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Facebook Set to Appeal Belgian Data Privacy Decision

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Belgium recently had a court ruling that determined Facebook was going too far in collecting information about visitors to its site who are not Facebook users.

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Facebook has said that it will appeal this decision, which it likely considers central to the business model the company uses, whereby they harvest user data and sell it to advertisers, for lack of a better description. Facebook must see it as paramount to fight such rulings at every level, to prevent further regulation on the collection of user data.

For its part, Belgium seems to be interpreting laws in a pretty standard way, not going out of its way to make the determination. The Belgian ruling is not alone among European countries and jurisdictions passing recent rules on how American Internet companies like Facebook are allowed to interact with the data of European citizens. The European Union sees data privacy as a fundamental right, and companies like Facebook and Google, who want to operate there will need to comply with stricter regulation as the situation matures. Ultimately, Facebook and others are going to be more limited in the European Union, which generally has more regulations than the United States in any case.

Also read: [Two]Face[D]Book? Facebook May Be Pushing for Controversial CISA BillFacebook1

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Facebook’s practice of collecting data about non-users who visit the site helped it better understand what kinds of users were looking for different kinds of information on the website. This could become useful for advertising and monetization purposes, or it could just feed into the nexus of Facebook’s data collection project. In either case, the company will want to keep it intact, and has said that it will be fighting the decision as hard as necessary.

However, failing to comply with the decision could bring fines of up to $270,000 per day, which would make it seem the free service needs to get the whole thing worked out pretty fast. Then again, Facebook has a market capitalization of 301 billion dollars, so it could last a while under such conditions.

Whether or not companies collect data should become less of an issue as the absence of data collection becomes more of a selling point. More educated users are coming online all the time, not wanting to participate in services which make them the product. Such customers will find a critical lack of non-invasive services currently available, but in the future, it’s easy to see that companies will have a serious incentive to create services which don’t collect data.

Presently, it would seem that Facebook makes more from its users browsing than it could through charging them. After all, how many people worldwide would continue to use social media if it were all behind a pay wall? Generally, such services are only paid for when they have to do with dating or something of that nature. Internet users of the past decade and prior have come to expect most things online to be free. Highly niche markets are able to create paid areas, but these are rare and, more importantly, the information behind the wall can be critical to business decisions.

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Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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5 stars on average, based on 1 rated postsP. H. Madore has covered the cryptocurrency beat over the course of hundreds of articles for Hacked's sister site, CryptoCoinsNews, as well as some of her competitors. He is a major contributing developer to the Woodcoin project, and has made technical contributions on a number of other cryptocurrency projects. In spare time, he recently began a more personalized, weekly newsletter at http://ico.phm.link




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Artificial Intelligence

YEXT: An Invisible Force In Artificial Intelligence

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YEXT, Inc. (NYSE: YEXT) is one of those behind the scenes companies involved in Intelligence Search that plays an important role in Artificial Intelligence. What does that mean? Remember the Amazon commercial? “Eco, order a 12” Pizza with pepperoni from Stromboli’s and have it delivered”.

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Today the vast majority of online searches go through third-party sources such as data aggregators, governmental agencies and consumers. The net result of this third party sourcing has been to produce “best guess” data that can often miss or misstate the target data field.

YEXT developed a better way to source critical digital knowledge.  For example business clients use YEXT to update public facts about their brands. They are building their based on the rapid and ever changing nature of data.  So far the YEXT Knowledge Network offers over 100 services to more than 110 corporate clients and has over $150 million in annual revenue.  So could YEXT play a key role in AI,  the next big thing?

How YEXT Works

Most of us are familiar with big time search engines like Google, Google Maps, Facebook, Instagram, Bing, Cortana, Apple Maps, Siri and Yelp.  These pioneering companies are the major drivers in information search today.  However, we also know, their accuracy is not exactly ideal.  

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This is where YEXT steps in.  Their knowledge engine platform lets business manage their digital knowledge in the cloud and sync it to over 100 services including the kingpins of search noted above.

Intelligent Search is the structured information that a business wants to make publicly accessible. In food service it could be the address, phone number or menu details of a restaurant; in healthcare, the health insurances accepted by a physician or the precise drop-off point of the emergency room at a hospital campus; or in finance, the ATM locations, retail bank holiday hours or insurance agent biographies.

Artificial Intelligence Offers a Potential $10 Billion Market

Improving search results in general is nice but not very sexy.  It doesn’t make you want to beg for more information.  However, when you consider the role of Artificial Intelligence (AI) in our evermore data intense world, the importance of Intelligent Search and the opportunities for YEXT becomes a compelling story.  

The AI trend is already underway as YEXT is increasingly using the structured data on their platform to expand or add new integrations with vertically specialized applications, voice-based search and AI engines.

Just Right For Big Data Applications

YEXT customers use their platform to manage their digital knowledge covering over 17 million attributes and nearly one million locations. These customers include leading businesses in a diverse set of industries, such as healthcare and pharmaceuticals, retail, financial services, manufacturing and technology.

Major customers include: AutoZone, Ben & Jerry’s, Best Buy, Citibank, Denny’s, Farmers Insurance Group, H&R Block, HCA, Infiniti, Marriott, Michael’s, McDonald’s, Rite Aid, Steward Health Care and others. The list is growing.

Management believes the market for digital knowledge management is large and mostly untapped with over 100 million potential business locations and points of interest in the world equaling over $10 billion.  

Shooting For Acquisitions and Broad AI Penetration

Founded in 2006 by serial entrepreneurs Howard Lerman (CEO) and Brian Distelburger, President these two are typical software guys whose vision appears much more broad based the their current focus with YEXT.  Here is where the prospectus from their April 2017 IPO offers some mystery and excitement to the story.

Unlike most rapid growth tech companies YEXT had no urgent need to go public.  They generated almost $60 million in gross profit in 2016 before heavy marketing costs resulted in a loss of $26.5 million.  Even so, they still ended the year with $20 million in cash. That’s a fair distance from being destitute.

The company’s real need for the IPO was to establish a liquid public market for the stock. They raised about $123.5 million, all of which will go into the bank.  The company is debt free and there are no insiders selling stock.  Very interesting.

Strong  Financial Results

For the latest reported nine months ended October 31, 2017 revenues grew 38% reaching $122 million.  The good news is the gross profits reached a record 75% or $90 million.  All of this was spent on sales and marketing to expand the business.  When all the beans were counted, YEXT lost $50 million producing a $30 million negative cash flow.  The balance sheet remains liquid with $120+ million in cash and securities.

FYI: In spite of some top notch bankers underwriting its IPO and analysts from those same five firms covering the company, the stock has done almost nothing for investors.  This $1.1 billion market cap was recently hanging out around $12 about the same as the IPO price.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.3 stars on average, based on 24 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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Business

MoneyOnMobile: Aiming Big in South Asia

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Bitcoin and other cryptocurrencies maybe destine to take over the world of payments but that is not stopping other ambitious entrepreneurs.  In the past we have written about QPAGOS the nascent Mexico City based payments company and covered M-Pesa the name for payments in Kenya.

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Now comes MoneyOnMobile (MOMT:OTC) looking to create a payments business in South Asia where 95% of the population has no bank account.  Let’s take a look but before doing so, caveat emptor. MoneyOnMobile is a microcap that went public about a year ago. Its size and limited liquidity will not be suitable for everyone.

Going For The Gold Indian Style

Here is what the company does that makes MoneyOnMobile interesting. MoneyOnMobile is a mobile money service provider allowing Indian consumers, through its  to use mobile phones to pay for goods and services, or transfer funds from one person to another using simple SMS text functionality. Their vision is to connect the cash based Indian society of over 1.3 billion to the digital world.

They have established relationships with 350,000 retailers throughout 700 cities in the country. They serve over 200 million Indian customers, based on unique phone numbers, who have conducted a transaction with MoneyOnMobile.

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In India, only a small portion of the population use bank accounts and credit cards. Consumers typically prepay for these utilities with cash, either directly to utility providers or through distributors. MoneyOnMobile offers electronic wallet services (“M-wallet”), similar to carrying a prepaid debit card, using the consumer’s mobile phone.

MoneyOnMobile is not a rogue company operating outside the system. It holds a license to operate issued by the Reserve Bank of India and maintains custody of customer funds in accordance with India’s regulations. MoneyOnMobile claims it is ranked as one of India’s top mobile money providers based on the number of unregistered users who on their mobile money service.

How They Make Money

MoneyOnMobile charges a small fee for transactions and is developing several add on services.  For example, MoneyOnMobile purchases utility units, such as mobile phone minutes, at wholesale rates and resells these units to distributors.  Additionally, they process utility bill payments made by consumers and supply a range of services that are being tested on retailers intended to become a major player in the electronic payments processing business similar in the US to First Data or Fiserv.

Management Surprises

There is a natural bias when you come upon MoneyOnMobile to expect the founders to be one or more brilliant graduates of India’s Institute of Technology.  Wrong: the company is actually based in Dallas Texas and managed be some pretty savvy American guys.  Here are two key abbreviated bios.

Harold H. Montgomery, Chairman & CEO

Mr. Montgomery, age 57, has served in this position since April 2010.  Mr. Montgomery brings to the Board of Directors extensive experience in the payment processing industry.

Mr. Montgomery has served as an industry expert for the Federal Reserve Bank of Philadelphia Payment Card Center and the U.S. Congress as an expert witness for credit card reform legislation. He is a widely known industry authority, a speaker at regional and national trade shows and has written over 120 articles for Transaction World Magazine. Mr. Montgomery graduated from Stanford University where he received a BA (International Relations)

Will Dawson, Executive Vice President

Mr. Dawson has over 20 years of experience in the technology industry. Prior to MoneyOnMobile, Mr. Dawson was the Chief Operating Officer at a MasterCard and Smart Communication in Asia, the Middle East, Africa, and Latin America.

Brief History But Substantial Progress

The MoneyOnMobile service was launched just a few years ago in April 2011. Like many young companies MoneyOnMobile has yet to earn a profit and is operating with a substantial deficit net worth.  On the other side however, consumers seem to be taking to the service very rapidly and recent moves have strengthen the balance sheet.

The company released nine months results on February 22nd showing a 75% revenue gain to $6 million.  In the analyst conference call that followed, management pointed out how monthly revenues from January to December 2017 increased 210%: pretty impressive.

They also announced several financial moves to boost capital to finance daily operations and build the company for the future.  Among others, management raised $12.6 million in new equity capital, restructured $6.1 million in debt.

A Word About The Stock

MOMT is a microcap stock whose total value is just under $40 million.  The price has spent the last year below $0.75.  It currently trades around $0.50 having been as low as $0.20.  The fun fact is how there is literally no analyst coverage of the company.  So there should be little worry of Wall Street over hyping the MOMT name.

FYI: I bring this company to your attention for its interesting business model.  I do not own the stock and not compensated by them for this article.  Hope you enjoy reading about MOMT.

Featured image courtesy of Shutterstock. 

 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.3 stars on average, based on 24 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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Ethereum

Ethereum: Building A Lead In The Marathon

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A lot of what is written these days on cryptocurrencies fits into one of three categories. The first is a description of the latest price moves up and down.  We all know how much drama there is and that makes good headlines.  

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Let’s call the second category the SegWit syndrome where we receive a description of the latest breakthrough in blockchain technology written from a developer viewpoint: hard to read and nearly impossible to understand.

In the third category is all of the other highly qualified writers and journalists that I have not already insulted.  Apologies to all.

For more than 30 years as a Wall Street analyst, hedge fund manager and Director of Research, my approach is to access things from an analytical perspective.  Technology is constantly changing the world but the things that make for long term business success pretty much stay the same.  That is why our bias tends to favor the crypto giants Bitcoin and Ethereum.

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Focus On Ethereum

By now it is probably no longer necessary to describe Ethereum’s open source blockchain platform that features self executing smart contracts.  Everybody knows that by now, right?

As a business person and investor, I am drawn to the leadership already created by Ethereum founders.  Say what you will about Initial Coin Offerings, but Ethereum accounts for over 80% of that market.  But that is just surface stuff because if ICO were to stop overnight, the demand for Ether would not end.

One of the forces behind this prediction is the Enterprise Ethereum Alliance which is now just over a year old.  Membership totals somewhere near 300 companies from JP Morgan and MicroSoft down to much more modest enterprises.  The mission of EEA is to bring together Fortune 500 companies with blockchain experts.  This is a great selling tool for Ethereum and as the list grows, so does their competitive strength.

Capital And Competition

To be successful, it is critical to always keep an eye out for what is going on around your business.  It is a well turned phrase that if a business doesn’t disrupt itself, someone else will. That takes capital. These days capital is flowing into crypto in many different ways.

The Weird Journey of Algorand

Venture Capital are dying to find a way of tapping into the cryptocurrency wave.  As we pointed out in a recent article, VC’s have been wounded by things like crowdfunding and ICOs and looking for about any action.  That is when I came across MIT’s Algorand blockchain project.  It raised $4 million in seed money from two VC’s.  Now $4 million is chump change but still it made me ask, what were they thinking?

Here is how CoinDesk described the project.  Algorand constitutes a digital currency and transaction platform.  It represents the latest effort to build a wholly new blockchain aimed at tackling some of the perceived governance issues associated with distributed systems.

The Professor Speaks

The head of the Algorand is MIT professor,  Silvio Micali. In addition to spending 30 years in cryptography he is also a Turing Award winner.  So obviously he is no slouch.  But apparently all these years in academia has depleted his appreciation for Econ 101 which states that everyone behaves in a way to optimize profits.  Professor Micali and the Algorand platform appears to be forgetting the value incentives for crypto mining.

At a recent conference Macali explained his attitude and the Algorand approach in this way. “We must use incentives as a last resort.” “ When you put incentives out there, people learn how to use those incentives for making money in ways that are nearly impossible to predict.”  Wow, that sounds a lot like creative capitalism.

Crypto Socialism

Micali believes that miners who have invested lots of dough in expensive equipment are dealing in trivial computations and do not need to be rewarded.  Instead the Algorand platform uses “validators” who in return for doing trivial computations will not have to invest in expensive equipment.  

Coindesk describes Algorand as the latest effort to build a wholly new blockchain system. The best guess on a release date is sometime in the next year. Taking that statement at face value out of respect for the author, at this time,  investors in Ethereum have little to be worried about from competition.  In the meantime Ethereum founder Vitalik Buterin is working on something call a DAICO.  It is intended as an improvement on the current Ethereum ICO process.  As we suggested earlier, when a tech company disrupts itself, it reduces the chances of being overtaken by others.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.3 stars on average, based on 24 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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