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Data Sheet—Thursday, January 28, 2016

Here’s an almost-only-in-Silicon Valley story to affirm your faith in innovation, opportunity, and competition.

Marco Zappacosta’s parents were Italian engineers who immigrated to California in the 1970s. They ended up founding Logitech, a company famous for its computer peripherals. Their son, born in 1985, grew up in the can-do atmosphere of Menlo Park, Calif.—not far from the campus of Stanford University.

Zappacosta isn’t the type to choose the obvious, however. He went east for college, attending Columbia University. There, he and a pal started a group to try to reform Social Security. That didn’t work out so well, but he returned home itching to start something else.

What he came up with is Thumbtack, a matchmaking service for service providers and their customers. Zappacosta says it took five long years to develop the product. Today, it’s a deceptively easy place to find a plumber, painter, electrician, or dance instructor. More importantly from a business perspective, it’s a highly efficient place for service providers to pay for qualified leads.

You’d think the existence of Google, Yelp, Angie’s List and other sites would obviate the need for Thumbtack, but it’s not so. The 380-person company (160 engineers and others in San Francisco; 200 customer-support types in Salt Lake City) has built more than a thousand templates for service requests. That way a service provider starts with the who, what, when, where, and so on and decides if she wants the job. Zappacosta says Thumbtack has 200,000 active paying professionals and that it is facilitating five million projects a year at an average size of $550.

The company’s ambitions are huge, as are its obstacles. Thumbtack has raised more than $250 million and hopes to eventually provide its service providers with scheduling, payments, invoicing, and contract services. First it will have to get past Amazon Home Services and a similar service Google is testing.

The morning after I met with Zappacosta my wife and I in fact needed a plumber. I suggested she use Thumbtack rather than cold calling random names. A response came before I finished a cup of coffee and the sink was fixed shortly after lunch. This is progress.

Adam Lashinsky


Like Apple, Samsung points to services for 2016 growth. Both of the South Korean company’s core businesses—smartphones and the memory chips used in them—recorded slower sales in the fourth quarter. Two areas that could help mitigate that exposure (hinted at during the company’s earnings call): smart health applications and other unspecified cloud services. Apple CEO Tim Cook sounded a similar refrain Tuesday, after the company posted slower iPhone sales than expected. (Wall Street Journal)

Google faces more European scrutiny over taxes. The European Union’s top antitrust official acknowledges that it is closely monitoring reaction to the Internet company’s $185 million tax settlement with the U.K. government, which has been described by many as a sweetheart deal. Meanwhile, Italian authorities think the company owes more taxes for its business there between 2009 and 2013, reports Reuters. (The Verge, Reuters)

Alibaba’s results beat estimates despite fewer transactions. The Chinese e-commerce giant managed to grow third-quarter revenue by 32% to 34.53 billion yuan (roughly $5.25 billion). Its transaction volume grew at the slowest rate in three years, reaching $147 billion. (Reuters)

Will Amazon divulge numbers for its Prime service? Some analysts are pushing the e-commerce giant to share growth metrics for its subscription business—as it started doing last year for its cloud division, Amazon Web Services. Independent research estimates Prime subscriber numbers at 54 million, up 35% since 2014. Roughly 47% of everyone who uses Amazon is a member. Amazon’s results are due later today. (Fortune)

EMC CEO: Dell deal is on track. During EMC’s fourth-quarter earnings call, Joe Tucci said he is “confident” the $67 billion merger will meet contractual terms. Skeptics have their doubts, pointing to volatile market conditions and concern over plans for VMware, EMC’s virtualization software company, which is part of the complex transaction. VMware’s decision to swap CFOs this week could assuage some fears. The merger is scheduled to close by October. (Fortune)

PayPal adds record number of users. The digital payments service signed up 6.6 million accounts in the fourth quarter, much higher than its recent average of 4 million. The biggest motivation behind this acceleration: mobile shoppers, including almost 1.6 million brought on through PayPal’s acquisition of Xoom, a money transfer service. (Fortune)


Facebook doesn’t think about making money the way most companies do. Like many Silicon Valley organizations, Facebook is a “mission-driven” company. Sure, its revenue grows like crazy every year—52% in 2015. Its profits are downright impressive—44% operating margins and a first quarter with more than $1.5 billion in net income. But executives would rather stress that the company is about making the world more open and connected. Listen to enough Facebook earnings calls—like the one it held last night—and that phrase becomes deeply lodged in your brain. Hang around Facebook executives enough, and you’ll learn that cynical business questions about money are best phrased in terms of “user experience” and the social network’s mission. (Fortune)


Qualcomm’s dispute with LG could keep dragging down the stock
by Stacey Higginbotham

Here’s why Apple’s stock is a sell by Stephen Gandel

Google drops new hint about its drone delivery service by Jonathan Vanian

Meet ‘Starry,’ a radical new Internet service from the founder of Aereo
by Jeff John Roberts

Box gets cozier with Microsoft by Heather Clancy

Salesforce adds Heroku development platform to App Cloud
by Barb Darrow

How the U.S. is killing it in eSports by John Gaudiosi

You can now use PayPal’s Venmo to pay merchants by Leena Rao

AT&T, Verizon join Facebook-led data center group by Jonathan Vanian

Your cable fees will go down if this plan works by Jeff John Roberts

Google has shipped 5 million Cardboard virtual reality viewers
by Leena Rao

Want to hire a team player? Ask about volunteer work by Anne Fisher



What does your sweat say about your health? New sensors can detect subtle biochemical changes by monitoring perspiration, ushering a new era for fitness wearable technologies. (Wall Street Journal)

This edition of Data Sheet was curated by Heather Clancy: