Careem acquires Middle East online restaurant listing platform, to trial food delivery

February 18, 2018

DUBAI (Reuters) – Careem, a Middle East competitor to Uber Technologies [UBER.UL], said on Sunday it had acquired RoundMenu and would start trialing food delivery services through the restaurant listing and reservation online platform this month.

The Dubai-based ride hailing firm acquired the website and app for an undisclosed sum.

“Careem will begin testing a delivery capability for RoundMenu customers on a small scale later this month,” it said in a statement to Reuters.

RoundMenu has a presence in 18 cities across nine Arab countries, including Saudi Arabia, the United Arab Emirates, and Egypt, according to its website.

There is demand for delivery services in the Middle East, particularly in the Gulf Arab states where temperatures can soar above 50 degrees in the summer.

Several food delivery companies, including Talabat, Zomato, UberEats, and Deliveroo, are active in the region.

RoundMenu has raised $3.1 million in funding since it launched in 2012, the Careem statement said.

Careem said in June it would accelerate expansion plans after raising $500 million from investors, including German carmaker Daimler and Saudi Arabia’s Kingdom Holding.

In July, it took a minority stake in an Egyptian start-up that connects commuters with private buses in Cairo.

(Reporting by Alexander CornwellEditing by Shri Navaratnam)

Facebook plans to use U.S. mail to verify IDs of election ad buyers

February 17, 2018

By Dustin Volz

WASHINGTON (Reuters) – Facebook Inc will start using postcards sent by U.S. mail later this year to verify the identities and location of people who want to purchase U.S. election-related advertising on its site, a senior company executive said on Saturday.

The postcard verification is Facebook’s latest effort to respond to criticism from lawmakers, security experts and election integrity watchdog groups that it and other social media companies failed to detect and later responded slowly to Russia’s use of their platforms to spread divisive political content, including disinformation, during the 2016 U.S. presidential election.

Facebook revealed the plans a day after U.S. Special Counsel Robert Mueller unsealed an indictment accusing 13 Russians and three Russian companies of conducting a criminal and espionage conspiracy using social media to interfere in the election by boosting Republican Donald Trump and denigrating Democratic candidate Hillary Clinton.

The process of using postcards containing a specific code will be required for advertising that mentions a specific candidate running for a federal office, Katie Harbath, Facebook’s global director of policy programs, said. The requirement will not apply to issue-based political ads, she said.

“If you run an ad mentioning a candidate, we are going to mail you a postcard and you will have to use that code to prove you are in the United States,” Harbath said at a weekend conference of the National Association of Secretaries of State, where executives from Twitter Inc and Alphabet Inc’s Google also spoke.

“It won’t solve everything,” Harbath said in a brief interview with Reuters following her remarks.

But sending codes through old-fashioned mail was the most effective method the tech company could come up with to prevent Russians and other bad actors from purchasing ads while posing as someone else, Harbath said.

Foreign nationals are prohibited under U.S. law from contributing or donating money or anything else of value or making any expenditure in connection with any federal, state or local election in the United States.

The indictment released on Friday laid out in specific detail how prosecutors believe Russians adopted false online personas to push divisive political content, including ads. The Russians also allegedly posed as Americans to stage political rallies in the United States and persuade real Americans to engage in pro-Trump activities.

Harbath did not say when Facebook would begin relying on postcard codes, but said they would be in use before this year’s mid-term congressional elections in November.

A Facebook spokesman declined to provide further details on the plan, but referred to a company blog post from last October announcing plans to roll out more robust identification verification measures for political advertisers.

That blog post did not specify what the verification process would entail.

(Reporting by Dustin Volz; Editing by Damon Darlin and Leslie Adler)

Facebook faces big challenge to prevent future U.S. election meddling

February 17, 2018

By David Ingram and Dustin Volz

SAN FRANCISCO/WASHINGTON (Reuters) – The Russian influence operation designed to tamper with the 2016 U.S. presidential election used a combination of old-school espionage tactics and 21st-century technologies that will not be easy to stop, even now that the methods have been exposed, experts said.

Social media companies, especially Facebook Inc and Twitter Inc , have been under heavy pressure to find ways of stopping what is often referred to as “information warfare” on their services.

The indictment of 13 Russian nationals on Friday, announced by U.S. Special Counsel Robert Mueller, made extensive use of records from Facebook and Instagram, according to people familiar with the matter.

Yet the combination of tactics revealed in the indictment, including the use of shell corporations and stolen IDs, deployment of virtual private networks to avoid online detection, and payments to unwitting Americans, suggests even a company as powerful as Facebook could struggle to stop such activities by itself as they happen.

U.S. spy agencies have said Russia would try to interfere in the 2018 midterm elections, again by using social media to spread propaganda.

“They can’t out of hand stop it, because it’s very difficult for them to trace those things,” said Ann Ravel, a former member of the U.S. Federal Election Commission. The clandestine purchase of advertising on the site through fake personas was particularly alarming, she said.

To know the identities of ad buyers, internet companies might need to duplicate the “know your customer” practices of banks and regularly share information with authorities, Ravel said.

Facebook has said it will start requiring thorough documentation from election-related advertisers to verify their identity and location, beginning with U.S. elections this year.

How extensive that vetting will be is unclear. “If you want to put up a theme page for a group, in the ordinary course you wouldn’t expect that a vendor like Facebook would require that sort of vetting,” said Dan Petalas, a former U.S. federal prosecutor.

“The indictment really details an elaborate scheme that would be difficult to identify,” he said.

Facebook said on Friday it was making “significant investments” to guard against future attacks and was working with the Federal Bureau of Investigation to deter election interference.

The Russians’ alleged campaign began with three weeks of reconnaissance in 2014, when two of them traveled to nine U.S. states, including Colorado and Michigan, according to the indictment. They were equipped with cameras, SIM cards, drop phones and, if needed, “evacuation scenarios,” the indictment says.

It describes the Kremlin-linked Internet Research Agency in St. Petersburg as an organized bureaucracy. It was backed by an annual budget of millions of dollars, employed hundreds of people and boasted several departments dedicated to specific projects, like search-engine optimization and graphics.

Even those who have demanded Facebook do more acknowledged on Friday it could do only so much.

“We each bear some responsibility for exercising good judgment and a healthy amount of skepticism when it comes to the things we read and share on social media,” Senator Mark Warner, the top Democrat on the Senate Intelligence Committee, said in a statement.

    The defendants are accused of stealing social security numbers of Americans to open up fraudulent accounts on digital payment system PayPal Holdings Inc . They purchased space on computer servers located within the United States to use virtual private networks to mask their identities and pose as Americans. 

Facebook could go further in monitoring its platform and adopt the process cryptocurrency firms use to verify bitcoin traders, said Jordan Lieberman, president of ad firm Audience Partners. But if Facebook raises the bar much higher, “It’s going to interrupt revenue flows and it’s absolutely going to cost them money.”

(Reporting by David Ingram in San Francisco and Dustin Volz in Washington; Editing by Jonathan Weber and Lisa Shumaker)

Venezuela cryptocurrency to draw investment from Turkey, Qatar-official

February 17, 2018

CARACAS (Reuters) – Venezuela’s new “petro” cryptocurrency will attract investments from Turkey, Qatar, the United States and Europe, the country’s cryptocurrency regulator said on Friday.

The government of President Nicolas Maduro, which says the petro will help skirt financial sanctions by Washington, has scheduled the first petros sale for Tuesday.

Skeptics say that concerns about Venezuela’s financial solvency will likely limit investor interest, while the U.S. Treasury Department has warned the petro may violate sanctions against the OPEC nation.

“On Tuesday, there will be quite a few announcements about the start of the process,” Venezuelan Cryptocurrency Superintendent Carlos Vargas said on the sidelines of a political meeting in Caracas.

“And there will surely be a lot of investors from Qatar, Turkey, and other parts of the Middle East, though Europeans and Americans will also participate.”

He did not elaborate.

The Venezuelan government has not provided full details about the petro. But advisers working for the government recommended that 38.4 percent of the petros should be sold in a private auction at a discount of 60 percent.

Venezuela is suffering quadruple-digit inflation and chronic shortages of food and medicine, which have spurred increased incidents of malnutrition and preventable diseases.

Maduro says his government is the victim of an “economic war” led by opposition politicians with the help of the government of U.S. President Donald Trump.

Sanctions levied last year by Washington block U.S. banks and investors from acquiring newly issued Venezuelan debt, effectively preventing the struggling nation from borrowing abroad to bring in new hard currency or refinance existing debt.

(Reporting by Vivian Sequera; Writing by Brian Ellsworth; Editing by Jonathan Oatis and J.S. Benkoe)

E-commerce firm Mercado Libre to open distribution centers in Mexico

February 16, 2018

MEXICO CITY (Reuters) – Mercado Libre, Latin America’s home-grown e-commerce firm, said on Thursday that it would open two large distribution centers in Mexico as part of an effort to improve its logistics in the country.

Buenos Aires-based Mercado Libre said it would invest $100 million to open the distribution centers, the company’s first, which would yield 3,000 jobs in Mexico.

The facilities will help the company speed up deliveries, which is essential to the appeal of e-commerce, Chief Executive Ignacio Caride said in an interview earlier this month with Reuters.

“As fast as possible – that is going to be the experience of e-commerce,” he said. “That is the big difference between people who go to retail stores with packages in their arms, and people who shop online – how long it takes.”

The distribution centers, which total 1.4 million square feet (130,000 square meters), are located in the state of Mexico, which surrounds Mexico City.

Mexico’s nascent e-commerce market is heating up, with Amazon.com Inc also investing heavily.

Logistics is the most vexing challenge facing e-commerce companies, Caride said.

“That is the most difficult part to solve, because it’s very expensive, and it requires lots of people, and it requires a very big investment,” he said.

(Reporting by Daina Beth Solomon; writing by Julia Love; Editing by Amrutha Gayathri)

U.S. regulator warns of cryptocurrency ‘pump-and-dump’ schemes

February 15, 2018

By Anna Irrera

NEW YORK (Reuters) – The U.S. derivatives regulator warned investors on Thursday about cryptocurrency “pump-and-dump” scams that aim to rip off investors by inflating the price of volatile virtual tokens through spreading bogus information.

The Commodities Futures Trading Commission said in a statement that it had received complaints from investors who had lost money in such schemes, and warned against buying cryptocurrencies based on tips found on social media.

“As with many online frauds, this type of scam is not new – it simply deploys an emerging technology to capitalize on public interest in digital assets,” CFTC director of public affairs Erica Elliott Richardson said in the statement.

The CFTC’s warning comes as financial regulators worldwide intensify their scrutiny of cryptocurrencies, which are virtual coins not backed by governments. Cryptocurrency trading has been booming over the past year, with the price of coins such as bitcoin and ethereum hitting record levels in volatile markets.

Bitcoin topped $10,000 on Thursday for the first time in more than two weeks, as investors bought the digital currency after it had fallen 70 percent from its record peak in December.

Cryptocurrencies are traded on largely unregulated and anonymous online exchanges, many of which have been plagued by problems such as hacks and technical glitches. The CFTC considers bitcoin a commodity and has anti-fraud and manipulation enforcement authority over virtual currency markets.

Cryptocurrency “pump-and-dump” schemes are generally carried out anonymously on public chatrooms or on mobile chat apps.

In the “pump” phase, organizers typically post fake or misleading information enticing other investors to buy a token and thus inflate its price. The organizers then quickly sell their holdings of that token – the “dump” – and make a profit at the expense of other investors.

“The price falls and victims are left with currency or tokens that are worth much less than what they expected,” the CFTC said in its statement.

The CFTC has been expanding its reach over cryptocurrencies, having authorized two large U.S. exchanges to list bitcoin futures late last year.

At a Senate hearing this month, CFTC Chairman Christopher Giancarlo noted that the regulator was focused on cracking down on manipulation of cryptocurrency markets.

“What we will do and we are doing is looking for fraud and manipulation,” Giancarlo said. “And we intend to be very aggressive.”

(Reporting by Anna Irrera; Editing by Ian Simpson)

Coincheck hit by lawsuit as investors seek restart of cryptocurrency withdrawals

February 15, 2018

By Thomas Wilson

TOKYO (Reuters) – Cryptocurrency investors launched a lawsuit against Coincheck Inc on Thursday, seeking to force the Tokyo-based exchange to allow them to withdraw assets worth $183,000 frozen after last month’s $530 million heist of digital money.

The group of seven investors filed a suit at the Tokyo District Court, also requesting that Coincheck pay annualized interest of 5 percent on the value of the digital coins from notification of the claim until it resumes withdrawals.

Coincheck, which froze all withdrawals of yen and digital money after the Jan. 26 heist, restarted on Tuesday yen withdrawals, unleashing a single-day outflow of $373 million.

But it said it would keep curbs on withdrawals of cryptocurrencies until it could guarantee the secure resumption of its operations.

“I’m hoping (Coincheck) will respond quickly and let us resume withdrawals,” one of the plaintiffs said at a press conference, speaking on condition of anonymity.

The plaintiff, a man in his 20s who had invested 400,000 yen in digital money at Coincheck, said he would not cease trading cryptocurrencies and was not concerned over their safety.

“I think their value will increase,” he said. “I’ll look for a safer place to invest.”

The Coincheck hack, one of the biggest of digital money ever, underscored security and regulatory worries about bitcoin and other cryptocurrencies even as a global boom in these assets shows little signs of fizzling.

It also drew into focus Japan’s dash to create a system to oversee the industry. The world’s third-biggest economy became last year the first country to draw up rules, a move that was in contrast to crackdowns in countries such as China.

The plaintiffs plan to launch a second lawsuit on Feb. 27 to claim for any lost value of the digital money frozen by Coincheck, as well as other damages stemming from the curbs on withdrawals, said Hiromu Mochizuki, their lawyer.

The group’s frozen assets were worth 19.5 million yen ($183,047) as at the end of Tuesday, and span 12 virtual currencies, according to a court filing. Their value has slumped 31.3 percent, or 8.9 million yen, between the heist and Tuesday, it said.

(Reporting by Thomas WilsonEditing by Shri Navaratnam)

IBM lawsuit casts diversity in starkly competitive terms

February 14, 2018

By Jan Wolfe

(Reuters) – International Business Machines Corp’s insistence in a new lawsuit that its efforts to recruit and maintain a diverse workforce are trade secrets bucks a trend towards transparency and highlights how companies can see the issue in competitive terms, business and legal experts said.

Armonk, New York-based IBM on Monday sued its former chief diversity officer, Lindsay-Rae McIntyre, who left for a similar job at Microsoft Corp. The lawsuit alleges McIntyre violated a one-year non-competition agreement and could disclose IBM’s diversity data and hiring plans.

IBM’s stance puts it at odds with trends in the tech industry and broader corporate world towards sharing diversity success stories and best practices, instead seeming to view diversity as a zero-sum game.

The lawsuit is unusual because IBM is arguing its diversity data and strategy are economically valuable “trade secrets,” a legal term typically associated with closely guarded formulas like that for Coca-Cola. It appears to be the first company to bring such a lawsuit against a rival over diversity efforts, legal experts said.

IBM cited in its complaint McIntyre’s knowledge and oversight of its plans to hire 50 diverse candidates to executive positions and its development of artificial intelligence-based tools to track the career development of women and minorities at the company.

According to IBM, knowledge of this “highly confidential, proprietary, and competitively sensitive information” would allow Microsoft to compete for the same talent and business from customers that value diversity.

Once synonymous with white men in dark suits, IBM created task forces in 1995 to address the issue and soon greatly increased the diversity of its management.

Y-Vonne Hutchinson, an Oakland, California-based diversity consultant and lawyer who works with the tech industry, said IBM has had a legitimate edge over its industry rivals when it comes to diversity.

IBM’s tools for reaching it diversity goals could qualify as trade secrets if it can show they are valuable to competitors, said Villanova University law professor Michael Risch.

IBM said in a statement that it “has a long history of being recognized for leadership in a diverse and inclusive workplace.”

Redmond, Washington-based Microsoft, which is not named in IBM’s lawsuit, said it had no interest in IBM’s confidential information.

‘PUBLIC CONDEMNATION’

Russell Beck, a lawyer specializing in trade secrets law, said he was surprised to see IBM make such nakedly economic arguments about diversity, noting that corporations more typically cast their efforts as benefiting society as a whole.

Most large tech firms have long faced criticism for the lack of diversity of their staffs. IBM took a shot at Microsoft in its lawsuit, noting that the latter company has faced “public condemnation and class action litigation” for its struggles to recruit and promote women.

Microsoft is seeking to dismiss as without merit a class action alleging pay and promotion discrimination.

Microsoft and IBM both derive much of their revenue from selling software and cloud computing services to big companies, a number of which have said they seek diversity in their vendors and suppliers.

Other tech companies have previously argued for the confidentiality of diversity information, though more out of fear of public criticism and litigation than competition, said John Cary Sims, a professor at McGeorge School of Law in Sacramento, California.

But more have recently embraced transparency. In 2014, Google released diversity data after previously trying to keep it private. Apple and Microsoft have also made their data public.

Joelle Emerson, a consultant who has advised Twitter Inc and Airbnb Inc on diversity efforts, criticized IBM’s position.

“If you truly want to build a better industry, sharing learnings is actually a really helpful part of that,” she said.

“Ultimately, a more diverse tech industry benefits every company within that industry.”

(Reporting by Jan Wolfe; Editing by Anthony Lin and Susan Thomas)

Mi mi mi: super fans of China’s Xiaomi stoke IPO ambitions

February 14, 2018

By Cate Cadell and Adam Jourdan

BEIJING/SHANGHAI (Reuters) – Wang Bin, 29, is a serious “mi fan”, one of the ardent followers of Xiaomi Technology Co Ltd, the maker of smartphones and other electronic products that looks headed for a big initial public offering, perhaps as early as this year.

Wang’s house is a Xiaomi temple. He has a Xiaomi television. Wears a Xiaomi watch. Has Xiaomi thermostats, air purifiers and smoke detectors. Xiaomi products help control the windows, doors and lights from an app on his Xiaomi smartphone.

The company, which started with smartphones but has since branched out into a plethora of smart devices, first gained a following in China by releasing limited batches of slick-looking phones to shoppers online at a lower price-tag than the likes of Apple Inc.

“Ordinary people can now experience things that were out of reach before, and this value has helped get these products into millions of family homes,” said Wang. “Since the first Xiaomi smartphone came out I knew Xiaomi would change the world.”

Wang needs no winning over. Still, Xiaomi – led by entrepreneur Lei Jun – will need many more loyal fans to live up to sky-high investor expectations.

There are concerns over thin margins, a stalling Chinese smartphone market, costs of opening physical stores, and obstacles facing the brand to retain its followers and win new ones overseas, analysts who cover the company told Reuters.

HIT A WALL

Reuters reported last month that Xiaomi had tapped CLSA, Goldman Sachs and Morgan Stanley as sponsors for its proposed IPO, which could value the company at up to $100 billion and be the world’s biggest tech float this year.

“Looking from the outside in, that $100 billion number sounds feasible, you can do the math and say it’s possible,” said Hans Tung, a managing partner at GGV Capital, who was an early investor in Xiaomi and is a former board member.

A lot will depend on the major strategy shift Xiaomi is driving with its “internet of things” smart products and services as well as its opening of physical stores. It’s also pushing hard in key markets like India and Southeast Asia.

Xiaomi, founded in 2010, started with an online-only strategy that helped it become, if briefly, the world’s most valuable start-up. CEO Lei Jun developed a cult status akin to the late Apple founder Steve Jobs.

But its online model eventually hit a wall. Xiaomi’s phones dropped out of the top five in China in 2016 because of rising competition from local rivals Huawei, Oppo and Vivo.

The slump forced the company to pull back from several overseas markets in 2016, and to shift towards physical stores and developing artificial intelligence and internet services as new areas of growth.

Last year Lei said the “worst was over” and the firm blew past its 100 billion yuan sales target for 2017 with a couple of months to spare.

Xiaomi snatched fifth spot in the global smartphone market in 2017 and – in an important step overtook Samsung Electronics as the largest vendor in India.

“People started to go to Xiaomi stores because there are so many different products to buy and browse and look at,” added Tung.

INTERNET SERVICES

Xiaomi’s biggest immediate challenge could be an expected decline this year in the Chinese smartphone market after it suffered its first ever drop in shipments last year, said Mo Jia, Shanghai-based analyst at technology research firm Canalys. Analysts estimate the domestic smart phone market provides about 80 percent of Xiaomi’s revenue.

Still, Xiaomi is projected to have made a net profit of at least $1 billion last year, according to bankers who have analyzed the company’s revenue estimates. Profits are estimated to roughly double to around $2 billion this year.

Wang Xiang, Beijing-based senior vice president at Xiaomi and the executive who heads up the firm’s international business, told Reuters the company is aiming to make its profits mainly on services.

“We have a lot of Internet services in China, so we are very, very healthy financially. The model is we sell the hardware at almost cost,” he said.

The company is now “adding resources and hiring more people to get into new markets”, he added.

Xiaomi runs online “communities” in its various markets and has a “MIUI forum” for its super fans – referring to its open-source operating system – with whom the firm shares test versions of its new software once a week on Friday.

The firm also looks at its fan base when deciding which new markets to target.

“We created the first inner circle of hard core fans through MIUI,” said Wang, adding the firm holds an annual banquet for several hundred core fans, where Lei cooks. “The key is the sense of engagement.”

It works with tech start-ups as an “incubator” to develop their gadgets, which might then be sold as Xiaomi-branded products.

But Wang said the company does still face “challenges” in winning over consumers unfamiliar with the brand, and building the fan culture will help to break down barriers.

Sometimes though, even the most loyal sometimes wonder if things have gone too far.

Pan Weida, 31, an online vendor in Shanghai, has 78 Xiaomi products in his apartment, including a robot vacuum cleaner and a rice cooker. He spends around 1,000 yuan per month and buys almost all new Xiaomi products.

“There’s a lot of Xiaomi stuff now so it’s getting a bit complicated. Pillows, bed quilts, underpants – it’s a little nuts,” he said.

(Reporting by Cate Cadell in BEIJING and Adam Jourdan in SHANGHAI; Additional reporting by BEIJING and SHANGHAI newsroomsEditing by Martin Howell)

Japan Display books fourth straight quarterly loss, no partner yet

February 14, 2018

By Makiko Yamazaki

TOKYO (Reuters) – Japan Display Inc reported a fourth straight quarter of loss and said its search for a global partnership was taking more time than expected, showing its growing struggles as customers shift to a newer display technology.

The liquid crystal display (LCD) maker, money-losing for the past three years, has been making half its revenue selling LCDs to Apple Inc. But Japan Display was slow to adopt organic light-emitting diode (OLED) technology, which Apple opted to use for its high-end iPhone X, buying components from Samsung Electronics.

Japan Display posted a net loss of 32.6 billion yen ($304 million) for the October-December quarter, versus a net profit of 7.3 billion yen in the same quarter a year ago.

That compared with an average 30.32 billion yen loss forecast by four analysts, according to Thomson Reuters I/B/E/S.

Japan Display has been considering tapping new investors for capital to catch up in OLED, which it plans to start mass-producing for smartphones only in 2019.

Japan Display in December dismissed as speculative reports that it was seeking funds from clients such as Apple and Huawei Technologies, but said it was seeking to partner with global companies.

It has not disclosed who any potential partners might be. It said on Wednesday that partnership talks, previously expected to conclude by end-March, were taking more time than expected.

“Negotiations are ongoing, so in the process of discussing details the talks have been pushed back,” Chief Financial Officer Takanobu Oshima told reporters.

Aiming to counter declining sales with cost cuts, Japan Display plans to streamline production lines and reduce 30 percent of its workforce, resulting in a special loss of nearly 170 billion yen for the current year.

(Reporting by Makiko Yamazaki; Writing by Ritsuko Ando; Editing by Stephen Coates and Tom Hogue)