TIME Companies

PayPal to Separate From eBay in 2015

(SAN JOSE, Calif.) — PayPal is splitting from EBay Inc. and will become a separate and publicly traded company next year.

The separation is expected to occur in the second half of 2015.

EBay said Tuesday that its board decided that the separation was the best path for growth and shareholder value creation for each business.

Dan Schulman, the president of the enterprise growth group at American Express, will be the new president at PayPal, effective immediately. The 56-year-old will become PayPal’s CEO once the separation takes place.

TIME Companies

No, Snapchat Hasn’t Been Hacked

But that doesn’t mean you won’t get annoying weight loss spam from your friends

Snapchat denied being hacked after some users reported receiving spam messages from their friends advertising a weight loss site.

The ephemeral messaging service told the BBC that it believed that user login data was taken from other sites and used to access Snapchat.

“We recommend using a unique and complex password to access your Snapchat account,” the company told the BBC.

According to the BBC, the spam is sent to all of the contacts on an affected user’s account. Snapchat informs those users of the breach–and recommends that they change their passwords–when they log on.

In January, the company was targeted by hackers who took 4.6 million usernames and phone numbers and released the personal data on the web–with the last two figures of the phone numbers redacted. The hackers said they were raising awareness about Snapchat security concerns.

[BBC]

TIME Advertising

Facebook Takes Its Ad Game to the Rest of the Web

Facebook Privacy Flaw Exposes Private Photos
The Facebook logo is reflected in the eyeglasses of a user in San Francisco on Dec. 7, 2011. Bloomberg/Getty Images

In a challenge to online advertising leader Google

Facebook is set to share data on its millions of users with companies looking to sell targeted ads outside the company’s social network, taking its ad business to the rest of the Internet in a major challenge to Google.

The company on Monday will launch a new ad platform dubbed Atlas, through which it promises to deliver “people-based marketing,” especially mobile devices. The idea is to leverage Facebook’s vast troves of data on its users to deliver targeted demographics to advertisers and provide metrics on results. Facebook is already the second-largest advertising platform on the web.

“People spend more time on more devices than ever before, Erik Johnson, who is heading Atlas, wrote in a blog post Monday. “This shift in consumer behavior has had a profound impact on a consumer’s path to purchase, both online and in stores. And today’s technology for ad serving and measurement—cookies—are flawed when used alone. Cookies don’t work on mobile, are becoming less accurate in demographic targeting and can’t easily or accurately measure the customer purchase funnel across browsers and devices or into the offline world.

“People-based marketing solves these problems,” Johnson added.

Atlas has already signed up with the advertising giant Omnicom Group to test automated, targeted ads, starting with campaigns for Pepsi and Intel.

TIME privacy

Here’s How Much Access Facebook Employees Have to Your Account

Facebook Homepage
Nicholas Kamm—AFP/Getty Images

Answer by Joe Sullivan, Chief Security Officer at Facebook, on Quora.

I’m Facebook’s Chief Security Officer and I oversee data security at the company. Thanks for the question. We take our role as stewards of people’s information very seriously and have invested heavily in protecting the data trusted to us.

There is no “skeleton key.” In fact, we have advanced internal tools that restrict access to information to only those employees who need it to do their jobs (e.g., investigating user reports).

There is a cross-functional group of employees who work on these safeguards and appropriate access to these tools.

Most employees do not have access and, those who do, must sign an agreement and complete a training program before using our internal tools. Finally, we track the actions performed through internal tools.

Each use is logged and requires the employee to explain the purpose of his or her use, and we audit all of this regularly.

Neither Mark nor any other senior executive at the company has tool access granted, because they do not have roles in the company where access would be necessary.

This question originally appeared on Quora: Does Mark Zuckerberg or Facebook employees have a skeleton key granting them access to every member’s Facebook profile page and information?

TIME Companies

Activist Investor Starboard Wants Yahoo to Consider Deal With AOL

Yahoo's Headquarters In Sunnyvale, California
A sign is posted in front of the Yahoo! headquarters on May 23, 2014 in Sunnyvale, California. Justin Sullivan—Getty Images

A combination of the two companies could result in cost synergies of up to $1 billion, the investor argues

Starboard Value LP has called on Yahoo’s management to consider a potential combination with AOL Inc., a deal the activist investor said could result in cost synergies of up to $1 billion.

In a letter addressed to Yahoo CEO Marissa Mayer, Starboard — which disclosed a “significant ownership stake” — argues Yahoo is “deeply undervalued relative to the sum of its parts.” The investor, which generated some headlines recently for criticizing Olive Garden’s breadsticks strategy, said a combination of Yahoo and AOL 3.46% could reduce the cost overlaps in their display advertising businesses, and cut both companies’ overhead costs.

“Importantly, we believe the combined entity would be able to more successfully navigate the ongoing industry changes, such as the growth of programmatic advertising and migration to mobile,” Starboard said.

A Yahoo 3.31% representative wasn’t immediately available to comment on Starboard’s letter.

Mayer, ranked 16th on Fortune’s Most Powerful Women in Business list, is facing pressure in the wake of Alibaba’s 0.31% initial public offering last week. At least three analysts have downgraded the company’s stock this week, citing the absence of a turnaround at Yahoo’s core business and limited upside to owning a slice of Alibaba. Yahoo still owns about 400 million shares of Alibaba, a stake worth more than $35 billion before taxes, The Wall Street Journal has reported.

Starboard’s move is also turning up the heat on Mayer to perform. Fortune earlier this year asked an important question: “Will Marissa Mayer save Yahoo?” noting that while the company’s stock value has climbed under Mayer’s tenure, the strength has had little to do with her turnaround efforts. While Yahoo has announced some high-profile acquisitions (including the $1.1 billion deal to buy Tumblr) the company’s ad business remains challenged.

Starboard points out that even after Yahoo’s “ill-timed and tax-inefficient” sale of Alibaba stock, the company’s remaining stake in Alibaba “is currently worth more than the entire enterprise value of Yahoo.” When adding in the company’s stake in Yahoo Japan, those two minority interests are worth about $11 billion, or $11 per share more than the current enterprise value of the company.

The activist investor claims the “valuation gap” is due to the fact that investors expect Yahoo management to continue past practices, including acquisitions at “massive valuations with seemingly little to no regard for profitability and return on capital.” Another problem, according to Starboard, is monetizing its non-core minority equity stakes in a tax-inefficient manner.

“We believe that Yahoo’s core business is valuable. However, given some recent operational challenges, we would expect it to trade at the low end of industry multiples,” Starboard said.

This article originally appeared on Fortune.com

TIME Companies

BlackBerry Faces Steep Challenge as It Aims for Turnaround

The Blackberry Passport Blackberry

BlackBerry is hoping to improve its outlook with the launch of its 4.5-inch square-shaped Passport

BlackBerry Ltd. has had a busy week — it debuted a new smartphone called the Passport and reported a narrower quarterly loss. But do those rosy headlines suggest a turnaround is underway?

Not necessarily. The Canada-based company on Friday reported it recognized hardware revenue on about 2.1 million smartphones for the quarter ended Aug. 30, a tiny figure compared to the over 10 million smartphones Apple sold over the weekend after the debut of the iPhone 6 and iPhone 6 Plus. BlackBerry’s quarterly revenue plunged 42% to $916 million from the year-ago level.

And for those keeping score: back when Apple debuted its first iPhone in 2007, it took 74 days to ship its one millionth smartphone. BlackBerry managed to ship over 3 million devices in a quarter over roughly the same time period.

Of course, this reversal of fortunes isn’t a surprise. BlackBerry’s worldwide smartphone market share is under 1%, according to data from research firm International Data Corporation, far less than Apple’s hold on about 12% of the market. BlackBerry’s market share was a far more sturdy 13.6% just three years ago, signifying just how quickly things can turn sour for a smartphone maker when it falls out of favor.

BlackBerry is hoping to change all that with the launch of its 4.5-inch square-shaped Passport, touting the device’s larger screen and apps geared to professionals that have defected to other devices. As Fortune reported last month, BlackBerry is hoping government, finance and health care workers will find the device’s unorthodox dimensions ideal for their work.

The device is off to a fairly decent start, according to CNET, which reports 200,000 BlackBerry Passport smartphones have been ordered since launch.

Investors have bought into the BlackBerry turnaround story before, only to be burned later when reality set in. The company’s shares rose in the months leading up to the company’s launch of a new operating system, called BlackBerry 10, which was unveiled in 2013. Investors had placed a big bet that plan could work, sending BlackBerry’s [then known as Research in Motion] shares up 59% in the 12 months before issuing quarterly results in June. Disappointing sales of the Z10 phone resulted in shares tumbling some 28%.

This article originally appeared on Fortune.com

TIME Companies

Pimco Founder Bill Gross Quits Firm for Janus Capital

Morningstar Conference With Bill Gross Of PIMCO
Bill Gross, co-chief investment officer of Pacific Investment Management Co., speaks at the Morningstar Investment Conference in Chicago, Illinois, U.S., on Wednesday, June 8, 2011. Tim Boyle—Bloomberg/Getty Images

At Janus, Gross will manage the recently launched Global Unconstrained Bond fund and related strategies.

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This post is in partnership with Fortune, which offers the latest business and finance news. Read the article below originally published at Fortune.com.

By Laura Lorenzetti

Bill Gross, who co-founded Pacific Investment Management, or Pimco, in 1971, will leave his own firm to join competitor Janus Capital.

Gross served as the firm’s chief investment officer and managed the Pimco Total Return fund — one of the world’s largest bond funds with more than $1.9 trillion in securities, according to the company’s website. The fund has not done well for years, though, and has been plagued by huge outflows.

“I look forward to returning my full focus to the fixed income markets and investing, giving up many of the complexities that go with managing a large, complicated organization,” Gross said in a statement.

At Janus JNS -2.71% , Gross will manage the recently launched Global Unconstrained Bond fund and related strategies. He will work in partnership with Myron Scholes and other members of the global asset allocation team.

For the rest of the story, please go to Fortune.com.

TIME Startups

San Francisco and Los Angeles Threaten Crackdown on Uber, Lyft

App Car Service Startups Continue To Irk Traditional Cab Companies And Regulators
A Lyft car drives along Powell Street in San Francisco on June 12, 2014 Justin Sullivan—Getty Images

Prosecutors in California's two biggest cities say the ride-share programs are breaking the law

Correction appended, Sept. 26

Uber, Lyft and Sidecar are under scrutiny by San Francisco and Los Angeles district attorneys, who are threatening legal action against the ride-share companies unless they make major structural changes.

The San Francisco and Los Angeles offices said that a joint investigation found the ride-share companies were in violation of California law and represent “a continuing threat to consumers and the public,” SF Gate reports. They’re threatening to levy civil penalties on the on the companies, but didn’t say what those might be.

The district attorney offices said that the three companies mislead customers by saying their background checks on drivers screen out those with criminal offenses and DUIs — but that in actuality, they don’t. They also said that the shared-ride-service fares that allow separate passengers going the same way to pay their fares separately violate state law.

“We value innovation and new modes of providing service to the public,” San Francisco district attorney George Gascón said in a statement. “However, we need to make sure the safety and well-being of consumers are adequately protected in the process.”

The attorneys also said Uber and Lyft have to be regulated by the California Department of Food and Agriculture’s weights and measures division, which would ensure riders are getting the taxi miles they pay for, and that the two companies don’t have the correct licenses to pick up and drop off passengers at airports.

[SF Gate]

Correction: The original version of this story misstated in the headline the nature of prosecutors’ threat to Uber and Lyft. They threatened civil penalties.

TIME Companies

Gender Diversity Is Flourishing Among Board Nominees, Report Says

Business People in Boardroom
Getty Images

The percentage of women nominated for boards at large U.S. companies has doubled since 2008, according to a new report

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This post is in partnership with Fortune, which offers the latest business and finance news. Read the article below originally published at Fortune.com.

By Tom Huddleston, Jr.

A new study shows that one place where gender diversity seems to be flourishing is on the boards of large U.S. companies.

The report from proxy advisory group Institutional Shareholder Services (ISS), called “Gender Diversity on Boards: a Review of Global Trends,” shows that the number of females among new board nominees at the largest U.S. companies has been steadily climbing in recent years.

In the report, released Thursday, ISS says that in 2014 almost 30% of new board nominees for S&P 500 companies have been women, which is up from just 15% in 2008. For Russell 3000 companies this year, women make up 22% of all new board nominees, which also doubles those companies’ 2008 tally of 11%. The numbers come from ISS QuickScore data, which keeps track of director traits, such as gender and tenure, at 4,100 companies in 25 markets.

The number of sitting directors who are women has not increased at such a rapid rate as the number of nominees, however. On average, women currently make up 18.7% of the boards at S&P 500 companies, which is up from 16.3% in 2011. Still, the increased number of women among the pool of nominees seems to indicate a commitment to improving gender diversity at the top of large U.S. companies, according to the report’s author, Edward Kamonjoh.

While women still make up less than 20 percent of U.S. boards on average, movement toward greater gender parity is evident with the proportion of new nominees that are women nearly doubling over the past seven years at larger firms,” Kamonjoh said in a statement. “Investors’ calls for greater gender diversity appear to be nudging nominating committees to find more women to serve on boards at U.S. firms.”

For the rest of the story, please go to Fortune.com.

TIME Companies

Startup Founders Explain Why Their Startups Fail

The top reason? They make products no one wants

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This post is in partnership with Fortune, which offers the latest business and finance news. Read the article below originally published at Fortune.com.

By Erin Griffith

When the founder of a startup company shuts down her or his business, it is customary to pen an essay that tells the rest of the community what went wrong, called a failure post-mortem. It’s estimated that nine out of 10 startups fail, which is why the technique has become so common as to be a Silicon Valley cliché. Some of these essays are honest, enlightening, and brave. Others point fingers or issue backward non-apologies. Medium, the publishing platform co-founded by Twitter co-founder Evan Williams, is the preferred medium.

The proliferation of the failure post-mortem has helped create a bizarre cult of failure that seems wrong-headed. Celebrating failure (“Fail fast” goes the mantra) seems to let people off the hook for bad behavior. Upon closer inspection, it seems less misguided than necessary. Starting a high-growth business is a roller coaster. Founder-CEOs feel pressure to keep up the facade of success, even when things are actually falling apart behind the scenes. Only recently, after the tragic suicide of Jody Sherman, CEO of a startup called Ecomom, did the technology community begin to publicly acknowledge the problems with its “entrepreneur as hero” narrative. Publicly admitting to failure, and examining it, can take guts. It also distills the narrative to a case study from which other entrepreneurs can learn.

CB Insights recently parsed 101 post-mortem essays by startup founders to pinpoint the reasons they believe their company failed. On Thursday the company crunched the numbersto reveal that the number-one reason for failure, cited by 42% of polled startups, is the lack of a market need for their product.

That should be self-evident. If no one wants your product, your company isn’t going to succeed. But many startups build things people don’t want with the irrational hope that they’ll convince them otherwise.

For the rest of the story, please go to Fortune.com.

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