A blog about business and economics.

May 1 2015 12:29 PM

Companies Are Now Making Bicycle Helmets and Mattresses Foldable

This post originally appeared in Inc.

Last week Lee Moreau, a principal at Continuum, a global design and innovation consultancy, retweeted the photograph of a foldable sneaker design: 


As it happens, this foldable, compressible sneaker—potentially capable of shipping flat, as Moreau points out in his tweet—fits a pattern of design emerging in other consumer-product categories. 

For instance, the Morpher bicycle helmet, a smash hit on Indiegogo, folds in half when it's not on your head. It can fit inside a laptop bag. Even startups in the e-commerce mattress space design their products so they can be compressed or folded to fit inside shipping boxes used by UPS and FedEx. Talk about a logistics miracle.

The Morpher bicycle helmet is designed to fold in half when not in use.

Photo by Morpher via IndieGoGo

As you can imagine, this compression or foldability is crucial to the startups' business models; indeed, the core principle of most e-commerce business models is that it's cheaper to ship things directly than it is to pay rent for commercial retail space.

Of course, some products are more cumbersome to ship than others. For both Casper and Tuft & Needle, to pick two prominent online mattress startups who sell more than $1 million worth of mattresses each month, an ongoing effort is finding new efficiencies in the shipping process. "It's a very involved process, and it's a lot harder than people realize," says Tuft & Needle's head of operations, Evan Maridou. 

For example, one key to a foam mattress's comfort is the density of the foam. But when something is dense, "it can only be compressed so much" in the shipping process before the product is compromised, Maridou explains. 

What follows for the e-commerce mattress makers is something of a twofold design challenge. First and foremost is the already complex task of designing a comfortable mattress. Secondarily, but also a must-have is designing a way to make the mattress eminently shippable. Otherwise, you have no business.

Tuft & Needle's mattress boxes used to be 44 x 19 x 19 inches. Now they are 44 x 16 x 16. The company aims to reach 40 x 16 x 16. Tuft and Needle has also changed the way it fits the mattresses inside the boxes. The Phoenix-based startup, founded in 2013, used to fold its mattresses. Now it performs what Maridou calls "a horizontal lateral compression," which amounts to squishing the mattress evenly and rolling it up.  

Of course, the history of consumer goods is filled with examples of companies who've gained an advantage by designing products for convenient shipping. "Isaac Singer's first sewing machines came in wooden crates," notes Matthew Bird, a professor at the Rhode Island School of Design who is an authority on the history of industrial design. 

One century later, Ikea's flat-packed tables came along, ushering in an era of of products "that take up little space till you get them," says Bird.

Isaac Singer's first sewing machines were designed on wooden crates for convenient shipping.

Photo by

As a historian in this field, Bird has a knack for finding fresh and surprising examples of folding and compression in the design of consumer products. One of his favorites is Barbie's New Dream House, designed for Mattel by Gordon Shireman in 1964. It folded up into a suitcase you could carry with a handle. When you unfolded it, it became a colorful, multiroom ranch house with furniture and a terrace. 

For Moreau, the designer who retweeted the self-folding sneaker, the intrigue in products like this is not only the folding or compressing, but the way they fit in with what designers call the process of self-assembly. 

He saw the self-folding sneaker at a conference sponsored by MIT's Self-Assembly Lab, which defines self-assembly like this: 

Self-Assembly is a process by which disordered parts build an ordered structure through only local interaction. In self-assembling systems, individual parts move towards a final state, whereas in self-organizing systems, components move between multiple states, oscillate and may never come to rest in a final configuration.

Self-assembly is, to a degree, what happens when your compressed or folded mattress arrives and you remove it from the box. The mattresses inflate to full size and usability within minutes. What ensues is an a-ha moment, where customers marvel at the product's ability to self-assemble. Customers of both Casper and Tuft & Needle have recorded these unboxings on YouTube, where they make convincing product testimonials—even though the customers have not yet slept on their new mattresses. 

Moreau points out that—by the truest definition—the process of self-assembly does not end once a consumer unboxes an item. In an ideal system of self-assembly, a product and its constituent materials continue to adapt and shape-shift based on interactions in their local environment. 

In other words: Imagine a future where a sneaker—rather than experiencing wear and tear over time—actually morphs and evolves to benefit the user based on the way she wears it and interacts with it. "It would create a greater and closer relationship to the user if we could embed adaptability of a product into the material," Moreau explains.

"We talk about this adaptability in digital design all the time," he adds. "But can we apply it to clothing and footwear? Now that's exciting."

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May 1 2015 11:56 AM

Music-Streaming Site Grooveshark Gets Sued Out of Business

Grooveshark, the music-streaming site that first popped up in the mid-2000s and once boasted 35 million users, has been sued out of business. On Thursday, the company announced it was shutting down after failing to secure licenses for the music it hosted. “That was wrong. We apologize. Without reservation,” the company wrote in a statement on its otherwise blank website.

Under the terms of a settlement reached with Universal Music Group, Sony Music, and Warner Music Group, Grooveshark said it has agreed to “cease operations immediately, wipe clean all of the record companies’ copyrighted works and hand over ownership of this website, our mobile apps and intellectual property, including our patents and copyrights.” Should Grooveshark violate its agreement, its parent company, Escape Media, could owe the record labels $75 million.


Grooveshark joins Napster and LimeWire on the list of once-popular music services that were eventually sued out of existence by big record companies. The demise of those operations, and particularly of Grooveshark, is striking compared with the success of modern streaming services like Spotify. In many ways, Grooveshark was a precursor to Spotify—unlike Pandora and other online radio stations, Grooveshark allowed users to select specific songs and create playlists from its music repository.

Spotify, perhaps learning from streaming sites before it, has taken pains to keep its service legal. In January, it publicized the fruits of those efforts: 15 million paid subscribers and 60 million total users. And all that without Taylor Swift.

April 30 2015 5:41 PM

LinkedIn Had a “Solid” First Quarter, but Its Stock Is Collapsing

LinkedIn kicked off 2015 with a “solid quarter” filled with “meaningful progress,” Chief Executive Jeff Weiner told investors on Thursday. The company's stock is plummeting.

Shares of LinkedIn are getting hammered in extended trading after the company slashed its revenue forecast for the second quarter. Shortly after the closing bell, shares lost more than 20 percent, or roughly $65 in value. They’re currently off about 19 percent for an after-hours price of around $200. LinkedIn’s stock closed down approximately 2 percent to $252.13 for the day’s regular session.


For the first quarter of 2015, Weiner wasn’t wrong—LinkedIn did just fine. Earnings came in at $0.57 per share, which was in line with what analysts had predicted. Revenue rose 35 percent to $638 million, slightly topping forecasts for $637.8 million.

But the company’s second-quarter guidance spooked Wall Street. LinkedIn said it expects revenue to finish between $670 million and $675 million next quarter, as opposed to a predicted $718 million. Steve Sordello, LinkedIn’s chief financial officer, said on the earnings call that the lowered guidance reflects changes in foreign exchange rates, adjustments to company operations, and the costs of acquiring, an education and skills development site for professionals.

LinkedIn last closed below $200 a share in October 2014.

April 30 2015 4:27 PM

Is the Lost Generation of Law School Graduates Still Lost?

The class of law school students who graduated immediately after the Great Recession is sometimes referred to as the industry's lost generation, thanks to the barren job market that left so many young J.D.'s struggling to find work. Of course, 2010 and 2011 weren't really a great time for anybody in the United States. But the legal business seemed to be experiencing a special sort of meltdown, with big firms laying off droves of young lawyers and rescinding offers to new recruits. Both because it appeared that law firms might be suffering a permanent correction—shrinking after having grown too quickly, too fast during the good times—and because firms tend to hire entry-level talent straight out of school, there was a sense that those whose careers had been derailed by the downturn might never recover.

So what happened next?


Deborah Merritt, a professor at Ohio State University's Moritz College of Law, recently attempted to answer that question. Using public sources such as court records, law firm websites, and LinkedIn, she gathered current employment information on the vast majority of new law grads who passed the Ohio Bar Examination in 2010. She then compared those figures with national jobs data on the class of 2010 gathered the year after they finished law school.

Her working paper, featured in a New York Times article this week, comes to the discouraging conclusion that the lost generation is, in fact, still lost. In February 2011, 68 percent of all law grads were working in positions that required a law degree. In December 2014, that number had only reached 75 percent. That, Merritt writes, compares poorly with the national class of 2000, which also graduated into a recession thanks to the dotcom bust. By 2003, 85 percent of that group had found its way into a career in which a J.D. was necessary, and 62 percent were employed at law firms. Only 40 percent of Ohio's class of 2010 are now at firms. They are also almost twice as likely to work as solo practitioners, who often barely scrape by financially. Merritt argues that this is a sign that the legal job market has indeed contracted for good and that there won't be a sudden surge of new hiring to soak up excess graduates.  

Unfortunately, Merritt's paper has some large warts. Most noticeably, she's trying to trace how the market has changed over time by comparing the lot of lawyers in Ohio today with the employment stats of all new law grads nationwide in 2010. While Merritt tries to argue that Ohio is a decent barometer for the country's legal industry as a whole, her stand is not entirely convincing. Among other issues, Ohio has a lot of low-ranked law schools, and many of its most talented grads don't stay in-state; they head to centers of the legal industry, like nearby Chicago, instead.  

But while Merritt's work doesn't necessarily prove that a permanent change has occurred, it does tell us that in a large American state, a great number of newly minted lawyers aren't finding work in the field for which they trained, and are often clinging to the industry's lowest paid rungs.

Michael Simkovic, a law professor at Seton Hall, and Frank McIntyre, an economist at Rutgers Business School, offer a more upbeat perspective on the present-day value of a law degree. Their previous work, which has become a touchstone for the legal academy's defenders, has shown that, historically, even relatively low-paid J.D.'s earn enough compared with mere bachelor's holders to make law school a financially worthwhile investment. One reason is that, even law grads who work in other fields, such as business or public policy, tend to get a nice salary bump compared with people who ended their educations after college. Does that change if they graduate into a recession where jobs are scarce? According to their newest paper, the answer is no. In the past, earning a law degree has been a profitable decision even for people who graduated into a bum economy.

But Simkovic and McIntyre's work has its own shortfalls. the data set they rely on doesn't include any individuals who graduated after 2008. And while they point out census figures that suggest the typical earnings advantage for young lawyers—at least those who have jobs—hasn't eroded over time, their work doesn't definitively tell us that everything is A-OK for the class of 2010 or 2011. Moreover, it's silent on whether those students would have been better off perhaps chasing an MBA rather than devoting three grueling years to studying contracts and torts.

Thanks to their focus on salary data, Simkovic and McIntyre are also a bit blind to the emotional and psychological toll that J.D.'s sometimes pay when they fail to find careers as actual lawyers. Some people happily parlay their legal education into a rewarding job in government or business without ever actually practicing law. But some who get frozen out of the industry are clearly unhappy about it, even if they're well-compensated. Take Jonathan Wang, a 29-year-old class of 2010 Columbia Law School alum Elizabeth Olson profiled in her NYT piece. Wang is currently working as an LSAT tutor, which is more or less a nightmare scenario for most students. On the other hand, he's making "over $100 an hour," meaning he could easily be making six figures. By Simkovic and McIntyre's metrics, his law degree looks like a solid choice, given that relatively few mere B.A. holders under 30 earn that much.

But then, here's how Wang describes his life today:

“I thought the LSAT tutoring gig was going to be a temporary thing, but five years and one bar admission renewal later, here I am,” he said. ... “I waffle constantly, but I’m still in the mind-set that I need to find a real job."

Sounds pretty lost to me.  

April 30 2015 2:14 PM

Here’s How Uber Hopes to Convince India Its Service Is Safe

Of Uber’s many image battles, its fight in India has been among the most difficult. Last December, Uber was banned in India’s capital after one of its drivers allegedly raped a female passenger. The incident sparked widespread anger toward Uber, which critics said had failed to implement adequate safety measures like strict background checks for drivers. Uber resumed service in New Delhi in late January after announcing that it had increased its safety requirements. According to government officials, though, the company has remained blacklisted in the capital.

A few months later, Uber is taking another stab at convincing Indian regulators and riders alike that its service is, in fact, safe. The company on Thursday said that an alert feature it began testing in February is in the process of being deployed across cities in India. The so-called SOS button is designed for the “rare event of an emergency while on an Uber ride,” the company says on its blog. The alert button appears for riders in the upper-right corner of Uber’s app. When pushed, it connects the rider to local police and also sends out a real-time alert with the rider’s info, driver’s info, and GPS location. All that data is then “projected on a dedicated screen in the control room of local law enforcement,” Uber explains, which “enables the police to act within seconds of being alerted.”

What happens when an Uber rider hits the SOS button.



As Uber continues its quest for global ride-hailing domination, India is crucial to win. The country is Uber’s largest market outside of the United States in terms of cities covered and has a radio taxi market worth an estimated $6 billion to $9 billion. Uber, which has raised heaps of funding for a valuation that tops $40 billion, has been upfront about the importance of capturing foreign markets, especially in India and other Asian countries. In a blog post at the end of 2014, Uber CEO Travis Kalanick noted that a then-recent $1.2 billion funding round would help the company make “substantial investments, particularly in the Asia Pacific region” in the coming year. Earlier this month, Uber also launched an autorickshaw service in New Delhi that lets users pay their fares in cash to better compete with Ola, a local rival and India’s biggest online cab-booking company.

Despite its efforts to win over consumers and politicians in India, Uber’s regulatory future there remains uncertain. The company notched a big victory in mid-January when Kolkata, one of its fastest-growing cities, passed ride-hailing-friendly rules. Earlier this month, on the other hand, local news outlets reported that the government was weighing a nationwide ban of all mobile ride-hailing apps—Uber and Ola included. Uber didn’t immediately respond to a request for comment, but it seems pretty clear that its efforts with the new SOS button are designed to improve safety and, in doing so, to stave off just such an India-wide ban. In that way, you might say it’s Uber’s own kind of SOS.

April 29 2015 5:28 PM

The Latest Combatant in the War on Coal: General Motors?

Coal has problems in America. As a fuel for generating electricity—its main use—coal is being displaced by cheaper natural gas. New regulations on emissions are encouraging utilities to shut down huge numbers of coal plants. And because of its externalities—the messy business of mining, the negative health effect of emissions, the ugly visuals of soot and smoke—lots of organizations, companies, and institutions are trying to figure out how to rely less on coal. Or, like Georgetown, Texas, or Stanford University, not use it at all.

Now, it seems another large historical user of power is attempting to boycott the direct use of coal at the facilities it controls. But this time, it’s not a government or a do-good nonprofit institution. No, it’s one of America’s largest enterprises, the largest manufacturer of vehicles, the proprietor of dozens of plants that consume lots of power to bend, shape, and fuse metal, a profit-seeking behemoth that symbolizes the nation’s industrial strength: General Motors.


“None of our U.S. plants use coal as an energy source,” Rob Threlkeld, GM’s global manager of renewable energy said in a statement earlier this week.

Now, this is not to say that GM is not using any electricity that is derived from coal. Rather, GM, like other big industrial companies, has historically generated a lot of electricity and steam at its own facilities and plants. And in recent years, GM has engineered coal out of the mix of fuels used to run those on-site powerhouses. “We’re saying that our direct use of coal in our powerhouse facility has ended,” said Sharon Basel, communications manager for environment and energy at GM.

General Motors hasn’t always been a leader in the shift to a low-carbon economy. It famously killed an electric vehicle a few decades ago. In 1981, it briefly introduced a car that could run on coal dust. Its main entry into the hybrid-electric derby—the Volt—is barely selling. GM’s business, which is thriving, rests overwhelmingly on selling cars that run on fossil fuels.

But over the last several years, the company has quietly, and effectively, moved to reduce the emissions associated with manufacturing cars. And it has done so for all the usual corporate reasons: to be a good global citizen, to get ahead of regulation, to make its brand look better, and to cut costs where possible.

One of the best ways to reduce emissions is to stop burning coal, and to use more renewable power. So GM has put huge solar arrays on top of and adjacent to factories in Ohio and Michigan. It made a deal to turn Detroit municipal waste into steam, which will help power one of its Detroit-area plants. In February, it struck a deal to use the output of a wind farm in Mexico to power operations there. Captured landfill gas—which is regarded as a renewable resource—provides about 43 percent of the electricity used at the company’s Fort Wayne Assembly Plant, which is one of the nation’s largest on-site generators of electricity. Such investments have enabled the company to retire all the on-site boilers that used to burn coal. General Motors is already 87 percent of the way toward its goal of using 125 megawatts of renewable energy generating capacity by 2020. (Here’s GM’s 2013 Sustainability Report.)

Of course, renewables account for about 12 percent of the company’s total energy use. GM still purchases a huge amount of power from the electrical grids in the areas in which it operates. And a decent chunk of that juice is produced at coal-burning plants in the Midwest and elsewhere. So GM is still indirectly using coal for power. But thanks to a combination of its own efforts—and the efforts of utilities to replace coal with natural gas—it is using less coal with each passing month. And it’s no longer buying the material directly. It may be a symbolic move, but it's a telling one.  And it's another sign that procurement is becoming a form of corporate social activism.

April 29 2015 11:46 AM

An iPad App Glitch Forced American Airlines to Ground Dozens of Flights

American Airlines grounded a few dozen flights Tuesday night after a software issue with pilot iPads prevented planes from taking off. “Some flights are experiencing an issue with a software application on pilot iPads,” Andrea Huguely, a spokeswoman for American Airlines, told the Verge. “In some cases, the flight has had to return to the gate to access a Wi-Fi connection to fix the issue.” American Airlines also acknowledged the glitch via Twitter:

Here’s a bit more from the Verge:

[Bill] Jacaruso, 54, was traveling home to Austin from Dallas/Fort Worth airport on flight AA1654 with his wife, Toni, and his beagle, Masita. “We got on the plane and it was supposed to leave at 8:20PM CT. We got on at 8 and just sat there,” he tells the Verge. The pilot got on the intercom after a while and said that his copilot’s iPad went blank, then 24 minutes later the pilot’s went blank too, according to Jacaruso.
The pilot then announced to Jacaruso’s plane that all iPads on 737s were affected. About 45 minutes later, the pilot came back on to say, “It looks like it’s not just 737s, it’s random, but no one's going anywhere til we figure it out.”

In 2013, American Airlines became the first major commercial airline to use iPads in all stages of its flights. The new “electronic flight bag” phased out a 35-pound bundle of reference material that pilots used to carry in their bags, replacing some 24 million pages of paper documents altogether. At the time, American Airlines said the transition would save at least 400,000 gallons of fuel a year.

The iPad glitch comes just a few weeks after the U.S. Government Accountability Office warned in a report that in-flight passenger Wi-Fi could make certain planes’ navigation systems vulnerable to hackers. Last week, the FBI and Transportation Security Administration alerted airlines that they should watch out for any signs of tampering or suspicious activity on the networks. With that in mind, seeing a bunch of iPads suddenly go blank looks like a pretty good reason to keep flights on the ground.

The headline of this piece has been modified to clarify that it was a third-party app glitch, not a glitch in the iPad's software, that led American Airlines to ground flights.

April 29 2015 7:55 AM

Millennials Are Still Pretty Cheap

The annoying thing about making sweeping predictions about the future is that sometimes it takes a while to figure out whether you were right.

A few years ago, I co-wrote an article with Derek Thompson for the Atlantic titled “The Cheapest Generation.” It argued that for a whole host of reasons—the scarring legacy of the recession, student debt, the influence of mobile tech, and a growing preference for urban living over cul-de-sac suburbs and exurbs—millennials were probably never going to buy as many houses or cars as their Baby Boomer parents or Generation X. We weren't forecasting the death of all suburbs or the extinction of the American automobile. However, given the way financial and social forces had aligned themselves, it seemed inevitable that the young adults of 2012 would ultimately spend more modestly—and less often—on these twin pillars of U.S. living. 


Last week, Derek decided to recant. Sort of. "Inconveniently, reality is messing with our prediction," he wrote. The impetus was an article from Bloomberg, based on data from J.D. Power and Associates, which reported that car sales to millennials were surging as the economy improved and young adults moved to the suburbs, far away from decent public transit. Gen Y—which J.D. Power defines to include anybody born between 1977 and 19941—bought more than twice as many cars and trucks in 2014 than it did in 2010 and now makes up 28 percent of the new vehicle shoppers, up from 18 percent.


Jordan Weissmann

These stats, combined with the fact that young adults are still migrating to Sun-Belt suburbs, have led Derek to conclude that he and I "failed to anticipate the fierce undertow of the status quo” when it comes to how Americans travel and where they nest.

With all due respect to my old partner, I'm not so sure. Millennials are still pretty cheap. That might change. It might not.  

Let's start with a little car talk. In our original piece, Derek and I noted that "in 2010, adults between the ages of 21 and 34 bought just 27 percent of all new vehicles sold in America, down from the peak of 38 percent in 1985." Unfortunately, we relied on data compiled by a company that recently closed after its founder and lead analyst passed away. Worse yet, I haven't been able to find any comparable statistics that would let us compare today's car market with sales 30 years, or even a decade, ago.


Jordan Weissmann

Still, the information we have does not obviously show that young adults are falling back in love with cars. Yes, millennials are purchasing more vehicles now than they did in the aftermath of the recession. Part of that is due to the improving economy. But some of it is just the result of Gen Y getting older. The 17-year-olds of 2010 are now entering their prime car-buying years. Take those former minors out of the math, and you'll see that adult millennials don't make up much more of the market than they did five years ago. According to J.D. Power, the share of cars bought by Americans between the ages 25 and 34 only rose from 16 percent to 18 percent.


And it might not have risen at all. According to R.L. Polk & Co., 25-to-34-year-olds purchased a smaller percentage of all new cars than in 2010.

Why the discrepancy? It may have to do with data sources—J.D. Power relies on information it gathers directly from dealers, while R.L. Polk scrapes info from new car registrations. The important thing, though, is that the market trend is kind of murky.

Here's something that is clear, however. Once you adjust for population size, millennials were about 29 percent less likely to buy a new car or truck last year than members of Gen X or the Baby Boomers, according to City Observatory.2 It's possible that gap will shrink with time. But until more millennials are fully employed and living under their own roofs, rather than with their parents, we simply won't know for sure what their appetite for sedans and pickups will be. As Lacey Plache, the chief economist at told me, "It's only the last couple of years that we've seen the kinds of changes that would lead people to buy cars. You really just can't tell if they want to."

So that's cars. What about houses? Well, the homeownership rate among Americans under 35 is at its lowest point since at least 1994, and falling (see table 19). And while it's true that young adults are still generally moving out of cities and into suburbs (see table 15), that's not the case everywhere, or among every segment of the under 40 population. Big cities, for instance, are booming, and young college graduates are becoming somewhat more urban, even as their less educated (and likely less wealthy) peers shift to the 'burbs. We may not be headed for a future where everybody rents an apartment in a dense pedestrian's paradise. But there may be more renting, and at least some cities where a growing number of families settle down in part because they can take the bus to work instead of commuting through traffic.

Again, I'm not suggesting that millennials are about to completely scramble the American way of life. But we could be getting ready to see significant changes at the margins that will still effect industries like home-builders and automakers. Back in 2012, we wrote, “If the Millennials are not quite a post-driving and post-owning generation, they’ll almost certainly be a less-­driving and less-­owning generation.” As of now, I'm still willing to bet that will be true. At least, I'm not ready to admit I was wrong.

1 That's a slightly unusual definition, but whatever.

2 If you once again cut out the youngest Millennials from the picture, the gap does shrink a bit; 25-to-34-year-olds were about 19 percent less likely to buy a new car or truck compared with Gen X or the Baby Boomers.

April 28 2015 4:49 PM

Twitter’s Stock Just Crashed, Thanks to These Tweets

Twitter shares crashed 18 percent in their final hour of trading on Tuesday after the company’s first-quarter earnings—a broad-based miss—leaked early. Financial-intelligence firm Selerity is being credited as first to take note of the earnings leak, which it broadcast to the rest of the world, ironically, on Twitter:

Trading was briefly suspended around 3:30 p.m. and once it reopened Twitter’s stock promptly nosedived. The company went ahead and posted Q1 results on its website, and Selerity followed up to state that the early earnings information had been sourced directly from the investor-relations portion of Twitter’s website. “No leak. No hack,” Selerity tweeted.


So on to the results! Twitter’s revenue rose 74 percent over the previous year, to $450 million, and the company reported a net loss of $162 million. Average monthly active users, a metric that analysts watch closely, were in line with expectations at 18 percent growth to 302 million, but the numbers for mobile monthly active users missed estimates. (Twitter, for what it’s worth, would contest that monthly active users are in fact a poor measure of its reach; its recently redesigned homepage intends to draw in Internet wanderers who are interested in the site’s content but might not have an account.)

Twitter’s earnings release also included two announcements about new ad-related ventures. The company acquired TellApart, a firm that specializes in personalized marketing, and has partnered with Google’s DoubleClick to help direct-response marketers. Twitter attributed its disappointing first-quarter revenue figures to “a lower-than-expected contribution” from direct-response products. Twitter is likely hoping that TellApart and DoubleClick will help change that.

After hours, Twitter’s stock is actually up about 2 percent, presumably as investors have absorbed all of the earnings information and moderated their initial reaction. Still, not a great day for the company, whose shares closed at $42.27 after opening at $51.66. Execs are expected to break down the quarter on the company’s earnings call at 5 p.m. Maybe they’ll address what happened with the earnings leak, too.

April 28 2015 2:42 PM

PayPal Just Made Your Online Impulse Purchases Even Easier

Venmo is a small slice of PayPal’s business, relatively speaking, but it still accounts for a tremendous amount of transactions. In the fourth quarter of 2014, Venmo posted a total payment volume of $906 million, up 29 percent from the previous quarter and nearly half of the $2.4 billion it processed that whole year. There are, of course, lots of factors that explain Venmo’s success, but one of the most important is the app’s simplicity. Paying a friend on Venmo requires only a few steps: Find the person, fill in the transaction amount and reason, tap to pay, tap to confirm, and voilà!

Now it looks like PayPal wants to bring that same simplicity to its main product, announcing on Tuesday that its “One Touch” payments system will be made available to PayPal’s 165 million customers on all platforms. One Touch simplifies the user experience so that instead of filling out a bunch of payment details and personal information on each transaction, you simply sign in, review the specific purchase or charge, and then click OK to confirm. An estimated $4 trillion worth of purchases will be left sitting in online shopping carts in 2015. With One Touch, PayPal is hoping that completing the transaction may finally be easier than abandoning it.


One Touch rolled out to native mobile apps last fall and, since then, has led to major sales increases for merchants, PayPal says. The best comparison to One Touch might be an Amazon account. Sign into Amazon and a seemingly endless amount of merchandise becomes available to purchase with a few clicks. Of course, the features that make online payments most convenient are also often the ones that make them the least secure. The social ease and simplicity of Venmo also renders it more vulnerable to fraud and so-called social engineering attacks. But what’s also true is that people largely seem to prefer “frictionless” systems to highly secure but cumbersome ones. And at any rate, PayPal One Touch isn’t quite one-touch simple. If we're being technical about it, there are two clicks involved.