TechSummit Rewind #031: July 2, 2015

Editor’s Note: This is the TechSummit Rewind, a recap of the top technology headlines.

PayPal acquires Xoom for $890 million

PayPal logo

PayPal has acquired digital money transfer service Xoom for roughly $890 million, or $25 a share.

Xoom allows users to send money online or from mobile devices worldwide. Last year, the company had roughly $159 million in sales. As of Wednesday, Xoom had a market cap of roughly $800 million.

Through this deal, PayPal will be able to reach 68 million active US customers. Over 1.3 million active customers made money transactions worth about $7 billion last year through Xoom, according to PayPal.

Xoom will remain a standalone service after the acquisition.

“Acquiring Xoom allows PayPal to offer a broader range of services to our global customer base, increase customer engagement, and enter an important and growing adjacent marketplace. Xoom’s presence in 37 countries – in particular, Mexico, India, the Philippines, China, and Brazil – will help us accelerate our expansion in these important markets.”

-Dan Schulman, PayPal president

Chicago’s ‘cloud tax’ makes streaming services more expensive


A new “cloud tax” has taken effect in the city of Chicago targeting online databases and streaming entertainment services.

The new tax is composed of two recent rulings from the city’s Department of Finance: one covering “electronically delivered amusements” and another covering “nonpossessory computer leases.” Each one takes an existing tax law and extends it to place an extra nine percent tax on certain online services. The first ruling would cover streaming media services like Netflix and Spotify, while the second would cover remote database or computing platforms like Amazon Web Services or Lexis Nexis. Under the new law, $100 of server time in Springfield would cost $109 in the Windy City.

Netflix is already planning to add the tax to its costs charged for its Chicago customers, according to the company.

“Jurisdictions around the world, including the US, are trying to figure out ways to tax online services. This is one approach.”

-A Netflix representative

“I could do that same activity of research using books or periodicals without being taxed, so it does seem like I’m being picked on because I chose to do it online.

“There’s no question that the city needs revenue and I can see where things are escaping the old tax base. I think the objectionable part is that, instead of drafting new laws for that, we’re simply stretching the new laws to fit.”

-Michael Wynne, Reed Smith partner

Black people mistakenly called gorillas by Google Photos

Google Photos

Google’s Photos app has mistakenly tagged two black people as “gorillas,” according to web developer Jacky Alcine.

“We’re appalled and genuinely sorry that this happened. There is clearly a lot of work to do with automatic image labeling, and we’re looking at how we can prevent these types of mistakes from happening in the future.”

-A Google spokeswoman

The gorilla tag appeared in the app’s search function. When users start a search, Google suggests categories developed from machine learning, the science of training computers to perform human tasks like labeling. The company has removed the gorilla categories, so they will no longer appear.

“We need to fundamentally change machine learning systems to feed in more context so they can understand cultural sensitivities that are important to humans.

“Humans are very sensitive and zoom in on certain differences that are important to us culturally. Machines cannot do that. They can’t zoom in and understand this type of context.”

-Babak Hodjak, artificial-intelligence startup Sentient Technologies chief scientist

Xiaomi sold 34.7M smartphones in first half of 2015


Chinese smartphone maker Xiaomi has confirmed that the company sold 34.7 million phones in the first half of 2015.

The five-year-old company sold 61 million handsets last year, bringing in about $12 billion in revenue.

“Even with the China smartphone market slowing down, we did a stellar job of posting a 33% growth on last year’s numbers. It can be said that we outperformed the market and produced an excellent report card.”

-Lei Jun, Xiaomi co-founder, CEO

In particular, six of Xiaomi’s handsets have sold 10 million units to date – the Mi 2, Mi 3, Redmi, Redmi Note, Mi 4, and Redmi 2.

MasterCard will approve purchases by scanning your face


This fall, MasterCard will start experimenting with a program that approves online purchases with a facial scan.

At checkout, you’ll be asked to hold up your phone and snap a photo.

“The new generation, which is into selfies … I think they’ll find it cool. They’ll embrace it.”

-Ajay Bhalla, MasterCard enterprise safety and security president

Currently, customers can set up “SecureCode,” which requires a password when shopping online to stop credit card number stealing hackers from using your card on the Web. The program was used in three billion transactions last year, according to the company.

MasterCard will launch a pilot program that uses fingerprints and facial scans. It’ll be a limited experiment that involves 500 customers, but MasterCard does plan to launch it publicly once it works out the kinks.

To pull this off, MasterCard has partnered with smartphone makers like Apple, BlackBerry, Google, Microsoft, and Samsung.

Apple Music is $2 per month in India – 80% cheaper than in US

Apple Music

In the US, Apple is charging monthly fees of $10 for an individual Apple Music account, and $15 for a family account that can be shared with up to six people. In poorer countries like India, that price point is much lower.

In India, Apple Music is $2/month for individuals and $3/month for families. In Brazil, Indonesia, and Thailand, it’s $5/month and $7/month respectively. In Hong Kong, it’s $6/month and $10/month, and $7.50/month and $11/month in Singapore.

San Francisco creating city office to enforce Airbnb law

San Francisco

San Francisco will open the Office of Short Term Rental Administration and Enforcement, a six-person, one-stop shop to streamline host registrations and investigate violators. At the same time, the city has started a new enforcement wave, sending violation letters to 15 hosts for allegedly turning 73 residential units into full-time hotels.

“No city in America or the world has [created a department to handle short-term rentals].”

-Tony Winnicker, senior advisor to San Francisco mayor Edwin Lee


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