JP Morgan invests $48m to ‘Googlize’ Bournemouth hub

JP Morgan is investing $48 million to revamp its technology and operations hub in Bournemouth, making it more akin to the working environments of large tech companies such as Google Inc., which are increasingly luring some of the brightest and best candidates.

Our sister publication Financial News reports that the bank announced that the enhanced Bournemouth Technology & Operations Center, which hosts over 4,000 employees, will include colorful breakout lounges to allow staff to work collectively and more collaboratively, as Financial News reported in March.

The infrastructure project — which is expected to be completed in the next three years — will also give employees access to improved communications technology. The building’s restaurant will be revitalized and facilities will be upgraded for employees who cycle to work.

The move comes as banks struggle to fend off competition for top talent from large technology companies, which are seducing candidates with more laid-back working environments and high salaries.

Investment banks were traditionally among the top recruiters for talented technologists because of their large IT departments and attractive salaries. In recent years, however, the pay gap has narrowed, leading many to choose tech firms over large banks.

Like JP MorganJPM -0.46%, other banks are ramping up their efforts to compete for tech talent. Credit Suisse executives give programming lessons at a top UK university, while Bank of America Merrill Lynch is developing applications it can take to career fairs to show potential recruits what they would be working on.

The revamp at JP Morgan is in line with its aggressive technology recruitment campaign, which was overhauled three years ago to become more IT-specific. The new campaign, called “Be the Spark”, highlights the role that technology plays in the organisation.

The US-based investment bank spends around $8 billion globally on IT each year. On its technology-specific recruitment web page it claims to “have the scope to influence what happens in the intellectual incubators of Silicon Valley”.

JP Morgan’s large investment in its Bournemouth office is also another example of a global bank moving its focus from the expensive City of London to other UK locations. Deutsche Bank recently moved sales traders to Birmingham, while Bank of AmericaBAC -0.33% has a large presence in Chester.

JP Morgan’s Bournemouth office was established 28 years ago, its staff support the bank’s activities in more than 40 countries.

Jamie Dimon, chairman and chief executive of JP Morgan Chase, said in a statement: “Bournemouth offers access to high quality talent and to facilities that can support our business, not just in London, but around the world.”

Simon Cooper, JP Morgan’s Bournemouth site leader, said: “As we have gradually exposed our people to that new style of working environment, it has proven very popular.

“We will be providing collaboration and breakout spaces that allow people to work collectively on design problems, or specific coding challenges. It will be highly productive for us an organization and highly enjoyable for individuals, a win-win situation as far as we’re concerned.”

Twitter Shares Sink to a New Low

Twitter Shares Sink to a New LowTwitterTWTR -9.37% shares sank 12% in morning trading Wednesday to around $37.50, an all-time low for the stock since it began publicly trading in November.

It’s a steep slide from the high of $73.31 on Dec. 26. Twitter has twice reported quarterly results that have shaken Wall Street. Three months ago, Twitter’s stock cratered after its first earnings report as a publicly traded company.

The financials — growing revenue, a move toward profitability and no head-turning misses on analysts’ forecasts — haven’t really been the issue. Instead, investors are worried that Twitter won’t show explosive growth in new sign-ups. Tuesday’s earnings release showed Twitter managed to stem a decline in user growth.

The growth — 14 million new monthly active users — wasn’t impressive enough for investors, who are coming to grips with the fact that Twitter isn’t the next FacebookFB +2.73%. Or at least won’t be anytime soon.

As the Journal’s Yoree Koh wrote:

The 10% stock slide in after-hours trading reflects Twitter’s outsize expectations ever since it went public in November and finished the day with a $25 billion market value. Many investors have expected Twitter to eventually follow the trajectory of Facebook Inc., which is used by more than half of the U.S. online population and has built a formidable mobile-advertising business.

While Twitter has proven to be a powerful communications tool for celebrities, activists, marketers and journalists, it hasn’t caught on with mainstream users. Facebook, meanwhile, has become a required place to share photos and life’s daily happenings.

Chief Executive Dick Costolo said on the conference call with analysts (and again on CNBC this morning) that he is quite happy with the number of new users, and how they are engaging with the service. The engagement issue is obscured, Twitter says, by the fact that its new feature enhancements make it less likely users have to “refresh” their Twitter timelines, which would translate into more “views.”

While Twitter has sunk below its opening price from its first day of trading, it still has a ways to go before falling to its IPO price of $26.

Cisco and Others Fund Ayla’s Effort in ‘Things’ Software

David Friedman and Thomas Lee learned that the ‘things’ part of the Internet of Things is very difficult for a startup. So they are taking on other aspects of connecting the world’s devices together, a plan that is attracting investors.

Ayla Networks, the company they founded, is announcing a second funding round that includes money from Cisco SystemsCSCO -0.22%–one of the biggest cheerleaders for the Internet of Things movement–as well as other investors with an eye toward China and other international markets.

The $14.5 million Series B round–one of the topics being discussed at an event Wednesday being hosted by Cisco’s venture capital arm–brings the total raised to date by Ayla to $20 million.

Friedman, Ayla’s chief executive, and Lee, a Stanford University professor of electrical engineering since 1994, aren’t shy about talking about the failings of their prior startup. ZeroG Wireless, as it was called, tried to develop low-power Wi-Fi chips that would go in various kinds of products to help them connect to the Internet and to each other.

The thing is, there are many chip makers already that have been tackling wireless communications and other aspects now associated with the Internet of Things. And designing chips takes a lot of time and money.

“One of the big learnings back then,” Friedman said during a gathering with reporters Monday night, is that “chip companies are kind of hard to do.”

So ZeroG was sold to Microchip Technology, for what some publications called a “fire-sale” price, and the two men ultimately came up with another line of attack.

Instead of competing with all those semiconductor companies, Ayla styled itself as an ally; it developed a kind of platform that includes software and a Web service to help to help other companies connect and coordinate with many different kinds of chips. Ayla also developed circuitry that it has convinced some chip makers to incorporate to help manage networks of connected things.

In other words, a bit like how Microsoft Windows became a unifying standard in PCs, Ayla wants to become a platform so all kinds of companies can jump on the Internet of Things bandwagen without specialized semiconductor or software expertise. And Ayla hopes to get a small royalty for each of the things connected.

Another one of Ayla’s founders, Phillip Chang, has deep connections in China, Friedman said. So the company has been putting a lot of its early efforts into cracking into the nascent Internet of Things market there.

Also for that reason, one of the investors in Ayla’s latest funding round is SAIF Partners, one of China’s largest venture-capital firms.

Ayla can only drop some names of customers, which so far have mainly desired to keep a low profile. But Friedman said one is a major maker of classic-style thermostats, one of the sectors facing competition from new-wave companies like Nest Labs, recently acquired by Google.

Friedman said Ayla felt like “sending out flowers” to Nest every time it announces a product, because its moves tend to prompt action on the parts of other companies that turn to Ayla.

Another key player at Ayla is Adrian Caceres, a vice president of engineering who formerly spent time at Amazon’s Silicon Valley Lab126, where he worked on Kindles.

Blue Apron Raises $50 Million to Deliver Do-It-Yourself Meal Kits, Recipes

Tech companies offering Web and mobile food-ordering services are doing brisk business. A new, $50 million investment in Blue Apron is one of the larger venture bets in this bustling category.

Stripes Group led the Series C investment in Blue Apron, joined by the New York startup’s earlier backers including Bessemer Venture Partners and First Round Capital, said Matt Salzberg, Blue Apron’s chief executive and a former venture capitalist.

Investors involved in the deal confirmed a post-money valuation of $500 million for Blue Apron.

Is this a peak for the food tech sector, or maybe just the start?

According to Dow Jones Venture Source, in 2009 venture capitalists in the U.S. funded 24 food-relevant companies, compared to 57 deals in the category in 2013. This year, U.S. venture investors have already backed 20 food-relevant businesses.

The trend is also rising worldwide: Latin American venture investors did six deals in the sector last year but none in 2009. And European venture capitalists backed 13 food-related startups in 2009, up to 24 in 2013, and have already backed 12 food-related startups this year.

For its part, Blue Apron delivers “meal kits”–including pre-measured ingredients and recipe cards–in refrigerated boxes to members, who subscribe to the service for about $60 a week. The subscription translates to a cost of about $10 a meal per person, with most typical customers getting 3 meals a week for a party of two.

Users choose from six recipes, which the company changes each week. If they’re traveling, or don’t want anything from that week’s menu, customers can “roll over” their meals to another week.

The company’s most direct competitors include Plated.com (Dine In Fresh), which raised $5 million earlier this year in a round led by ff Venture Capital, and the angel-backed Chefday.com.

Its subscription commerce model allows Blue Apron to predict and buy just the food it needs to fulfill orders weekly, minimizing food waste, and keeping overhead much lower than any traditional or online grocer’s, the CEO said.

Blue Apron negotiates bulk rates on ingredients with food producers and suppliers in different local markets each week, Salzberg added. It aims to introduce home chefs to local, in-season ingredients they may not find in their neighborhood groceries, or may have not have tried without the guidance of a Blue Apron recipe.

Facebook’s Ad Network Is Finally Here

Following years of speculation FacebookFB +2.73% on Thursday officially unveiled its new ad network, which will initially focus on mobile devices.

Speaking at the company’s f8 developer conference in San Francisco, Facebook’s mobile monetization chief, Deborh Liu, introduced the network to a room full of mobile developers and publishers, and promised it will make the process of selling ads easy for them. “We bring it all together for you so you don’t have to hire a sales team to sell ads,” she said.

From a marketer perspective, Liu said the targeting capabilities of the new network would be similar to those available on Facebook itself. If a marketer wants to reach fans of Game of Thrones on Huffington Post, for example, they could use Facebook’s data to do so. She described Facebook’s targeting system as “the best in the world,” referring to the amount of information it collects about its users.

In terms of ad formats the network will support a range, including banners, interstitials, and “native” units customized to specific apps and publisher environments. Facebook itself has enjoyed success developing its own ad formats over the years, as opposed to selling standardized banners. The company is urging its publisher and developer partners to do the same.

“Formats really matter in mobile,” Liu said, adding, “We encourage you to work with us on native advertising.”

Brands already testing the new network include Coca-Cola and Disney. Meanwhile agency ad buyers say they’re excited by the opportunity, mostly because of the powerful targeting capabilities Facebook can offer them.

Google Glass Parts Estimated to Cost Less Than $80

Google Glass currently carries a $1,500 price tag, but the components packed tightly inside the device may cost the Internet giant a lot less, according to an early estimate released on Wednesday.

TechInsights’ Teardown.com business, which takes apart and analyzes new consumer gadgets, recently  examined the insides of Glass and put a cost estimate of $79.78 on its components.

A Google spokesman called Teardown.com’s cost estimate “absolutely wrong.” He declined to comment further.

Possible points of contention may have to do with the physical constraints associated with a pair of eyeglasses.

The Glass display, for example, is only a few millimeters wide, but boasts quite high resolution and could have been tricky and expensive to design and manufacture. But Teardown.com estimated that the display, touchscreen and glass cost Google only $3.

Teardown.com said its figures were a rough estimate based on a quick analysis, and are likely to change when it engages in a more thorough exploration.

“Now that the Glass is part way through the full Deep Dive Teardown analysis we will have a better understanding of what each component costs,” said Thomas Gallant, a spokesman at the research firm, in an email.

Beyond the components, the cost of manufacturing Glass–squeezing all these things into a small, wearable device–may add a lot more to Google’s costs. Glass is also assembled in California, which is typically more expensive to produce manufactured products than parts of Asia where most mobile devices are built.

Then there are uncounted design costs–including the PhDs and engineers, employed and likely paid handsomely by Google, who have worked on Glass since 2011.

Still, Wednesday’s estimate may raise questions about the high price of Glass. Google hopes to reduce the cost, especially when it releases the device for sale to the general public. If the company can sell more Glass gadgets, the higher production volumes will likely help because it will be able to buy more components at lower bulk prices.

As for the key component suppliers, the teardown of Glass revealed some familiar names. Texas Instruments, for example, supplied its OMAP 4430 applications processor, which uses technology licensed for ARM Holdings. Teardown estimated it costs $13.96, making it the single most expensive component.

The firm said Glass use 16 gigabytes of NAND flash memory from Toshiba, at a cost of $8.18 per device.

TechInsights, while producing what may be the first cost estimate, is not the very first to take the device apart. ExtremeTech published results of a  teardown in June 2013, characterizing the components inside Glass as “underwhelming.”

Amazon Widens Same-Day Delivery Service

The e-commerce giant is set to broaden its same-day shipping service starting Thursday by allowing later ordering times in some places and adding Dallas and San Francisco to the dozen cities where it’s available.

As well, Amazon will make it easier to find the roughly one million items that are eligible for same-day delivery, by adding search filters and a new section to the website for its “Local Express Delivery” service. It also is lowering the delivery fee for many orders made by members of its $99 Prime unlimited shipping program.

For Amazon and other e-commerce companies, same-day delivery has long been viewed as a key obstacle in their effort to tackle brick-and-mortar retailers. Despite nearly limitless inventory, online retailers haven’t yet found a way to feasibly roll out same-day delivery for a broad swath of Americans.

More than four years after introducing same-day delivery, Amazon’s service is unavailable in the vast majority of the country.

The Wall Street Journal reported last week that Amazon is testing out a delivery service of its own that could help it expand same-day shipping. The company is bypassing UPS, FedExFDX +0.58% and the Postal Service, among other carriers, by bringing Amazon packages directly to customers’ doorsteps in San Francisco, Los Angeles, New York and possibly elsewhere.

As well, it introduced same-day fresh grocery delivery in Los Angeles and San Francisco last year after testing it for years in its hometown, Seattle.

While Amazon is expanding same-day delivery, it is ending the service in Las Vegas, an original site for the service and where Amazon operates a shipping warehouse just north of the city. A spokeswoman said that the company is always testing new services and delivery areas, but declined to discuss why Las Vegas is losing its same-day delivery.

In San Francisco, Phoenix and some other cities, customers can place an order as late as 12:15 p.m. and get it by 9 p.m. that night. Until recently, Phoenix residents had to place orders by 9:30 a.m. to get it the same day.

Amazon Prime members in San Francisco, Phoenix, Seattle, Dallas and Los Angeles and, later, other markets, will pay a flat $5.99 fee for same-day delivery for up to about 150 pounds of goods. The fee had previously been $3.99 for each item.