Spotify finally launches in USA

Spotify on iPhoneIts American service had previously been put on hold, apparently because the labels were not convinced about its ability to make them money.

About 10 million people use Spotify across parts of Europe, with one million paying for its premium service.

The company has reduced elements of its free product, ahead of the US launch.

In April, limits were introduced on the number of times users of the basic version could play tracks.

Total listening time was also reduced to 10 hours per month for the free service.

The move was widely seen as a pre-emptive concession to the American record companies which are uneasy about moving to ad-funded or subscription-based distribution.

Paying pennies

Research suggests that services such as Spotify, Last.FM and Rhapsody yield relatively low returns for artists.

Music industry analyst Mark Milligan calculated an average pay-per-play figure on Spotify, based on the Ben Rodgers Band, of $0.004 (£0.002).

Cracking the United States might make the numbers more attractive, according to Giles Cottle, senior analyst at Informa Telecoms and Media.

“They will only get their model to work if they successfully launch in the US.

“It works if you get a large number of plays and you can get a lot of people to sign up to the premium service,” he said.

Despite industry trepidation, Spotify has attracted high profile fans.

Facebook founder Mark Zuckerberg described it as “pretty amazing”, while soundtrack composer and Nine Inch Nails frontman Trent Reznor took to Twitter to express his excitement about the US launch.

Spotify is likely to face competition in the US from online jukebox Pandora which claims 100 million registered users.

Pricing details for Spotify’s US service are yet to be made public.

Google begins testing its daily-deal Groupon clone

Google has the advantage of already having both millions of users and advertisers.

(WIRED) — Spurned by daily-deal site Groupon, Google is now testing Google Offers, its own service for sending users deeply discounted offers for local businesses, starting with Portland, Oregon.

Yes, it’s YADDS (Yet Another Daily Deal Site), but Google has the advantage of already having both millions of users and advertisers.

Google reportedly tried to buy Groupon for $6 billion in December, only to be rebuffed.

Groupon, based in Chicago, exploded in popularity in the recession, likely becoming the fastest-ever billion-dollar corporation. After spawning dozens of copycat sites, Groupon is now looking to IPO.

The beta of Google Offers is launching in Portland, and a splash screen prompting users to sign up began showing up Thursday.

Google confirmed that Google Offers is now official.

“Today we launched a marketing campaign inviting Portlanders to sign up for a test of Google Offers — to get great deals delivered right to their inboxes,” a company spokeswoman said by e-mail. “Offers is part of an ongoing effort at Google to make new services that give consumers great deals while helping connect businesses with customers in new ways.”

Google is also offering users in five other locations — New York City Downtown, New York City Midtown, New York City Uptown, Oakland-East Bay in California, and San Francisco — the chance to sign up.

Businesses interested in testing Google Offers can fill out a form to join the beta.

Hey Twitter, Zynga: MOVE TO FRANCE

paris

Twitter and Zynga are thinking about moving out of San Francisco because they’re about to be socked with a huge tax bill. Ridiculous!

But, one man’s mistake is often another man’s opportunity. And this is a great opportunity for these two great companies to move to a country notorious for its favorable tax environment… France.


Wait, what?

Yes, taxes in France are pretty high compared to, say, Somalia. But compared to New York and California, it’s really not that bad. The US has higher corporate taxes, and when you take state and local taxes into account, the overall tax burden really isn’t much lower than France’s.

But the most important thing is that, if they play their cards right, startups based in France can get plenty of tax breaks. For example, R&D tax credits let technology companies deduct up to 80% of their R&D spending from their tax bill. Being in the European Union also allows you to move your tax burden around: Google pays very little taxes in France or anywhere else because they shift their burden to their Irish headquarters, where taxes are lower.

Last year, Google announced that they would open an R&D center and a “Cultural Institute” in Paris (right now their Paris office is mostly sales), and the French government hinted, without coming out and saying it, that Google got tax breaks out of it. We’re sure Twitter and Zynga could work out a similar deal for moving their HQs in Paris.

France can be a hard place to start a company, but once you’ve reached a few hundred employees it gets much, much easier. Just ask innovative, billion dollar French tech companies like Vente Privée and Iliad.

Now, what would Zynga and Twitter get on top of tax breaks if they moved to Paris? Tech startups don’t just want tax breaks. They also want to hire the most talented people in the world. And this is where Paris truly shines.

Here’s what Paris has going for it:

  • Very deep technical talent. French engineering schools are small, which means they don’t tend to make a big splash internationally. But the flip side of that is that by staying small, they churn out extremely talented graduates. Admissions to French engineering schools is very competitive, and takes place after two or three years of post-secondary education in preparatory classes where 80 hours a week of study is a minimum. It’s no coincidence that you can’t swing a cat on a London trading room floor without hitting a French guy. Twitter, these guys will sleep on your server room and come up with crazy-ass hacks to keep you up and running. (Yes, French people can and do work hard.) Paris also has a thriving open source community.
  • Great designers. Paris and designers practically go together, don’t they? It would take too long to cite the amazing designers, in every area, who live and thrive in Paris. Twitter and Zynga are nothing if not design-focused, and indeed the entire “application layer” of the web is moving to a greater focus on design. Tapping Paris’s world-class pool of talent would definitely be a competitive advantage.
  • Lower salaries. Given the lower purchasing power, even with higher (?) payroll taxes, a top engineer or designer still costs less to employ in France than in Silicon Valley.
  • Gaming talent. This one is for Zynga. Perhaps precisely because of this combination of design and technical talent, France has been a hub for great gaming companies. It’s the home of companies like UbiSoft, and Gameloft, arguably the biggest mobile gaming company in the world.
  • Arbitrage. Even though it’s surging, Paris’ startup hub is still nowhere near Silicon Valley’s, or even New York or London’s vibrancy. That seems like a drawback, but it’s actually a tremendous arbitrage opportunity. As has been established, Paris has plenty of amazing, cheap talent–and there’s much less competition for that talent. Google is much smaller, Facebook has like twelve people, and you don’t have hot flavor of the day startups that just raised $10 million with a napkin. Twitter and Zynga are both companies that want to be around 20 years from now, and so they should look at this as a long term investment. When Google opened an engineering office in New York in 2003, plenty of people raised eyebrows. Now it’s an amazingly prescient bet that has paid off hugely, both for New York and for Google.
  • Quality of life. This one needs no explanation.

Groupon launches online bargain site in China

groupon2.jpg US Internet coupon deals website Groupon launched its China    venture in partnership with local Web giant Tencent.
SHANGHAI: US Internet coupon deals website Groupon launched its China venture in partnership with local Web giant Tencent, looking to tap into the world’s largest Internet population. 

Customers can now sign up on Gaopeng.com, with daily discounts from local merchants to debut in March, Groupon and Tencent said in a joint statement.

“The collaboration combines Groupon’s global group-buying experience with Tencent’s in-depth knowledge of Chinese online communities,” the companies said.

“We are excited to be in China collaborating with a leading Internet company and highly-respected business leaders,” Andrew Mason, founder and chief executive of Groupon, said in the statement.

Gaopeng.com is funded by Groupon, Tencent Collaboration Fund — established earlier this year — and private equity fund Yunfeng Capital, whose investors include Alibaba Group founder Jack Ma.

China has the world’s biggest Internet population with at least 457 million users.

Despite the potential for rapid growth, Groupon is likely to encounter tough competition as many Chinese firms, including Tencent, have already started online group-buying sites.

The website http://www.groupon.cn is operated by a rival company, forcing Groupon to use the gaopeng.com address. Gaopeng roughly translates to “cherished friend”.

Founded in 2008, Chicago-based Groupon offers discounts to its members on retail goods and services, offering one localised deal a day.

The company announced in January it had raised $950 million in a month to invest in technology, fund its global expansion and compensate company employees and early investors.

The company said then its subscriber base had grown to 50 million from just two million at the beginning of 2010.

Earlier this month, Groupon decided to pull a series of advertisements debuted during the Super Bowl that critics said made light of the plight of Tibet, whales and the Amazon rainforest.