Tencent-backed news aggregation app Qutoutiao files for U.S. public offering

Qutoutiao, a news aggregator app backed by Tencent, has filed for an initial public offering of up to $300 million in the United States. In its F-1 form, the company, whose name means “fun headlines,” said it is the number two mobile content aggregator in China. Its main rivals are Jinri Toutiao, China’s top news aggregator, Tencent’s Kuaibao and Yidianzixun.

Based in Shanghai, Qutoutiao reportedly reached unicorn status in March, when it raised a Series B of about $200 million led by Tencent. For Tencent, Qutoutiao and Kuaibao represent opportunities to take market share away from Jinri Toutiao, which is owned by ByteDance. ByteDance is reportedly planning a Hong Kong IPO that could value it at over $45 billion.

In its SEC filing, Qutoutiao said that since launching in July 2016, it has achieved monthly average users of about 48.8 million and daily average users of about 17.1 million, with the average time users spend on the app each day totaling about 55.6 minutes in July 2018. To compete with Jinri Toutiao and other rivals, Qutoutiao targets users from China’s smaller Tier 3 cities. Despite increasing levels of disposable income, Qutoutiao says Tier 3 cities, many of which are located in the west of China, are still underserved markets.

Qutoutiao also said in its filing that its net revenues increased from RMB 58.0 million (about $8.8 million) in 2016 to RMB 517.1 million (about $78.1 million) in 2017, and from RMB 107.3 million (about $16.2 million) in the six months ended June 30, 2017 to RMB 717.8 million (about $108.5 million) in the same period in 2018.

The app uses an AI-based content recommendation engine to display articles and videos based on user profiles and plans to use money raised from its IPO to add more content offerings, increase monetization opportunities and look for acquisition and investment opportunities. Qutoutiao plans to list on Nasdaq under the ticker symbol QTT. The IPO will be underwritten by Citigroup Global Markets, Deutsche Bank Securities, China Merchants Securities and UBS Securities and KeyBanc Capital Markets.

6 million users had installed third-party Twitter clients

Twitter tried to downplay the impact deactivating its legacy APIs would have on its community and the third-party Twitter clients preferred by many power users by saying that “less than 1%” of Twitter developers were using these old APIs. Twitter is correct in its characterization of the size of this developer base, but it’s overlooking millions of third-party app users in the process. According to data from Sensor Tower, six million App Store and Google Play users installed the top five third-party Twitter clients between January 2014 and July 2018.

Over the past year, these top third-party apps were downloaded 500,000 times.

This data is largely free of reinstalls, the firm also said.

The top third-party Twitter apps users installed over the past three-and-a-half years have included: Twitterrific, Echofon, TweetCaster, Tweetbot and Ubersocial.

Of course, some portion of those users may have since switched to Twitter’s native app for iOS or Android, or they may run both a third-party app and Twitter’s own app in parallel.

Even if only some of these six million users remain, they represent a small, vocal and — in some cases, prominent — user base. It’s one that is very upset right now, too. And for a company that just posted a loss of one million users during its last earnings, it seems odd that Twitter would not figure out a way to accommodate this crowd, or even bring them on board its new API platform to make money from them.

Twitter, apparently, was weighing data and facts, not user sentiment and public perception, when it made this decision. But some things have more value than numbers on a spreadsheet. They are part of a company’s history and culture. Of course, Twitter has every right to blow all that up and move on, but that doesn’t make it the right decision.

To be fair, Twitter is not lying when it says this is a small group. The third-party user base is tiny compared with Twitter’s native app user base. During the same time that six million people were downloading third-party apps, the official Twitter app was installed a whopping 560 million times across iOS and Android. That puts the third-party apps’ share of installs at about 1.1 percent of the total.

That user base may have been shrinking over the years, too. During the past year, while the top third-party apps were installed half a million times, Twitter’s app was installed 117 million times. This made third-party apps’ share only about 0.4 percent of downloads, giving the official app a 99 percent market share.

But third-party app developers and the apps’ users are power users. Zealots, even. Evangelists.

Twitter itself credited them with pioneering “product features we all know and love,” like the mute option, pull-to-refresh and more. That means the apps’ continued existence brings more value to Twitter’s service than numbers alone can show.

Image credit: iMore

They are part of Twitter’s history. You can even credit one of the apps for Twitter’s logo! Initially, Twitter only had a typeset version of its name. Then Twitterrific came along and introduced a bird for its logo. Twitter soon followed.

Twitterrific was also the first to use the word “tweet,” which is now standard Twitter lingo. (The company used “twitter-ing.” Can you imagine?)

These third-party apps also play a role in retaining users who struggle with the new user experience Twitter has adopted — its algorithmic timeline. Instead, the apps offer a chronological view of tweets, as some continue to prefer.

Twitter’s decision to cripple these developers’ apps is shameful.

It shows a lack of respect for Twitter’s history, its power user base, its culture of innovation and its very own nature as a platform, not a destination.

P.S.:

twitterrific

Incentivai launches to simulate how hackers break blockchains

Cryptocurrency projects can crash and burn if developers don’t predict how humans will abuse their blockchains. Once a decentralized digital economy is released into the wild and the coins start to fly, it’s tough to implement fixes to the smart contracts that govern them. That’s why Incentivai is coming out of stealth today with its artificial intelligence simulations that test not just for security holes, but for how greedy or illogical humans can crater a blockchain community. Crypto developers can use Incentivai’s service to fix their systems before they go live.

“There are many ways to check the code of a smart contract, but there’s no way to make sure the economy you’ve created works as expected,” says Incentivai’s solo founder Piotr Grudzień. “I came up with the idea to build a simulation with machine learning agents that behave like humans so you can look into the future and see what your system is likely to behave like.”

Incentivai will graduate from Y Combinator next week and already has a few customers. They can either pay Incentivai to audit their project and produce a report, or they can host the AI simulation tool like a software-as-a-service. The first deployments of blockchains it’s checked will go out in a few months, and the startup has released some case studies to prove its worth.

“People do theoretical work or logic to prove that under certain conditions, this is the optimal strategy for the user. But users are not rational. There’s lots of unpredictable behavior that’s difficult to model,” Grudzień explains. Incentivai explores those illogical trading strategies so developers don’t have to tear out their hair trying to imagine them.

Protecting crypto from the human x-factor

There’s no rewind button in the blockchain world. The immutable and irreversible qualities of this decentralized technology prevent inventors from meddling with it once in use, for better or worse. If developers don’t foresee how users could make false claims and bribe others to approve them, or take other actions to screw over the system, they might not be able to thwart the attack. But given the right open-ended incentives (hence the startup’s name), AI agents will try everything they can to earn the most money, exposing the conceptual flaws in the project’s architecture.

“The strategy is the same as what DeepMind does with AlphaGo, testing different strategies,” Grudzień explains. He developed his AI chops earning a masters at Cambridge before working on natural language processing research for Microsoft.

Here’s how Incentivai works. First a developer writes the smart contracts they want to test for a product like selling insurance on the blockchain. Incentivai tells its AI agents what to optimize for and lays out all the possible actions they could take. The agents can have different identities, like a hacker trying to grab as much money as they can, a faker filing false claims or a speculator that cares about maximizing coin price while ignoring its functionality.

Incentivai then tweaks these agents to make them more or less risk averse, or care more or less about whether they disrupt the blockchain system in its totality. The startup monitors the agents and pulls out insights about how to change the system.

For example, Incentivai might learn that uneven token distribution leads to pump and dump schemes, so the developer should more evenly divide tokens and give fewer to early users. Or it might find that an insurance product where users vote on what claims should be approved needs to increase its bond price that voters pay for verifying a false claim so that it’s not profitable for voters to take bribes from fraudsters.

Grudzień has done some predictions about his own startup too. He thinks that if the use of decentralized apps rises, there will be a lot of startups trying to copy his approach to security services. He says there are already some doing token engineering audits, incentive design and consultancy, but he hasn’t seen anyone else with a functional simulation product that’s produced case studies. “As the industry matures, I think we’ll see more and more complex economic systems that need this.”

Messaging firm Line launches a dedicated crypto fund

Messaging company Line is continuing to burrow deep into the crypto space after it announced the launch of a $10 million investment fund.

The fund will be operated by Line’s Korea-based blockchain subsidiary Unblock Corporation, which is tasked with research, education and other blockchain-related services. The fund will be called Unblock Ventures and it’ll initially have a capital pool of $10 million but Line said that is likely to increase over time.

The company said the fund will be focused on early-stage startup investments, but it didn’t provide further details.

Line is listed in Tokyo and on the NYSE. This fund makes it one of the first publicly traded companies to create a dedicated crypto investment vehicle. The objective, it said, is “to boost the development and adoption of cryptocurrencies and blockchain technology.”

Line claims nearly 200 million users of its messaging app, which is particularly popular in Japan, Taiwan, Thailand and Indonesia. The company also offers a range of connected services that include payment, social games, ride-hailing, food delivery and more.

This marks Line’s second major crypto move this year following the launch of its BitBox exchange last month. It isn’t available in the U.S. or Japan right now but Line envisages closes ties with its messaging service and other features further down the line.

These moves into crypto come despite some serious downturn in the valuation of the space this year following record highs in January which saw the value of one Bitcoin touch nearly $20,000 and Ethereum, among others, surged. In the months since then, however, many cryptocurrencies have seen their valuations decline. This week, Ethereum dropped below $300 in what is its first major price crisis. Bitcoin has, for many years, risen and fallen although January’s valuations took the extremes to a new level.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Tweetbot loses several key features ahead of Twitter’s API change

Twitter’s API changes won’t come out until tomorrow, but its ramifications are already being felt. Tapbots released an update today to Tweetbot for iOS that loses many of the Twitter client’s most popular or essential features. It also removed its Apple Watch app. In Tweetbot’s App Store release notes, Tapbots explained “on August 16th Twitter will disable parts of their public interface that we use in Tweetbot. Because Twitter has chosen not to provide alternatives to these interfaces we have been forced to disable or degrade certain features. We are sorry about this, but unfortunately this is totally out of our control.”

The changes mean that Tweetbot’s timeline streaming is now disabled, so timelines will refresh every one to two minutes instead–a loss for people who want to see new tweets in real-time. Push notifications for Mentions and Direct Messages will also be delayed by a few minutes, while push notifications for Likes, Retweets, Follows and Quotes have been disabled altogether (Tapbots’ release notes say they are looking at how to reinstate some of those in the future). Tweetbot’s Activity and Stats tabs have been removed.

As part of an effort to tighten control over how its services are used by third-party developers, Twitter announced in April 2017 that it will shut down User Streams, Site Streams and other APIs to prepare for the arrival of its new Account Activity API and other products.

Other third-party Twitter clients that will likely be affected by the API changes include Twitterific, Tweetings and Talon, which along with Tweetbot protested in April that they hadn’t been given enough time or information to prepare for the release, which was originally schedule for June 19. In response, Twitter extended the deadline to August 16. Other apps that have already been impacted include Favstar, which went offline in June as a result of the API changes.

Bendy™ in Nightmare Run – TheMeatly Games, Ltd

TheMeatly Games, Ltd - Bendy™ in Nightmare Run artwork Bendy™ in Nightmare Run
TheMeatly Games, Ltd
Genre: GamesAdventureArcadeEntertainment
Release Date: 2018-08-15
© ©2018 Joey Drew Studios Inc.

China’s Didi beefs up its newly-independent car services business with an acquisition

A week after spinning out its driver services business and giving it $1 billion in investment capital, Didi Chuxing has added to it through an acquisition.

Xiaoju Automobile Solutions (XAS), which the Didi spinout is called, announced today it has bought Hiservice, a three-year-old company that provides after-service care for car owners using a digital platform.

The deal was undisclosed, but XAS said that Hiservice will be combined with its maintenance and repair division to form a new unit that’s focused on car-owner services such as maintenance, parts and components. That’ll be called Xiaoju Auto Care (小桔养车) for those of you who are keeping up with the names of these Didi subsidiaries.

That auto care business will be jointly run by Yinbo Yi, who had run Didi’s auto care business, and Hiservice founder Cheng Qian, Didi confirmed. The new business claims 28 physical maintenance centers across seven cities in Asia.

Didi’s move to create XAS, which removes an asset-heavy business from the core Didi books, is seen by many as a sign that the company plans to go public soon. Unsurprisingly, Didi isn’t commenting on that at this point. The company was last valued at $56 billion when it raised a $4 billion round late last year — it has since added a $500 million strategic investment from travel company Booking Holdings.

While it is organizing its China-based business, Didi has also spent this year expanding into new markets. It has launched in Mexico, Australia and Taiwan while it acquired Uber rival 99 in Brazil. It is also edging close to launching a taxi-booking service in Japan via a joint venture with SoftBank.