Data Sheet—Thursday, April 23, 2015

TOP OF MIND

Facebook is delivering on mobile, now what about video? I’m sure plenty of companies would love to report quarterly revenue growth of 42%, but the social network’s sales milestone of $3.54 billion was actually below analysts’ expectations.

The good news for Mark Zuckerberg and his management team is that mobile now drives close to third-quarters of Facebook’s ad revenue, up substantially from one year ago. Mobile will also play a big role in the company’s evolving strategy for Messenger. (Plus it’s experimenting with apps such as Hello, a new dialer for Android smartphones.)

Now, Wall Street wants to hear far more about Facebook’s video story. After all, it hosts more than 4 billion video streams. On last night’s earnings call, execs cautioned that forthcoming programs might cannibalize existing ads. They're being very secretive about details. Stay tuned.

TRENDING

For PayPal, a preview of coming attractions. The soon-to-be-independent digital payments company reported slightly higher Q1 revenue ($2.1 billion) than the core eBay marketplace business. That's the first time this has happened. The latter may see another hiccup in its business during the current quarter: eBay product listings have been negatively by Google’s changes to its search algorithms.

Google just disrupted the business model for wireless data. Its new service, called Project Fi, isn’t broadly available (yet). Still, it could force carriers to reconsider their reluctance to embrace pricing plans that charge for data based on actual usage rather than in lump-sum increments. Is Google's offer really a better deal? Mostly yes, but only if you use an Android 6 smartphone.

Homeland Security sets up shop in Silicon Valley. Its satellite office has missions in recruiting (convince more cybersecurity experts to join the government’s team) and advocacy (persuade more security companies to share what they learn about new threats and countermeasures).

Here’s how Box hopes to win over skeptics. Topping the agenda at its first big post-IPO conference: a new $40 million fund for startups that build applications using its cloud storage service and collaboration framework. Plus, it showed off new tools to help developers do just that.

THE DOWNLOAD

Swirl raises $18 million to tell the Internet where you are

Stacey Higginbotham joins the Fortune technology team after her latest assignment at Gigaom. Here’s her latest dispatch about the Internet of things.

Swirl Networks, a company that makes location-sensing beacons and the software platform that helps retailers manage them, has raised $18 million in a Series C round from Hearst Ventures, SoftBank Capital, Twitter Ventures and other strategic investors. Venture capital firm Longworth Venture Partners also participated in the round, which brings Swirl's total capital raised to $32 million.

Swirl's technology is used in stores such as Lord & Taylor and Urban Outfitters to offer customers proximity-based discounts via the retailers' mobile phone apps. So if a customer is standing in the home goods section and there is a sale on a certain type of dishware, they might see a notification. But if they are in the shoe section they would see nothing.

The notification is made possible thanks to a device called a beacon that is placed somewhere nearby. These devices use Bluetooth—the same radio technology that connects your headset or a wireless speaker to your phone—to sense when a person (or actually her phone) is within a few feet and then triggers the notification.

In-store marketing was the first big test case for Boston-based Swirl and the use of beacons, but there are a lot of other possibilities. Swirl customer Marriott, for example, uses the platform for identifying guests so it can offer better service and perks.

The ability to place people with such granularity in the physical environment has all kinds of advantages for building customized services, but there are tremendous logistical hurdles to overcome. An obvious one is privacy, which Swirl manages by having people opt into the service on its own app and its customers' apps. It's also quite difficult to build a digital layer on top of the physical world that can understand where people are within a few feet. And doing so while relying on a distribution network of physical sensors is even harder.

Read more of Stacey's article about how beacons are reshaping mobile marketing.

ALSO WORTH SHARING

RadiumOne founder Gurbaksh Chalal faces gender discrimination allegations. His accuser was the marketing vice president recently fired by his latest marketing software startup, Gravity4. Ironically, she was originally hired to help rebuild Chalal’s reputation during his previous legal troubles.

All in the name of national security. A controversial provision in the Patriot Act allowing “bulk” collection of telephone records—one of the Edward Snowden’s most eye-opening revelations—is set to expire June 1. A bill introduced by Senate Majority Leader Mitch McConnell would fast-track an extension through 2020. The House was also busy talking about tech policy today: it passed the “Protecting Cyber Networks Act,” which makes it easier for businesses and government agencies to exchange information about threats.

Meanwhile in France, five giant tech companies—Apple, Facebook, Google, Microsoft and Twitter—are cooperating with government authorities on a plan to flag and remove “extremist content” from their Internet services.

Leadership change in store for F5 Networks. Long-time CEO John McAdam is retiring. His successor will be Manuel Rivelo, currently the network equipment company’s executive vice president of strategic solutions.

This doesn’t bode well for the Comcast-Time Warner merger. The FCC wants a hearing on the proposed union, worth $45.2 billion, reports The Wall Street Journal.

Qualcomm was really counting on the Galaxy 6 business. The mobile chipmaker reported a 45% drop in earnings for the second quarter. That, and Apple’s strength, just shaved another $1 billion off its revenue forecast for the year, now set for $25 billion to $27 billion.

But, Sony’s year will be way better than expected. That is to say, it will lose far less money than its management team previously forecast. Two big bright spots: the super-successful PlayStation 4 gaming console and appreciable sales for image sensors used in digital cameras and smartphones.

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MY FORTUNE BOOKMARKS

Intel-Endico partnership aims to break a medical logjam by Laura Lorenzetti

Utah software firm offers to cover tuition to attract women by Michelle Lodge

This new mobile game business model encourages kids to play real games. Here’s how by John Gaudiosi

Exclusive: Twitter execs put stock sales on ice by Dan Primack

Big data is key to disrupting the U.S. patent industry by Robert Litan

Facebook changes its News Feed algorithm (and its control over publishers) by Mathew Ingram

Twitter’s CEO Dick Costolo: Transparency in the workplace is key to success by Benjamin Snyder

ONE MORE THING

Amazon to customers: Can’t take delivery of a package? We’ll leave it in your car.

MARK YOUR CALENDAR

Forrester’s Forum for Technology Leaders: Win in the age of the customer. (April 27 - 28; Orlando, Fla.)

MicrosoftIgnite: Business tech extravaganza. (May 4 – 8; Chicago)

NetSuite SuiteWorld: Cloud ERP strategy. (May 4 – 7; San Jose, California)

EMC World: Data strategy. (May 4 - 7; Las Vegas)

SAPPHIRE NOW: The SAP universe. (May 5 – 7; Orlando, Florida)

Gartner Digital Marketing Conference: Reach your destination faster. (May 5 – 7; San Diego)

Cornerstone Convergence: Connect, collaborate. (May 11 - 13; Los Angeles)

Cloud Foundry Summit: Open source development. (May 11 - 12; Santa Clara, California)

Annual Global Technology, Media and Telecom Conference: JP Morgan’s 43rd invite-only event. (May 18 - 20; Boston)

Signal: The modern communications conference. (May 19 - 20; San Francisco)

MuleSoft Connect: Tie together apps, data and devices. (May 27 - 29; San Francisco)

MongoDB World: Scale the universe. (June 1 - 2; New York)

HP Discover: Trends and technologies. (June 2 - 4; Las Vegas)

Apple Worldwide Developers Conference: Future of iOS and OS X. (June 8 - 12; San Francisco)

Hadoop Summit San Jose: Mainstreaming adoption. (June 9 - 11; San Jose, California)

Red Hat Summit: Energize your enterprise. (June 23 - 26; Boston)

Brainstorm Tech: Fortune’s invite-only gathering of thinkers, influencers and entrepreneurs. (July 13 - 15; Aspen, Colorado)

LinuxCon North America: All about open source. (Aug. 17 - 19; Seattle)

VMworld: The virtualization ecosystem. (Aug. 30 – Sept. 3, 2015; San Francisco)

Dreamforce: The Salesforce community. (Sept. 15 - 18; San Francisco)

BoxWorks 2015: Cloud collaboration solutions. (Sept. 28 - 30; San Francisco)

Workday Rising: Meet and share. (Sept. 28 - Oct. 1; Las Vegas)

HP Engage: Big data, big engagement. (Oct. 4 - 6; San Diego)

Gartner Symposium ITxpo: CIOs and senior IT executives. (Oct. 4 - 8; Orlando, Florida)

Grace Hopper Celebration of Women in Computing: World's largest gather of women technologists. (Oct. 14 - 16; Houston)

Oracle OpenWorld: Customer and partner conference. (Oct. 25 - 29; San Francisco)