Acqui-Hires: Established Companies Look to Start-Ups for Fresh Talent

  • Flailing tech start-ups typically have two options: watch money dwindle as they try to become the next big thing or close up shop and go to work for the big guys.
  • “Acqui-hires” are now becoming common place in Silicon Valley where established technology companies are buying up small start-ups for around $3 million to $6 million to bring their software-engineering talent on board.
  • “Now, with tech start-ups proliferating because of the relatively low cost of getting off the ground, desperation for software talent has moved even small and midsize tech companies to make acqui-hires,” the Wall Street Journal reports.
  • The upside is increased salaries for these coveted engineers and a cohesive team for the big companies. But the downfalls can weigh pretty heavily.
  • “Accepting an acqui-hire offer not only sidelines an entrepreneur’s dreams, but it typically results in negligible, or even zero, returns for the start-up’s investors,” the article explains. “Moreover, the products and services it took long days and nights to create either cease to exist or are folded into the acquirer’s portfolio. Any employees who aren’t software engineers may be left without jobs.”
  • There are also certain catches, like requirements to stay on as an employee for a few years in order to retain offered stocks. “Other forms of compensation might be clawed back as well, and founders might be required to sign noncompete agreements prohibiting them from engaging in the same business for a specified period after leaving the acquirer,” the article states.
  • But even with these setbacks, sometimes the competitive industry can prove even more tough on struggling start-ups. “This is often the alternative to liquidating and sending your résumé out,” says John Coyle, a law professor at the University of North Carolina.

Google to Acquire Photo App Snapseed: New Mobile Competition?

  • Google has agreed to acquire German developer Nik Software, which produces multiple apps for photographers, most notably the iOS app Snapseed.
  • “The $4.99 app won Apple’s coveted iPad App Of The Year award in 2011 for its inventive multitouch photo editing interface, and gained over nine million users during its first year on sale,” The Verge reports. “Nik Software also sells Snapseed for Mac and Windows, and the company is apparently working on an Android app as well.”
  • Sources say the Nik Software team devoted to Snapseed will relocate to Google’s Mountain View headquarters to work on Google+.
  • Although Snapseed hasn’t seen the same traction as Instagram, the app could be integrated into the Google+ mobile app, which “would instantly put [Google+] on par with Facebook and Instagram’s mobile photo-editing capabilities,” the post suggests.
  • “We want to help our users create photos they absolutely love, and in our experience Nik does this better than anyone,” wrote Google+ senior VP Vic Gundotra in a blog post.

Topshop Launches Shoppable Livestream for London Fashion Week

  • Global high street retailer Topshop is offering London Fashion Week fans across the world a livestream of the event and adding social features that allow viewers to interact with the stream and related products.
  • “Viewers will not only be able to click on clothes and accessories to browse color options in real-time, they’ll also be able to change the music, download the show soundtrack from iTunes, snap screenshots to share instantly on Facebook (a feature that was developed with in-house Facebook engineers), cut and share video clips, and order looks and makeup appearing on the catwalk,” Mashable reports.
  • The concept is not entirely new. Burberry has been offering a livestream/shopping experience since 2010 with “elaborate staging” and “panning shots,” the post explains.
  • One exciting feature of Topshop’s new social entertainment and commerce venture is getting the fashion to consumers faster. “Makeup will arrive within 48 hours in the 100+ markets Topshop.com ships to; clothes and accessories will ship in six to eight weeks, well ahead of their January arrival in stores,” the post states. “Topshop will be tracking early purchases to decide how much product to stock in store come January.”
  • “In addition to Topshop.com, the livestream will also be broadcast on large screens at its Oxford Circus flagship in London, the websites of 200+ media partners and pinned to the top of its Twitter page, though it will lack the aforementioned add-ons in all of the latter places,” Mashable writes.

Apple iPhone 5 Breaks Sales Records During First Day of Pre-Orders

  • Apple’s iPhone 5 sold more than two million units on its first day of pre-orders, doubling the sales record of the iPhone 4S.
  • “Despite widespread leaks rendering Apple’s latest flagship announcement a somewhat less exciting event than it perhaps could have been, it doesn’t seem that many purchasing decisions were affected,” reports The Verge.
  • “AT&T notes that the iPhone 5 has moved more overall units at this point than previous models, too, nullifying any suspicions that possible supply constraints may have accounted for the quick sell-through,” adds the post.
  • AT&T had a great consumer response for the new handset. “AT&T set a sales record with iPhone 5 over the weekend, making it the fastest-selling iPhone the company has ever offered. Customers ordered more iPhones from AT&T than any previous model both on its first day of pre-orders and over the weekend,” the company said.
  • Apple has sold out of its initial stock, which will be delivered by September 21st. Some pre-orders have been delayed two weeks and won’t be shipped until October, according to Apple.

VR Gaming: Oculus Rift Hopes to Succeed Where Others Have Failed

  • A new start-up hopes to change the VR game, providing a rich virtual gaming experience that could set it apart from other early failures.
  • Called the Oculus Rift, this new prototype accrued almost $2.5 million on Kickstarter by selling 10,000 game developer kits worldwide. The project has been backed by “Doom” and “Quake” creator John Carmack and Brenden Iribe, a former Autodesk, Scaleform and Gaikai executive.
  • “The most striking thing about the experience is the sheer depth of the stereoscopic image, which wraps around the field of view without the eye-crossing, headache-inducing out-of-sync effect that sometimes comes with 3D glasses or viewing a head-mounted LCD too closely,” writes Ars Technica.
  • “The creators told me that this is a result of the Rift’s optics… Those optics also help improve the Rift’s resolution where it’s needed most, increasing the functional pixel density in the center of the view, where your eyes naturally rest, while decreasing it on the periphery.”
  • The creators have focused on providing “incredibly smooth” head tracking, hoping to eventually get the refresh rate down to single digit milliseconds from 15-30 milliseconds by the time final consumer units are ready. Iribe says this refresh rate enables games to run faster than the current 60 frames per second, “which would lead to a noticeable improvement in the realism of the world the Rift immerses you in,” the article states.
  • The costs for small, thin, high-resolution, hi-def screens have gone down with the mobile expansion. This enables Rift to offer improved screens at a reasonable price. The team is also working to reduce the weight to make the device more comfortable and wearable.
  • Ars Technica did note that the games still require controllers for navigation. The team hopes developers will create new control schemes for the Rift.

CNET Blogger Suggests Android Has Nothing to Fear from iPhone 5

  • “In the near few months, Apple will see sales of its iPhone soar, and in record numbers. In the longer term, Android will not be affected all that much and we’ll likely see the platform pulling closer to 60 percent market share or greater,” writes blogger Scott Webster for CNET.
  • “Less expensive phones, more hardware options, and a wider variety of carrier options will see that Android continues its growth. In other words, it’s the same today as it was in 2009.”
  • Although he admits that the iPhone 5 adds some noteworthy improvements to Apple’s handset line, “there’s nothing in the iPhone 5 that puts it far above the competition,” Webster suggests. “The larger 4-inch display and 4G LTE connectivity are two of the biggest, and only improvements over last year’s model, yet it’s still a matter of catching up to the industry. Android users have enjoyed these features in one capacity or the other for the better part of two years now.”
  • Apple has already seen a drop in the smartphone market share, but still continues making record profits. Unlike previous iPhone launches where Apple “was able to extend its reach to new markets, carriers, and consumers… there’s very little room to grow and tap into a new segment of customer,” notes Webster.
  • On the other hand, other smartphones are becoming more competitive with rich features, improved interfaces and low price tags, the post states, noting that Android phones even offer things that the new iPhone 5 doesn’t, like NFC support or quad-core processors.
  • “I didn’t see anything that would send an Android handset maker scrambling to respond,” Webster concludes. “Along those lines, I’m hard-pressed to find someone who saw something in the iPhone 5 that will have them defect from Android.”

Apple Sells Out Initial iPhone 5 Inventory After One Hour of Preorders

  • Despite early mixed reviews of the iPhone 5, Apple reportedly sold out its initial inventory of the new handset within an hour of preorders opening.
  • The device is set to launch September 21, but after an hour of accepting preorders, Apple’s website explained to customers that new orders would be available to ship in two weeks.
  • Carriers are also taking orders for the new iPhone, but so far have not changed their shipping dates, suggesting they may still have sufficient inventory for the demand.
  • The iPhone 5 is an expensive endeavor for carriers and some have experienced a dip in revenue projections. Apple, on the other hand, saw its stock again soar to a new record, $696.98.
  • “The iPhone 5 is critical to Apple’s continued success,” the Wall Street Journal reports. “Not only have the phones powered Apple to become the world’s largest company by value, they have become the bedrock of the company’s mobile-device strategy. Software in the iPad tablet computer is shared with the iPhone, largely intertwining the fate of both devices.”
  • “Apple is charging $199 for the cheapest iPhone 5 if customers sign up for a new two-year contract with their carriers,” notes the article, adding the rollout is Apple’s most aggressive to date, with plans to reach 100 countries by the end of the year. “The company is also selling a version of its year-old iPhone 4S for $99. The iPhone 4, launched in 2010, is being offered free.”

Product Review: Test Driving Heads-Up Google Glass with Sergey Brin

  • Wall Street Journal reporter Spencer E. Ante met with Google co-founder Sergey Brin to try out Project Glass, the augmented reality glasses that have drawn a lot of media attention and recently graced the runway at a Diane von Furstenberg fashion show.
  • “The glasses were ultimately disappointing because the software isn’t finished,” Ante reports. “Much of the basic functionality that Google is building toward for the first commercial release later next year wasn’t working.” However, “I could see their long-term potential,” he adds. “The device fit well.”
  • Google Glass uses a battery on the side of the frame to power a tiny camera and “heads-up display” that projects data into the user’s field of vision via a small screen over the right eye. “It was cool to see the information there in front of my right eye, though a little disorienting. I kept closing my left eye, which was uncomfortable,” Ante writes.
  • He notes that taking pictures without pulling out his smartphone was a nice feature, one that Brin frequently uses when playing with his kids.
  • “I have always disliked the feeling that with technology I am spending a lot of my time and attention managing it,” Brin told WSJ. “The notion of seamlessly having access to your digital world without disrupting the real world is very important.”
  • The project still has a long way to go before it is fully functional and ready for next year’s initial release to “hard-core fans who shelled out $1,500 on pre-order.”
  • In addition to lowering the cost, Ante wants to see Google make the software open to developers in order to build apps.
  • “We definitely like to make things open but right now we are working hard and fast to make something reliable we can get in the hands of users and developers,” Brin said. “I expect lots and lots of people will be using technology like this in years to come.”

Silicon Beach: Apps Can Help the Little Guy Break into Entertainment

  • “The opportunity now for anybody on a connected platform to build a business to compete with the big guys is just amazing,” says Andrew Stalbow, North American general manager for ROVIO.
  • At the Silicon Beach conference at USC, Stalbow discussed how the playing field has been leveled, enabling anyone to build a worldwide brand quickly, just as ROVIO’s “Angry Birds” took off across the globe.
  • Although most associate ROVIO with the widely-adopted “Angry Birds” app, “we don’t want to be a mobile games company,” Stalbow notes. “I think we’re an entertainment company.”
  • He explained that games are at the core of what they do, just as movies are at the core of Disney. But like Disney, which has built out theme parks and retail and more, ROVIO has many other aspects to its business, such as consumer products, retail and animation.
  • He also said that the company has built itself on a business model of ubiquity. He criticized the Hollywood business model for being built around scarcity, saying it is “very challenged” with rights and window schemes. “I think the business model needs to evolve,” he suggests.
  • “The power of these new connected devices hasn’t really been realized yet,” believes Stalbow, suggesting there is opportunity in the entertainment industry to more efficiently use new media.
  • Moreover, these connected devices and new platforms can create a new forum for marketing. “In an app ecosystem, you’re actually connected [to your fans],” he says. “The people who create the content and control it will have the opportunity to tell their audience about their other [ventures].”
  • Stalbow contrasts this environment to that of the traditional entertainment industry in which content is provided or distributed by third-party channels.
  • ROVIO spends nothing on marketing, Stalbow claims. Instead, it leverages its apps and other products to inform its customers about the company’s various offerings. Also, working with NASA for its “Angry Birds Space” app or Disney for its “Rio” app, allowed for a cross-pollination of promotion, showing how one can use media in new ways to push a brand.

Silicon Beach: Hollywood Talks Content Revolution and New Distribution

  • From TV ratings to what happens to your digital content when you are gone, panelists at USC’s Silicon Beach conference discussed how media distribution is changing — and how Hollywood is tackling those changes.
  • YouTube’s Mitch Feinman, Qualcomm’s Liz Gasser, Mitch Singer of Sony Pictures and David Wertheimer of Fox Broadcasting talked about where they see entertainment heading.
  • One obvious change has been the decline of physical media as VOD and online services have taken away the friction of renting from brick-and-mortar stores. People have also moved away from building libraries of physical media while not entirely trusting the purchase of digital media stored in the cloud.
  • Hollywood’s UltraViolet initiative looks to dispel consumers’ concerns about the cloud and meet the demand for content in this digital world.
  • Wertheimer discussed multiplatform products that inherently incorporate various content — long and short form video, TV programming, interactive media, etc. — instead of merely having one type with supplementary adds-ons. “What kind of new storytelling experiences can we create with new technology?” he asks.
  • Feinman spoke about YouTube’s focus on making multi-screen viewing seamless by allowing devices to interact with one another. Similarly, Gasser talked about connectivity and how devices are moving beyond communicating with users and other devices — to interacting with real world places and things. Such a revolution requires people to rethink how content is owned and managed, she suggests.
  • This topic will surely be debated in the coming years as people reevaluate ownership and licensing rights, Singer points out, adding that related laws will need to be revisited.
  • The panelists also discussed how software and user interfaces have become more important than the hardware itself, in addition to the benefits and challenges of an a la carte distribution model.
  • Still, one thing remains true. “All the technology in the world has not changed the fundamental premise: people want to watch great content,” Wertheimer concludes.

Silicon Beach: The Creative Reinvention of Entertainment Media

  • Social media continues to revolutionize communication, while technology enables more sophisticated electronic devices, and media consumption is being rewritten by new distribution methods.
  • Aber Whitcomb, CTO for the Social Gaming Network, and Drew Baumann, CTO of the YouTube-oriented business Fullscreen, spoke about these changes — and how Los Angeles is where it all comes together.
  • According to Baumann, Silicon Beach is the place for media technology companies. The more established media companies in the area are intrigued by new technology-powered media ventures.
  • There is an assumption that technology comes from Silicon Valley and entertainment from Hollywood, Whitcomb agrees. But actually, there is a convergence of the two spheres, even more so in Silicon Beach.
  • The norm today is to “consume content on multiple screens and people expect to be able to do that,” Whitcomb notes of the new distribution philosophy. This also applies to gaming; his company works to provide seamless transitions between devices and platforms.
  • “The media business has been around for a hundred years, but it’s evolving,” Baumann explains. Brands and media companies are awesome at creating content, but don’t really know how to use new distribution methods, like YouTube, to their full potential.
  • “The video distribution business is really being disrupted right now and I’m excited to see what new businesses it creates,” he says.
  • Both panelists believe this is an exciting time to be in the industry, especially in Silicon Beach — even though the next chapter is difficult to predict.

Silicon Beach: Young Entrepreneurs Catch the Wave in Los Angeles

  • Media professionals gathered at USC yesterday for the all-day Silicon Beach conference.
  • Sandy Gould, vice president of recruitment at the Disney-ABC Television Group, and Kevin Winston, founder of Digital LA, spoke about how Silicon Beach in southern California is changing the professional environment and approach to entrepreneurship.
  • We’re accustomed to a stiff corporate structure, but “now we live in a time when actually we should be driving the change,” Gould notes.
  • No longer are job titles or responsibilities static, he suggests. Flexibility is really important in applying for jobs as well as pitching entrepreneurial ideas — “go where the opportunity is strongest.”
  • “It’s a great time to experiment with what you want to do,” Winston agrees. While flexibility is key, commitment is also very important. “Follow up, see your passions though,” he recommends, adding that you shouldn’t hold off on pushing your idea forward. “Get it done; people want to see that you’re committed.”
  • The intersection of entertainment and technology makes Silicon Beach a great place for start-ups, the panelists said. Los Angeles is open to creativity and flexibility in addition to having big names that can boost your start-up’s reputation.
  • Also, with the expansion of digital and social media, “there’s so much more capability, power and influence in the hands of the community,” Gould points out. This makes sharing your idea and creating a user base easier. Established companies are leveraging the power of community to shape their own ideas — for example, using public forums to aggregate ideas for show episodes.
  • The panelists talked about the universal value of telling your story — of being able to excite people about your ideas or yourself. “You have to have passion in what you do, have creativity in an idea and then tell people what you do,” recommends Winston.

Innovative Visual Effects House Digital Domain Files for Bankruptcy

  • The Digital Domain Media Group won an Oscar for its reverse-aging special effects in “The Curious Case of Benjamin Button,” worked on the 3D transformation of “Titanic” and awed audiences with its hologram performance of the late Tupac Shakur earlier this year.
  • Despite its impressive resume, the special effects company has filed for bankruptcy after its shares fell 94 percent from a peak in May.
  • “Digital Domain’s financials have long been a concern,” CNN reports. “Since the company was typically hired by Hollywood studios on a contract basis, its revenue stream was pretty small. Digital Domain expressed hope recently that expanding the virtual performer business beyond Tupac would be lucrative, as it would be able to get a cut of the ticket sales for such events.”
  • This June, the company’s debt outweighed its assets by $9 million. With a court’s approval, private investment firm Searchlight Capital Partners will acquire Digital Domain’s core production business for $15 million.
  • Digital Domain had teamed up with Lionsgate to produce a film based on the popular sci-fi novel “Ender’s Game,” to be released November 1, 2013. Regardless of the company’s bankruptcy filing, “the postproduction work remains on schedule,” a Lionsgate representative said. “We’re confident that we will release the film as planned.”

Nielsen Report Suggests Significant Shifts in Television Viewing Habits

  • An estimated five million homes don’t get traditional TV service, but according to a new report from Nielsen, 75 percent of those homes still own a television.
  • “The company’s report shows how the nature of TV service is slowly changing,” Yahoo writes. “Before the percentage started declining about three years ago, more than 99 percent of TV homes received the traditional TV signals. Now that has dipped just below 96 percent.”
  • Instead of traditional TV, consumers are using their television sets for content on various platforms like DVDs, Netflix and Apple TV.
  • “During the first three months of 2012, the average consumer spent about 2 percent less time watching traditional TV than the previous year, Nielsen said. They more than made up for that by spending more time watching material recorded on DVRs or on the Internet through TVs, computers and mobile devices,” the article states.
  • The switch is in part attributed to economic difficulty. Nielsen said it may redefine “what it considers a television household to include people who get service through Netflix or similar services instead of the traditional TV signals,” explains Yahoo.
  • The report also found that the average consumer spends 14 minutes a day using game consoles, often for watching video; also, people of 65 years or more spend 48 hours a week watching TV compared to the 22 hours that 12- to 17-year-olds spend weekly.

Cybernoids Live2D Enables Interactive 3D Animation of 2D Images

  • Live2D aims to take your 2D drawings and render them in 3D. Developed by Cybernoids, the technology “makes the graphics appear exactly as the creator intended,” according to the company’s CEO Tetsuya Nakajo.
  • “You can also use the tools to work more easily and efficiently. This can be done in all kinds of ways, with all kinds of emphasis, depending on what the creator wants to do,” notes Nakajo. “This technology is an extension of drawing, so it works best if the creator has a good artistic sense.”
  • The tools support “content creation using either polygons or vectors,” DigInfo TV writes. “A 3D engine is used to power the polygon-based version, so it can achieve fast, fluid motion even on mobile devices.”
  • Live2D is available across various portable consoles and smartphones. For now, the technology is mostly used for games with limited movement, but Cybernoids aims to provide 360 degree animations in the future.
  • “We’re aiming for this technology to be used worldwide, hopefully creating a market for revolving graphics in 2D, like with 3D. So, our goal is for this technology to become a de facto standard worldwide,” Nakajo says.