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Monday, December 16, 2013
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Patch screenshot

TechCrunch has learned that AOL is closing down Patch, even though CEO Tim Armstrong said just last week that the company was looking at ways to save the hyper-local news service. We’ve contacted AOL and Patch for more information.


If Patch is shuttered for good, that represents a significant blow for Armstrong, who has nurtured the site as a pet project since launching it in 2007 while he was still at Google. AOL bought Patch in 2009 after Armstrong became its CEO. (TechCrunch is also part of AOL’s media portfolio).


As recently as last week, Armstrong was still defending Patch’s future, calling it “an asset with optionality” at a UBS conference on Dec. 11. His claims were thoroughly mocked by media observers (Media Bistro said his remarks were “Office Space-worthy,” while Ad Age’s Alex Kantrowitz wrote that Armstrong should have said “option with assanality.”) Armstrong claimed that Patch might be able to remain afloat an impending partnership with an undisclosed company, though it appears now that negotiations fell through.


They day before the UBS event, Patch co-founder and AOL exec Jon Brod announced that he was leaving the company early next year. Brod stepped down as Patch CEO in spring and was most recently heading AOL Ventures.


During the conference, Armstrong also defended Patch by saying that it has “more digital traffic than a lot of traditional players have,” echoing statements made by CFO Karen Dkystra during AOL’s conference call last month.


Dkystra hinted that the company was going to take several measures to save Patch, including cost-cutting in its “lowest-performing areas,” as well as “product enhancements.”


Despite AOL’s promises to save Patch, Dkystra’s statements were yet more signs that Patch was struggling to achieve profitability despite a large round of layoffs that began in August and resulted in about 400 people, or 40% of Patch’s workforce, losing their jobs.


In August, TechCrunch’s Alex Wilhelm ran estimates on Patch’s revenue that showed the site still had a shot at reaching profitability this year after its mass layoffs. Alex wrote that “assuming full layoffs, $75,000 per day in average sales not discounting for weekends, and strong ‘other’ income that AOL has repeatedly mentioned as possible, Patch could make financial sense.”


At the same time, there were signals that Patch was not going to hit those targets. Memos leaked by a Patch staffer revealed that Jim Lipuma, head of U.S. ad sales for Patch, said that the site “amassed [its] worst results of the year” over five days in August. Lipuma added “we had a $36K day yesterday, when we needed to be having $100K+ days. I understand why yesterday happened, but we cannot settle for days like this going forward.”


Patch’s failure to thrive has cost AOL an estimated $300 million (though the company claims that figure is closer to $200 million). Armstrong’s reputation has also taken a blow, most notably when he impulsively fired Patch’s creative director Abel Lenz for taking a photo at a meeting, an “emotional response” that he later apologized for. Armstrong’s attachment to Patch also helped trigger a proxy fight in 2012, when hedge fund Starboard Value L.P ran for three seats on AOL’s board while questioning Patch’s viability.


Armstrong won the proxy battle, but it was one of the factors that led to AOL selling $1.1 billion patents to Microsoft in April 2012 in order to placate disgruntled investors. In an earnings call after the patents sale, Armstrong told shareholders that he planned to make Patch profitable by the end of 2013, a goal that appears to have been unsuccessful.







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Sunday, December 15, 2013
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Jeff Smith

You hear about graduate students who drop out to found startups, but I guess that would be too easy for Jeff Smith. He co-founded and serves as CEO at Smule, the startup behind social music apps like Ocarina and Magic Piano. At the same time, he recently received a Ph.D. in computer-based music theory and acoustics from Stanford.


Smith and I spoke earlier this week about being a full-time graduate student and a startup executive (not to mention the father of three children) since 2008. One of the questions that we kept dancing around during our conversation was: Why the heck did he feel the need to do this?


Apparently that’s a question that came up at Stanford, too. Smith recalled that during his Ph.D. qualifying exam, a committee member asked him, “Why are you here?” Smith had to admit that he wasn’t interested in teaching or becoming an academic researcher. So why?


“I’m really interested in music,” Smith said. “I want to study music. I want a formal program.”


You wouldn’t think that Smule’s investors weren’t thrilled about Smith’s academic commitments either, especially since his co-founder Ge Wang is also an assistant professor at Stanford. However, Smith said it was never a serious point of contention — though investors would bring up the issue in an “indirect” way, by asking, “How do you feel about things? Are you committed?”


Board member David Cowan of Bessemer Venture Partners (his other investments include LifeLock, LinkedIn, and Reputation.com) told me that that Smith’s dual careers never gave him pause.


“I’ve backed founders who are bipolar and pregnant and had all kinds of distractions and impairments,” he said. “In general, if I can find an entrepreneur who is brilliant and passionate and honest, we’ll work around the other stuff.”


Cowan added that Smith’s background running a number of other startups (including Tumbleweed Communications, which went public) helped bolster investor confidence — not to mention the fact that Smule is having what Smith called a “transformational year,” setting a sales record of $2.4 million last month.


“That’s one of ways to tapdance around it,” Smith said. “It’s one conversation if things are going poorly, and another conversation if it’s up and to the right.”


Plus, Smith’s Ph.D. research was closely tied to his work at Smule — as he explained it, he looked at large sets of data, including user data from Smule, to understand how cultural differences lead to different styles of musical performances. (His dissertation was titled “Correlation analyses of encoded music performance” and you can read the abstract here and the full thing here.) Smith compared his work to composer Béla Bartók, who did important research into European folk music.


“I wanted to pick up where Bartók left off and see if we could begin to understand culture through a very different lens …. through the lens of art,” he said. “At least as far as the data goes, the answer is yeah, we can.”


For example, Smith said that his dissertation allowed him to analyze the extent to which different types of Western music have permeated China, as you can see in the embedded document below.


Music Viscosity in China


At the same time, I wondered if the research might also undercut the big vision for Smule that Smith and Wang have both laid out for me at different times — that music can be a form of communication that transcends language and culture.


“It’s quite complicated,” Smith said. “There is this universal expression of msuic that we’re seeing across the globe, but there’s a lot more nuance, there’s a lot more diversity of interpretation. It’s

a little less transcendent than I might hope it might be, but there’s still these common things that are binding people together.”


Discovering some of those common things actually allowed Smule to improve its products, he added. One of his findings: When people don’t know a song very well, they tend to play more quickly at the phrase boundaries, something that’s exacerbated in Smule’s Magic Piano app because the app tries to follow the pace of the player. By slowing the app down at those boundaries, Smith said the company saw a significant improvement in how many users would actually complete a song.


And yes, Smith said the time commitment of both roles could be a challenge. Apparently, any free time went to completing his dissertation, and he recalled sitting in the stands of his daughters’ athletic events and typing away (as you can see in the photo at the top of this post). His laptop, he said, was “attached to me wherever I went for a few years” — he was on his computer so often that he started learning special back exercises to deal with the strain. He also took vacations with the goal of getting more work done.


So how did it all turn out? Well, he got his Ph.D., and his professor Jonathan Berger told me in an email that there was “no negative impact on quality of work on either side.”


“Despite my initial trepidation — Smule fueled Jeff’s intellectual pursuits, just as his creativity

as a scholar and composer helped make Smule what it is,” Berger said.


Still, Smith admitted that his choice had its costs.


“At some level this whole thing is irrational, and I concede that it’s not something anyone should do,” he said. “It took a toll. I’m pretty tired.”


And now he might actually have some free time, Smith told me, “I honestly don’t know what I’m going to do with myself.”







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aereo-app

Streaming TV startup Aereo has had a big week. The company agreed to take an arduous legal battle with major network broadcasters into the Supreme Court.


To discuss the move and the growth of the company, we sat down with Chet Kanojia, CEO and founder.


Regarding the decision to move ahead with the Supreme Court, Kanojia expressed that Aereo is fully confident it operates within the law. So far, the company has won out twice as broadcasters pushed for preliminary injunctions, accomplishments that only further validate the company’s position.


A win in the federal courts would put the legality of Aereo to rest, and simultaneously destroy the obstacle posed by Aereo clone FilmOn. FilmOn is currently operating in California and Washington DC, two of the toughest markets for copyright disputes, and has lost lawsuits in both of them. Because FilmOn has claimed to operate in a similar manner to Aereo, Aereo risks being taken down with the ship in those markets.


That said, the decision to push for a federal decision (especially after a few major wins) makes perfect sense.


But Kanojia did admit that the lawsuits were expensive and distracting.


Still, that’s not the reason he gave for slower expansion than promised. At the beginning of the year, Aereo pledged to hit 18 new markets by the end of 2013. A little later, the company extended that promise to 22 markets, but has only gone live in 10 markets over the year.


Kanojia says that Aereo should launch in a few more before the end of January 2014, but that setting high goals is one of the benefits of being a private company.


Instead, it was technical difficulties moving Aereo technology (which has always been used indoors) to rooftops in new markets, as well as the steps to get outdoor-friendly technology regulatory approval.







12:09 PM

Streaming TV startup Aereo has had a big week. The company agreed to take an arduous legal battle with major network broadcasters into the...

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Saturday, December 14, 2013
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China Ping Pong Robot

Why does Google need robots? Because it already rules your pocket. The mobile market, except for the slow rise of wearables, is saturated. There are millions of handsets around the world, each one connected to the Internet and most are running either Android or iOS. Except for incremental updates to the form, there will be few innovations coming out of the mobile space in the next decade.


Then there’s Glass. These devices bring the web to the real world by making us the carriers. Google is already in front of us on our small screens but Glass makes us a captive audience. By depending on Google’s data for our daily interactions, mapping, and restaurant recommendations – not to mention the digitization of our every move – we become some of the best Google consumers in history. But that’s still not enough.


But Google is limited by, for lack of a better word, meat. We are poor explorers and poor data gatherers. We tend to follow the same paths every day and, like ants, we rarely stray far from the nest. Google is a data company and needs far more data than humans alone can gather. Robots, then will be the driver for a number of impressive feats in the next few decades including space exploration, improved mapping techniques, and massive changes in the manufacturing workspace.


Robots like Baxter will replace millions of expensive humans – a move that I suspect will instigate a problematic rise of unemployment in the manufacturing sector – and companies like manufacturing giant Foxconn are investing in robotics at a clip. Drones, whether human-control or autonomous, are a true extension of our senses, placing us and keeping us apprised of situations far from home base. Home helpers will soon lift us out of bed when we’re sick, help us clean, and assist us near the end of our lives. Smaller hardware projects will help us lose weight and patrol our streets. The tech company not invested in robotics today will find itself far behind the curve in the coming decade.


That’s why Google needs robots. They will place the company at the forefront of man-machine interaction in the same way that Android put them in front of millions of of eyeballs. Many pundits saw no reason for Google to start a mobile arm back when Android was still young. They were wrong. The same will be the case for these seemingly wonky experiments in robotics.


Did Google buy Boston Dynamics and seven other robotics companies so it could run a thousand quadrupedal Big Dogs through our cities? No, but I could see them using BD’s PETMAN, a bipedal robot that can walk and run over rough terrain – to assist in mapping difficult-to-reach areas. It could also become a sort of Google Now for the real world, appearing at our elbows in the form of an assistant that follows us throughout the day, keeping us on track, helping with tasks, and becoming our avatars when we can’t be in two places at once. The more Google can mediate our day-to-day experience the more valuable it becomes.


Need more proof? Follow the money. Robotics is big business and analysts estimate that Boston Dynamics could be a $5 billion company in the next few years. With the right contracts and the right product mix, almost any of member Google’s current robot horde can hit nearly any market, from consumer robotics on a large scale to massive installations in manufacturing – not to mention those lucrative DARPA contracts.


Will we see RoboGooglers wandering through Palo Alto this year? No way. It’s far too early. But with a bit of smarts from Google Chauffeur, the software running the company’s self-driving cars, and some better bipedal robot designs I could see Sergey and Larry standing beside their robotic assistants within the decade. Now all they have to do is make them sentient.







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Why does Google need robots ? Because it already rules your pocket. The mobile market, except for the slow rise of wearables, is saturated. ...

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alexcw



The weather outside is frightful, but CrunchWeek is so delightful. So since we’ve no place to go, why don’t you watch the show… that brings three TechCrunch writers together to dish the dirt on the most interesting tech news stories from the past week?

In this episode, Leena Rao, Alex Wilhelm and I talk about the launch of Instagram’s first ever messaging feature called Instagram Direct and the impressive new usage figures announced by Instagram CEO Kevin Systrom, Twitter changing how its blocking feature works (and reverting back to the original block system after a swift public outcry), and Snapchat confirming that it has closed $50 million in a Series C round of funding from New York hedge fund Coatue Management, leaving out the usual Silicon Valley venture capital firms.







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code

This week President Barack Obama rekindled a couple of the Internet’s favorite debates: whether it’s appropriate to take selfies at funerals, and whether everyone should learn to code.


As part of Computer Science Education Week, Obama delivered a YouTube address titled “President Obama calls on every American to learn code.”


“Learning these skills isn’t just important for your future, it’s important for our country’s future,” he said. “If we want America to stay on the cutting edge, we need young Americans like you to master the tools and technology that will change the way we do just about everything.”


The last time we went through this was when New York City Mayor Michael Bloomberg tweeted that he would learn to code as part of Codecademy’s “Year of Code” in 2012, which earned a certain amount of backlash.


“I would no more urge everyone to learn programming than I would urge everyone to learn plumbing,” Discourse co-founder and CTO Jeff Atwood wrote, suggesting that communication skills were at least as important to a well-rounded education as programming. Many other critics complained that you don’t need to learn to build an engine in order to drive a car.


This time around Slate’s Matthew Yglesias complained that far too many people in the U.S. don’t know how to read English, and that spreading actual literacy should be a higher priority than spreading code literacy.


I’m still on the side of pushing code literacy to as many people as possible. If everyone in the country were likely to spend a significant portion of their waking hours using faucets, and Congress was likely to debate bills that had great ramifications for the future of faucet users, then I probably would say that everyone should at least learn the basics of plumbing. And I agree with Douglas Rushkoff, author of Program or be Programmed, that not knowing how to code is more analogous to not only not being able to drive, but being blind folded while you ride. And while we don’t teach all of our high schoolers how to build engines, we do generally teach them the basics of physics and internal combustion as freshman. Likewise, we can’t expect to teach everyone enough programming to build Facebook, but we can make sure as many people as possible have a general idea of how it was built.


But I think we can all agree that learning programming shouldn’t detract from other educational objectives, like reading, writing and math. Fortunately, it doesn’t have to. In fact, it can be combined with other skills.


Mathematics is the most obvious subject to combine with computer programming. Conrad Wolfram — Stephen Wolfram’s brother — is one of the most radical proponents. His organization, Computerbasedmath.org, calls for students to stop doing rote memorization of steps and focus instead on using computers to explore the concepts that underpin those steps.


“Why get students emulating what computers do so much better (computing) rather than concentrate on imaginative thinking, analysis and problem-solving that students ought to be able to do so much better even than today’s computers?” he wrote in a blog post announcing a partnership with Estonia to rewrite the country statistics and probability coursework. But you don’t need to go that far to add a few programming exercises to an algebra or geometry course.


Meanwhile, economics is an elective at most high schools, but it’s probably something more students should learn and it’s another subject that could incorporate some programming lessons. There are already books on programming for college level biology and physics courses, and they could be adapted to fit high school level courses as well.


But it’s not just math and science that can be combined with programming. A class that used SuperCollider or PureData to teach music theory could be a fun and interactive way to learn both programming and music. And Adam Parrish at New York University already teaches creative writing through programming (yes you read that right). He teaches students a bit of Python, and then sets them to work doing stuff like creating algorithmic poetry using the Twitter API.


Where things could get really interesting is combining multiple subjects. My dream course would be one that taught programming, electronics, mathematics, physics and music by having students build, program and play Arduino-based synthesizers.


The big idea here would be to give students early, accomplishable projects. One of the most interesting posts of the week was one by an anonymous blogger titled “People Feel Dumb: That’s Why They Don’t Code.” It’s a big problem: there’s research showing that students who think they can make themselves smarter do better in school. Those who think that they just aren’t smart get left behind. I know from experience that people feel the same way about writing, drawing and other creative endeavors.


One of the best ways to combat the “I’m not smart enough” or “I’m not talented enough” phenomena would be to give students early victories, showing them that they can program or that they can make music or that they can do math — preferably while teaching them something else important along the way.


The hardest part of such a scheme, though, will probably be teacher training. Estonia designed a curriculum to teach computer science in elementary school last year. The first step in bringing the program to life, though, is teaching training. We’d do well to remember that in the U.S.


Photo by Michael Himbeault







1:10 PM

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According to the Wall Street Journal, Twitter is testing a new service called Nearby, which will display geographically local tweets to users, whether they are following the progenitor of the update or not.


The potential privacy impact of Nearby appears to be constrained. As the Journal notes, “Twitter has allowed users to add their location to tweets since 2010. But that feature is turned off by default and must be turned on by the user.” It seems doubtful Twitter would be foolish enough to make location opt-out instead, and then display everyone’s tweets with a Nearby-like fashion sans their explicit permission.


Nearby appears to be a test for the moment, meaning that the chance that you can access it is low. But, do take a look, and post screenshots in the comments.


Recent moves by Twitter to change how its blocking feature worked unleashed a monsoon of complaint from users regarding the potential impact to their privacy, and ability to get rid of those users that they found repugnant. I suspect those same folks would balk at being automatically opted-in to a program such as Nearby.


However, potential foibles aside, the feature could find resonance with local marketers, providing Twitter with a fresh revenue stream to bolster its now-public financials.


It should be noted that the further Twitter strays into the local space, the more pressure that it brings to bear on competitors in that area, such as Foursquare, and perhaps Path. Twitter is a huge player in social, and if it were to throw that heft into local, it could starve advertising dollars from smaller, less well-funded competitors.


And of course, not all experiments live, meaning that Nearby could find a seat on the shelf, and not in your phone. More as we know it.


Top Image Credit: Flickr







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According to the Wall Street Journal , Twitter is testing a new service called Nearby, which will display geographically local tweets to use...

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