruit more talent and make strategic acquisitions. An independent management team and board of directors would also benefit PayPal, Icahn says, because the company would be able to more easily pursue partnerships with companies that could potentially threaten eBay’s business. Icahn also imagines that other tech companies that are hungry to enter the online payments space, like Facebook, might buy a stake in PayPal if given the opportunity.

The proposal is a step back from Icahn’s original hope of getting PayPal to go entirely independent. But eBay still has no interest in parting with even a portion of the payments service. “We continue to believe PayPal and eBay together is the best path to creating sustainable, long-term shareholder value in the future,” the company said in an emailed statement, noting that eBay’s share price has risen by more than 400 percent in the past five years. “Together, PayPal and eBay have strong, real synergies that benefit both businesses. These synergies cannot be easily addressed in arm’s length commercial agreements.”

The issue is expected to be presented for a vote at eBay’s annual shareholders meeting this spring.

TIME Mobile

The Mobile Ad Market Is Exploding Because of These Two Companies

Apple iPhone
Justin Sullivan—Getty Images

The once-tiny mobile advertising sector is seeing huge growth, mainly thanks to the efforts of Google and Facebook. The two tech giants led a 105 percent gain in mobile ad spending in 2013, according to research firm eMarketer. In total, marketers spent almost $18 billion for ads on phones and tablets last year. That figure is projected to rise in 2014 to $31 billion, comprising about one-quarter of overall digital ad spending.

Facebook, somewhat surprisingly, has been the biggest beneficiary of the quick shift to mobile. Less than two years ago the company’s stock price was plummeting because of doubts that the social network could replicate its desktop-based ad business on smartphones. But the company began cramming ads directly into users’ news feeds and selling more mobile-native products, like ads that let users install a new app with just a few clicks. Now the majority of Facebook’s ad business comes from mobile, and its share of the total mobile advertising market is projected to pass 21 percent this year, up from just 5.4 percent in 2012. A newly released video ad product and increased monetization of the photo-sharing app Instagram will help keep Facebook’s mobile business humming.

Google, meanwhile, is watching its long-held dominance of the mobile ad market slowly erode. The company is still the juggernaut of the sector, netting 49 percent of mobile ad revenue in 2013. But last year was the first time Google didn’t collect a majority of overall mobile ad spending, and eMarketer projects that its share will slip to less than 47 percent this year. The company’s business model, selling ads related to users’ search queries, faces headwinds on mobile. Instead of visiting search engines, mobile users often pull up specific apps like Yelp or Amazon to find information. Compounding Google’s problems is the fact that the company’s mobile ads cost significantly less than their desktop ads, according to The New York Times. Facebook, on the other hand, has a smaller legacy desktop business to unravel, and the social network has claimed that its mobile ads cost more than its desktop ones.

Still, both companies are expected to remain atop the mobile mountaintop for the foreseeable future (Twitter is a distant third in mobile ad revenue, with a 2.4 percent share). eMarketer predicts Facebook will pull in $6.8 billion via mobile this year, while Google will earn $14.7 billion. That’s still a large gap, but the chasm between the two giants is closing fast.

TIME newspapers

Jeff Bezos Makes His First Major Move at the Washington Post

Jeff Bezos Launches Bezos Center For Innovation In Seattle
Jeff Bezos David Ryder—Getty Images

In an effort to boost The Washington Post's web traffic and increase its national presence, Amazon's CEO struck a deal with local papers to give their paying customers free access to some of the Post's subscriber content

Just a few months after buying The Washington Post, Amazon CEO Jeff Bezos is making his first significant change to the newspaper’s business model. Starting in May, the Post will lift its online paywall for subscribers of certain local newspapers, including The Dallas Morning News, the Honolulu Star-Advertiser and the Minneapolis Star-Tribune. The deal could boost the Post‘s web traffic while also increasing its national presence in areas where it is not distributed in print.

Like many news organizations, the Post allows people to view a limited number of articles online per month, then charges $7.99 every four weeks for unlimited access. The new deal will give subscribers of other papers free access to the Post’s website as well as its smartphone and tablet apps. No money is changing hands between the Post and the local papers, according to the Financial Times.

In the future, the Post could be bundled with other newspapers and even media properties in other sectors. Washington Post President Steve Hills told the Financial Times that digital subscription services such as Amazon Prime and Spotify could one day come packaged with the Post’s content. Bezos is focused on developing “a great digital audience 10 years from now, 20 years from now” rather than immediate profits, Hills said. The newspaper division of The Washington Post Company was losing money before Bezos announced he would buy the flagship paper for $250 million in August.

TIME Music Industry

Cue the Sad Trombone: Global Music Sales Are Diving Again

Spotify
Jonathan Nackstrand—AFP/Getty Images

After a brief respite in 2012, a new report shows that global recorded music revenues slipped 3.9 percent in 2013 to $15 billion. Streaming platforms, however, continued to grow, topping $1 billion in sales for the first time

After a brief respite in 2012, music sales are once again on the decline. A new report by the International Federation of the Phonographic Industry shows that recorded music revenues slipped 3.9 percent last year to $15 billion globally.

A precipitous fall in revenue in Japan is mostly to blame. The country is the second-largest market for recorded music in the world, but sales fell by a huge 16.7 percent there in 2013 because of a decline in both physical music sales and older digital products such as ringtones. Taking Japan out of the equation, global music sales were nearly flat year-over-year, dipping by 0.1 percent from 2012 to 2013.

The biggest growth sector in the industry was once again in subscription services such as Spotify and Rdio. As the number of paying subscribers rose from 20 million to 28 million from 2012 to 2013, revenue from such platforms grew by 51 percent and topped $1 billion for the first time. Revenue from ad-supported streaming services like YouTube and the free version of Spotify also grew by more than 17 percent. In total more than a quarter of the industry’s $5.9 billion in digital revenues now comes from these free and subscription-based streaming options.

Physical music sales continued drive the majority of revenue for the industry, but likely for the last time. Physical formats comprised 51 percent of music sales last year, down from 56 percent in 2012. The rise of digital is expected to continue unabated for the foreseeable future.

The mixed data from the report cast 2013 as “a year of good news and bad news,” Universal Music Group International CEO Max Hole told Billboard. Another yearly decline—the 13th in the last 14 years—is not the step the industry wants to take as it tries to claw its way back to the heyday of the ‘90s, when global industry revenue was close to $30 billion. But executives are confident that people will one day pay for music subscription services en masse. The international CEO of Sony Music Entertainment told Billboard he expects 100 million people to sign up for music streaming services “in the near future.” The question is whether streaming will be able to rise fast enough to make up for ongoing declines in physical sales and, more recently, digital downloads. The IFPI report noted that digital download revenue dropped 2 percent last year.

Despite uncertainty about the industry’s future, the biggest pop stars are still doing quite well. Robin Thicke’s “Blurred Lines” was the biggest single of the year. Taking into account track sales and streams, it sold 14.8 million units globally. “Blurred Lines” was followed by Macklemore & Ryan Lewis’ “Thrift Shop,” which sold 13.8 million units and Avicii’s “Wake Me Up,” which sold 13.4 million units (and is now the most-streamed song ever on Spotify).

On the album front, One Direction’s Midnight Memories took the 2013 crown, selling 4 million units globally. Eminem’s Marshall Mathers LP 2 followed with 3.8 million in sales, and Justin Timberlake’s The 20/20 Experience rounded out the top three with sales of 3.6 million. Beyonce’s self-titled album, a surprise December release that was only available on iTunes its first week, even snuck into the bottom of the top 10 with 2.3 million units sold.

TIME Video Games

Minecraft Is Still Generating Insane Amounts of Cash for Developer Mojang

Minecraft
Minecraft

Five years after its initial release, the video game Minecraft is still bringing in huge revenue for its developer, Mojang AB. The Swedish video game company reported that its revenue increased to 2.07 billion Swedish kronor (or $330 million) in 2013, a 38 percent increase from the previous year, according to the Wall Street Journal. The company pulled in 816 million kronor ($129 million) in profit.

Minecraft, a sandbox game in which people can build virtually anything they can imagine out of blocks, began as a quirky, independently developed PC game in 2009. Since then the title has blossomed into an empire, spawning a glut of merchandise, versions for mobile phones and home consoles and, appropriately, an official LEGO set. In total Minecraft has sold more than 35 million copies across various platforms. The PC version alone generated almost $250,000 in revenue in the last 24 hours. Because Mojang sells the PC version exclusively on its own website, the company gets to keep all of that money instead of splitting it with game retailers like GameStop or Valve’s Steam online marketplace.

Other gaming startups that have hit upon viral successes like Minecraft are now going public. Dublin-based King, maker of the mobile hit Candy Crush Saga (and former employer of Minecraft creator Markus Persson), is prepping an initial public offering in the U.S. that could value the company at as much as $7.6 billion. Chukong Technologies, a Chinese mobile gaming firm that developed the popular title Fishing Joy, is reportedly planning a U.S. IPO as well. Mojang has no current plans to go public, according to the Journal.

MORE: The History of Video Game Consoles – Full

TIME Automotives

Watch a Small Child Ruthlessly Bully Ricky Gervais in New Audi Ad

Luxury carmaker Audi has hired Ricky Gervais to plug its latest vehicle. The biting British comedian appears in a series of ads for the new 2015 Audi A3 sedan. In the main 60-second spot (below), Gervais, along with other celebrities such as comedian Kristen Schaal and boxer Claressa Shields speak the opening lyrics to Queen’s “We Are the Champions.”

Another spot (above) features Gervais sitting in an Audi A3 with his niece as she uses the car’s new 4G LTE wireless capability to look up people badmouthing Gervais on Twitter. “Ricky is a pig-nosed troll,” she recites, among other insults. The new Audi, which launches in April, will be the first U.S. car with 4G LTE.

The ads are part of Audi’s ongoing “Uncompromised” campaign, which also included the “Doberhuahua” spot during the Super Bowl. The series also features small video vignettes that profile the individual characters in the main 60-second commercial.

With the A3, which costs less than $30,000, Audi is attempting to bring luxury cars to a broader market. Mercedes is also pushing its prices down, having launched the $29,900 CLA last year. Automotive analysts told Ad Age that at such a price point, car companies can convince middle class families to upgrade from a Honda Accord or Toyota Avalon to a luxury brand.

TIME whatsapp

WhatsApp CEO Defends Company Against Privacy Concerns

The WhatsApp application displayed on an in London on Feb. 20, 2014.
The WhatsApp application displayed on an in London on Feb. 20, 2014. Chris Ratcliffe—Bloomberg/Getty Images

The CEO of the popular messaging app, recently purchased by Facebook in a $19B deal, is fighting back against what he calls "careless and inaccurate information" concerning the company's data privacy practices following the acquisition

The CEO of WhatsApp spoke out today against what he calls “careless and inaccurate information” about how the company’s user data policies might change now that it’s been bought by the social media giant for $19 billion.

Jan Koum took to his company’s blog to reassure users of the messaging app that the company won’t start collecting additional customer data to feed Facebook’s massive advertising business. “You don’t have to give us your name and we don’t ask for your email address,” he wrote. “We don’t know your likes, what you search for on the internet or collect your GPS location. None of that data has ever been collected and stored by WhatsApp, and we really have no plans to change that.”

Koum insisted that the company would not have agreed to the Facebook buyout if it had to compromise its values, even though the two companies seem to come from different ends of the ideological spectrum. Facebook has become one of the largest Internet companies in the world by leveraging its users’ data, sometimes without their knowledge, in order to serve them well-targeted ads that companies pay a premium for. WhatsApp, meanwhile, is famously against using advertising to generate revenue. Koum himself published a manifesto against advertising in 2012, calling it an insult to people’s intelligence.

But Facebook CEO Mark Zuckerberg said after the deal was announced that Facebook has no plan to put ads on WhatsApp, and Koum’s post Monday seems to re-emphasize that point. “Our future partnership with Facebook will not compromise the vision that brought us to this point,” he wrote.

WhatsApp currently generates revenue by selling annual $0.99 subscriptions to its users. Zuckerberg has said that his primary goal in the near term is to scale the company from 450 million monthly users to 1 billion, rather than focusing on profits.

Your browser, Internet Explorer 8 or below, is out of date. It has known security flaws and may not display all features of this and other websites.

Learn how to update your browser