Remarking on a U.S. Senate investigation that claims Apple avoided taxes on tens of billions of dollars by holding significant profits in three Irish subsidiaries, Ireland’s Finance Minister Michael Noonan said the country did not work out a special corporate tax rate of only 2 percent with Apple. “I do not want to be the whipping boy for some misunderstanding in a hearing in the U.S. Congress,” Noonan said during a parliamentary committee meeting on Wednesday.

In other words, if Apple was able to markedly reduce its tax bill in the U.S. and the rest of the world, it was because of a gap between different tax jurisdictions, not some magic deal with Ireland.

“Maybe there was a magician, but the magician wasn’t living down in Cork,” Noonan quipped. “Because [Apple] is not tax resident in Ireland, [it is] not liable to Irish tax.”

Noonan’s comments echo those made earlier in the day by Barry O’Leary, head of IDA Ireland, the agency responsible for industrial development in Ireland, and the one that would presumably have presided over Apple’s special tax avoidance deal — if there were one.

“It is very, very important to state that there is no special deal for Apple or any other company,” O’Leary told RTÉ radio. “I’m certainly in a position to say that nothing like that has been agreed by the Irish government. That’s definitely not the case. Just because you heard it yesterday in a Senate committee doesn’t mean … it’s factually correct.”

Indeed. There’s no special deal here, just some clever and totally legal tax planning on Apple’s part. Whose fault is that?

As I noted here earlier this week, “Maybe the Senate’s time is better spent overhauling the U.S. tax policy that has allowed Apple and other companies to legally minimize their tax liability in the first place. If what Apple was called before the Senate for doing isn’t illegal, isn’t the big policy question today simply whether it should be allowed to do it in the future?”

Asa Mathat / AllThingsD.com

That was the gist of Apple CEO Tim Cook’s testimony before the U.S. Senate’s Permanent Subcommittee on Investigations Tuesday: Apple is a good corporate citizen that pays all taxes due.

“We pay all the taxes we owe. Every single dollar,” Cook said during a Tuesday morning hearing. “We not only comply with the laws but we comply with the spirit of the laws. We don’t depend on tax gimmicks.”

No gimmicks, just standard U.S. tax code which, according to the Senate panel’s investigation, allowed Apple to pay little or no corporate taxes on at least $74 billion in profits over the past four years.

And to be clear, that’s not illegal. Indeed, the Senate investigation into Apple’s practices found no evidence that the company did anything but comply with tax law. This, despite the fact that investigators also found that three of Apple’s subsidiaries in Ireland claim to have no responsibility to pay income taxes to any country, and one of them that reported $30 billion in income over the past four years and didn’t file an income tax return for any of it.

Extraordinary, right? But those Irish subsidiaries? They’re authorized by U.S. law. They comply with all U.S. tax regulations. And they’re audited by the IRS. Which says far more about our flawed corporate tax system than Apple’s alleged abuse of it. Given the opportunity to shelter overseas profits from U.S. taxes, what company wouldn’t take it?

As Martin Sullivan, chief economist at nonprofit Tax Analysts, told the Washington Post, “[Apple] would be stupid not to do it. It’s the loopholes in the U.S. tax laws that makes this all possible. All their competitors are doing it.”

If that’s the case, maybe the Senate’s time is better spent overhauling the U.S. tax policy that has allowed Apple and other companies to legally minimize their tax liability in the first place. If what Apple was called before the Senate for doing isn’t illegal, isn’t the big policy question today simply whether it should be allowed to do it in the future?

“[These] are not issues that arise from the Irish taxation system,” Ireland’s Deputy Prime Minister Eamon Gilmore said Tuesday, responding to a U.S. Senate investigation that alleges that Apple dodged taxes on tens of billions of dollars in profits held in Irish subsidiaries. “They are issues that arise from the taxation systems in other jurisdictions and that is an issue that has to be addressed first of all in those jurisdictions.”

Gilmore’s comments come ahead of Apple CEO Tim Cook’s testimony before a U.S. Senate hearing into the company’s offshore tax practices. Cook is expected to be grilled on Senate investigation findings that allege Apple moved billions of dollars in profits to subsidiaries in Ireland to significantly reduce its tax liability. Apple vehemently denies this, arguing that it does not use its Irish subsidiaries as “tax gimmicks.”

Asa Mathat / AllThingsD.com

Apple has been accused by the Subcommittee of creating the “Holy Grail of tax avoidance,” and Cook is travelling to D.C. well armed to defend the company from such accusations. He’ll present some 18 pages of prepared testimony touching on everything from the “extraordinary” sums Apple pays annually in corporate income tax to the rationale for its massive foreign cash holdings and a careful rebuttal to allegations that it uses its Irish subsidiary to avoid U.S. taxes. On that last issue, which has drawn a fair amount of scrutiny, the company’s argument is particularly pointed:

According to Cook’s prepared testimony, “Apple wants to make clear to the Subcommittee that the Company does not use its Irish subsidiaries or any other entities to engage in the following tax practices that were the focus of the Subcommittee’s September 20, 2012 hearing, entitled Offshore Profit Shifting and the U.S. Tax Code. Specifically, Apple does not move its intellectual property into offshore tax havens and use it to sell products back into the U.S. to avoid U.S. tax, nor does it use revolving loans from CFCs to fund its domestic operations.”

Also included in Cook’s testimony is a condemnation of the current U.S. tax system, which Apple argues “undermines U.S. competitiveness,” and a proposal for reforms that might encourage companies to repatriate their offshore cash.

Apple has always believed in the simple, not the complex. This is evident in the Company’s products and the way it conducts itself. In this spirit, Apple has recommended to the Obama Administration and several members of Congress – and suggests to the Subcommittee today – to pass legislation that dramatically simplifies the U.S. corporate tax system. This comprehensive reform should:

• Be revenue neutral;
• Eliminate all corporate tax expenditures;
• Lower corporate income tax rates; and
• Implement a reasonable tax on foreign earnings that allows free movement of capital back to the U.S.

Apple recognizes these and other improvements in the US corporate tax system may increase the Company’s taxes. Apple is not opposed to such a result if it occurs in the context of an overall improvement in efficiency, flexibility and competitiveness. Apple believes the changes it proposes will stimulate the creation of American jobs, increase domestic investment and promote economic growth.

Cook’s testimony comes amid increased government scrutiny of Apple and its overseas cash holdings. As of the end of the March quarter, the company was holding about $100 billion outside the United States, with no intent of repatriating it under current U.S. tax law.

Here’s Cook’s testimony in its entirety, and below it the Senate Subcommittee report accusing Apple of avoiding some $10 billion in taxes per year.

Apple_Testimony_to_PSI

Subcommittee-Memo-on-Offshore-Profit-Shifting-Apple

Other investors in the round include Kernel Capital and ACT Venture Capital (two Irish VC firms) and Enterprise Ireland, a government-backed development outfit. Cloud software company VMware is also an investor.

FeedHenry specializes in providing a cloud-based platform-as-a-service for developing and deploying mobile applications aimed at large organizations. It also runs what it describes as a “backend as a service” that helps get mobile apps working with existing enterprise applications. Its partners include Rackspace, Telefonica, Hewlett-Packard and VMware’s open source platform service, Cloud Foundry.

It’s also a would-be rival to Parse, the mobile development firm that was acquired by Facebook last month.

Yes, it’s possible to stay on top of the news entirely from within Twitter and Facebook … but it takes work.

Following the right number of people (so as not to get overwhelmed) posting about a broad variety of topics (so as not to leave oneself ignorant) is an inexact and tedious science.

And call me cynical if you must, but I don’t trust my real-life friends to keep me informed, either: Absent the professional news organizations I follow there, my Facebook news feed would be largely pets, music videos and distressed chatter about how winter is, evidently, cold in some places.

All of this is a roundabout way of making the case for NewsWhip, a Dublin-based startup trying to beat Twitter and Facebook at their own social-news capabilities.

NewsWhip claims its site automatically pulls in and ranks the best trending stories of the moment from Twitter and Facebook, based on aggregated and weighted data of what the world is tweeting, sharing, liking and commenting on. The faster a recent story is spreading online, the higher it moves in the rankings.

CEO Paul Quigley said that speed is his “fundamental metric.”

“If a story has 10,000 shares and is 12 hours old, it won’t necessarily be a big deal,” he said. “We only care about how many shares it got in the last one to two hours, or even 30 minutes.”

Users of the free site or mobile app are greeted with a single column of stories from around the Web, which can be filtered by topic or location. A sister site for news professionals, Spike, lets paying subscribers filter even further by time intervals (“published in the last hour,” “published in the last three hours,” and so on).

Quigley’s pitch is that NewsWhip and Spike are better at surfacing trending news topics than Twitter and Facebook because the filter bubbles created by whom we follow “can cause us to become isolated from alternative ideologies to our own.”

But does it work? This isn’t a review, but I will say the algorithm would need some work before I could make NewsWhip my first stop for news. Unsurprisingly, the stories that gain the most speed and, consequently, the most prominent placement on NewsWhip are very “social-friendly.”

So you’ll see a mix of stories that provoke outrage sharing top billing with pop-culture watercooler fodder in the default “Worldwide” section, and not so much “real” worldwide news of the same moment, which usually makes it to the top of that other little aggregator, Google News.

And within certain topics, the absence of human editors is sorely noticed: I came to the technology section yesterday afternoon expecting something similar to the homepage of (human-edited) Techmeme, with stories about Microsoft’s Q2 or the rocky launch of Twitter’s video app, Vine.

No such luck. Instead, one of the top articles in tech was “GRAPHIC: Girl Puts Apparently Bloody Tampon Where It Should Never Go.” Thanks, but no thanks, Huffington Post.

(I’ll leave the inevitable hand-wringing about what the popularity of these articles says about society, or whatever, to the commenters.)

Still, NewsWhip has potential amid a crowded field of curators and aggregators, and even in the short term it could be a decent alternative news source for, as one example, the majority of American adults who have never seen news on Twitter or Facebook. It’s a good surface glance at the zeitgeist, and for some casual newsreaders, that’s enough.

The company paid a total of $1.5 billion in worldwide income taxes in 2011, avoiding an estimated $2 billion more by moving the equivalent of 80 percent of its profit to Bermuda, Bloomberg reported today.

Google’s effective global tax rate was 21 percent last year, less than half of what it might have been expected to pay in the United States.

To keep more of its money in its pocket, Google employs a roundabout strategy of attributing most of its revenue to its Ireland sales office, and then having that subsidiary pay royalties, channeled through a Dutch subsidiary to avoid holding tax, to a separate shell company that pays taxes in Bermuda.

What Google is doing is complex and effective and not new — it’s apparently known to those in accounting as a “Double Irish” combined with a “Dutch Sandwich” — and Bloomberg has done a bunch of reporting on the topic over the years that is summarized here.

The Google strategy appears to be legal, but governments around the world aren’t happy about it. France, the U.K., Italy and Australia are all looking into the matter, Bloomberg notes.

Google has not yet responded to a request for comment.

Dublin has become a popular spot for Silicon Valley tech companies like Google, Facebook and Twitter to set up shop due to costs, taxes, language, potential employees and other factors. Dropbox hasn’t chosen a specific building yet or appointed anyone to be head of its international operations, but it’s looking and recruiting now.

It’s appropriate for Dropbox to go international at this point in its life because the majority of the company’s users are outside the U.S., said CEO Drew Houston on Monday. Actually, it’s been that way from the beginning.

Today, a third of Dropbox’s users are in Europe. Its 100 million total users live in more than 200 countries.

For Dropbox, expanding into a faraway timezone is key, Houston said. The Dublin office will be dedicated to all sorts of workday-dependent businesses like sales account management, user operations and support.

What about engineering? “R&D will probably stay in San Francisco,” Houston said. “It’s important to keep everyone together.” Still, he said he feels it’s important that all Dropbox offices — make that both Dropbox offices — share the same team culture.

Internationalization has perhaps been less of a challenge for Dropbox than other companies. Dropbox is currently localized in eight languages, but Houston noted that sharing files and collaborating are a cross-cultural phenomenon. “The product is really simple,” he said, “so localization hasn’t been a barrier like with more complicated products.”

Rao (pictured right) will be joining the online communications network as VP of international revenue, and will be starting in April in San Francisco. In that job, he’ll be in charge of setting up direct sales operations in countries and in regions where Twitter is ready to monetize.

At Google, Rao was most recently head of Google’s display ads business for Asia.

McIntyre (pictured left) has joined Twitter as a director of online sales and operations, which is its self-serve product that will debut to small businesses in March. He will be based in Dublin, Ireland. He was most recently working on Google’s international self-serve ads team in Ireland.

Both will report to Twitter sales head Adam Bain, who heads a staff of 120 employees in the U.S., the U.K., Japan and Ireland.

The pair were not the only Google hires of late at Twitter. The company recently hired U.K. YouTube sales head Bruce Daisley to run its entire sales team there.

You might be surprised that what Ireland has to say about regulating Facebook privacy is terribly important — but it actually is. Because Facebook’s international headquarters are in Dublin, this local commission oversees Facebook’s compliance in all regions other than the U.S. and Canada.

Facebook agreed to make changes in time for a follow-up Irish Data Protection Commission audit in July 2012. As presented in a Facebook Europe blog post, they include:

• Creating additional notifications explaining photo tagging using facial recognition (which has been a particularly contentious feature in Europe)
• Reducing data retention and logging for people who are not logged into Facebook (so-called “logged-out cookies” and alleged “shadow profiles” of non-members have been another reason for recent outcry)
• Telling users more about how to control when their information is given to Facebook platform applications

As compared to Facebook’s recent settlement with the American Federal Trade Commission, the Irish audit seems to be about more up-to-date privacy issues (much of the FTC stuff dated back to 2009). The FTC settlement is also a longer-term arrangement, with Facebook agreeing to 20 years of privacy audits. And Mark Zuckerberg didn’t give Ireland a formal apology, admitting to making “a bunch of mistakes.”

(Image copyright Peter Gerken and licensed for reuse under Creative Commons license)

Please see the disclosure about Facebook in my ethics statement.

It’s a big, wide and very digital world out there and that’s why I’m headed around the globe–quite literally–for the next week.

First stop, due east of San Francisco, where I arrived today in Munich, Germany, to moderate several sessions for Hubert Burda Media’s annual DLD conference.

That includes interviewing a whole lot of players I see all the time in Silicon Valley, including investor Reid Hoffman, Accel Partners’ Jim Breyer and Google sales majordomo Nikesh Arora, as well as the two hottest start-up leaders on the Web, Groupon’s Andrew Mason and Dennis Crowley of Foursquare.

And while there are even more U.S. techies here–many on their way to the World Economic Forum in Davos, Switzerland–I like DLD because it gives me a chance to meet a lot of European entrepreneurs and also grok a different and global perspective on tech, media and more.

It starts Sunday.

Then, from here, even farther east. I head for Hong Kong, where I’ll be meeting my All Things Digital other half, Walt Mossberg and ATD’s secret brain Lia Lorenzano to meet with our Dow Jones partners and scope out a possible AsiaD conference in China in the fall.

We’ve had our international aspirations before that did not pan out–see one of the many videos I did for a possible EuroD in 2007, while we visited Dublin, Ireland–so nothing’s certain.

But we’re hoping we can pull off some kind of international conference in 2011, one of the many parts of the expansion of our D offerings, including more events and many additions to our reporting staff on the ATD Web site this fall.

I will be posting videos from both places, including another episode of “Where in the World Are Walt & Kara?”

Until then, enjoy this one from Dublin Castle in 2007:

]]> http://allthingsd.com/20110121/from-u-s-to-germany-to-china-boomtown-goes-around-the-digital-world-in-a-week/feed/ 3 http://allthingsd.com/20101222/dont-like-to-listen-to-music-on-the-go-sony-has-a-music-subscription-service-for-you/ http://allthingsd.com/20101222/dont-like-to-listen-to-music-on-the-go-sony-has-a-music-subscription-service-for-you/#comments Wed, 22 Dec 2010 13:21:46 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=27315 Hey! What if there were a subscription service that let you listen to any music you wanted, whenever you wanted?

Oh. That’s right. There are plenty of those already (Rhapsody, Napster, MOG, Rdio, Thumbplay, Spotify, etc.), though none of them have ever really broken through in a mainstream way.

Still, here’s one more: “Music Unlimited” from Sony, which launches in the U.K. and Ireland today, and is supposed to go worldwide next year.

In short, it appears to be like every other subscription service on the market, only much more limited.

That’s because while Sony gives customers access to some six million songs, via cloud-based streaming, it doesn’t allow them to take their music with them, on their phones.

That’s supposed to change eventually, but even when it does, Sony isn’t promising you’ll be able to listen to your tunes on an iPhone. A press release simply says the service “will also become available on a wide range of Sony’s portable devices, as well as on [Google's] Android-based mobile devices.”

And to be clear, it’s not as if Sony is giving this stuff away: It wants the same 10 pounds a month for its ”Premium” plan that Spotify charges its U.K. customers. And again, to beat this into the ground: Spotify lets you listen to whatever you want on your phone–that’s pretty much the whole point of these things.

If you’re still reading, you may want to click through to this AP story, in which Sony tries to argue that this is the kind of thing that will help it compete with Apple again. Personally, I think you’re better off looking at pictures of vintage Walkmans.

]]> http://allthingsd.com/20101222/dont-like-to-listen-to-music-on-the-go-sony-has-a-music-subscription-service-for-you/feed/ 2 http://allthingsd.com/20101221/livingsocial-ceo-has-big-plans-now-that-amazon-is-in-his-back-pocket/ http://allthingsd.com/20101221/livingsocial-ceo-has-big-plans-now-that-amazon-is-in-his-back-pocket/#comments Tue, 21 Dec 2010 15:07:27 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=871 Groupon’s co-founder and CEO Andrew Mason has stolen the spotlight recently, by appearing on the “Today Show” and being interviewed on “Charlie Rose.”

But it’s hard not to make news when you turn down a $6 billion buyout offer from Google.

Meanwhile, Tim O’Shaughnessy, CEO and co-founder of LivingSocial.com, has remained relatively quiet. As the head of the second-largest company in the local, group-buying space, it wasn’t because he didn’t have anything to talk about.

Just about 24 hours before Groupon’s rejection leaked out, LivingSocial announced it had secured $175 million from Amazon, and $183 million in total new investments. In that same release, the Washington, D.C.-based company confirmed that it was booking revenues of more than $1 million a day on average and is projected to book well over $500 million in revenue in 2011.

To be sure, Groupon and LivingSocial are pulling away from the pack when it comes to defining the nascent daily-deals market. O’Shaughnessy, who claims that the two have 90 percent market share combined, said: “I think the idea conceptually that you can buy things online and go interact with merchants in offline is starting to take hold and be widespread. But it’s really been less than two years…It’s definitely the first couple of innings right now.”

Here’s our interview with O’Shaughnessy:

eMoney: Give me an update on where your business is today.

O’Shaughnessy: As of yesterday [Dec. 16], we were in 136 markets. We launched five new markets yesterday. We tend to do them in batches, and five or eight will go out at once. Overall, we’ve been averaging a market a day.

What about up-to-date figures on uniques?

We are at more than 10 million, or I think the last number we said publicly was 12 million. That’s primarily Canada and the U.S. that are signed up for the daily deal. We are in five countries today. [LivingSocial is in the U.S., Canada, the U.K., Ireland and Australia.]

What’s the competition like internationally?

Groupon has been acquisitive, and they’ve become established in lots of places. The U.S. is the most mature by a large margin, and there’s some countries with a few players that have established themselves, and finally, there’s some countries out there that’s a fairly green-field environment.

It’s fairly established that Groupon is No. 1, and LivingSocial is No. 2. But there’s a huge debate about who is No. 3?

There’s a pretty big gap. One of the things I’ve said is that it’s a pretty easy business to get into. All you have to do is know how to process a payment, and have a brother-in-law that has a restaurant that is willing to participate. But it’s a hard business to scale.

We have a competitive spreadsheet with 200 names on it, and if you do a couple of filters on how many deals someone has run, starting with 100, the vast majority drop off. And then if you up it to 500, you are up to the top two. It’s a pretty big drop-off.

Six months ago, we [Groupon and LivingSocial] collectively had 90 percent market share, and last month that was still true.

In that time, the market got bigger, and some others have grown for sure, but our market share has grown quite a bit. The signal-to-noise ratio is off, relative to who is doing what.

Is that what gives you confidence?

That’s one data point to look at, but what gives me confidence is what I see and I know we do every day. The degree of effort that goes into it and how many things can go wrong when you are managing merchant relationships, that’s what gives me the confidence.

What about the critics who say there’s no loyalty in this business–a consumer will always go with the provider who has the best deal for the business they want to visit.

There’s some loyalty that’s there, and I think people buy through us pretty regularly. They know that it’s going to be a merchant that’s vetted, and we work really hard at that. We are a good solid legit company that’s able to deliver. People place value on that. The brand matters, and enhancing user trust is an important thing.

What about the critics who say the margin will erode over time?

I think that the erosion of margins is just like any single other business if you stop innovating and do the same thing over and over. If we continue to innovate and provide additional value to merchants, the value per dollar increases. I don’t tend to be hugely concerned about the margin front.

The conduit has been 50 percent off a service, but there’s additional value we can provide to merchant communities and consumer communities. Overall, we aren’t not going to do the same thing over and over.

Can you give me an example?

We’ve started working with merchants in completely different ways, and sometimes we are going and operating events. We just did something called “tubbing and tasting,” where we worked with three merchants.

You could pick 10 to 12 Saturdays, and you’d meet in Midtown Manhattan, where a coach bus would take you to a snow hill, where you’d go snow tubbing. At the lodge, there was a bonfire and s’mores, and a beer tasting with a bunch of microbrews.

In that circumstance, we worked with three merchants–a coach company, a ski mountain and a brewery–in an entirely different way than how they associate with folks. I think it cost $60 and it sold out virtually every Saturday in January and February. I don’t see anyone else doing that, by finding unique hand-picked, curated ways to work with local businesses.

So, how will you be working with Amazon?

Right now, our first step is focusing on getting the relationship from a financial perspective locked down, and we’ll figure it out at a later point.

I assume the funding will go toward expansion?

We will be very aggressive on additional market launches as we build up our brand and user base. It’s very much a global game, and this is a global opportunity. We’ve gone from one country to five, and we’ll likely continue to expand globally.

A lot of this year was laying a foundation and the building blocks, and adding more value for the merchants, like LivingSocial Escapes. It’s on fire right now. It’s a weekend getaway, or a “staycation.” They are curated packages that are within a short driving distance from where you live. We also have LivingSocial Family Edition, which has things parents can do with their kids.

Your plans include tripling your employee count next year to 1,800 and more than doubling the number of cities you are in to 300?

We will continue to be pretty aggressive. Earlier this year, we were in six markets and we added 130 markets this year. We are a little more mature and one would hope that means we could move faster next year. We were around 30 employees, and over 600 now. It’s been a pretty crazy ramp-up.

The timing of your investment was so closely timed to Groupon-Google’s negotiations.

I’m a firm believer that we can’t control what other people do. Obviously, the deal we did with Amazon takes time to put together. We had decided awhile ago, if we want to become the biggest player in local commerce, we should be aligned with the biggest e-commerce company. That’s a lot of [what was] driving it. The timing was very coincidental.

So, no regrets?

No, not at all. We are thrilled and excited and expect to gain more market share over the coming year.

]]> http://allthingsd.com/20101221/livingsocial-ceo-has-big-plans-now-that-amazon-is-in-his-back-pocket/feed/ 1 http://allthingsd.com/20101202/livingsocial-gets-175-million-amazon-investment-like-boomtown-said/ http://allthingsd.com/20101202/livingsocial-gets-175-million-amazon-investment-like-boomtown-said/#comments Thu, 02 Dec 2010 22:59:09 +0000 Kara Swisher http://kara.allthingsd.com/?p=38037

Amazon will invest $175 million in LivingSocial, the No. 2 player in the fast-growing social buying space.

(The press release is below.)

BoomTown reported yesterday that the massive investment was in the works.

The online retail giant’s big bet on the Washington, D.C.-based start-up comes in the wake of ongoing acquisition talks between Google and Groupon, the category leader in the local deals business.

While it appears to be a reaction to those discussions, sources said Amazon and LivingSocial have been talking for some time about a variety of deals between them.

Sources said the Amazon investment put a very hefty valuation of over one billion dollars on LivingSocial.

Interest in LivingSocial has heightened of late, given the $6 billion in cash, stock and earnouts that BoomTown has reported Google is considering ponying up to purchase Chicago-based Groupon, and grab ahold of its 12 million users across the globe and $500 million in annual revenue.

But LivingSocial–which has been thriving even in Groupon’s flashier shadow–has 10 million subscribers worldwide in more than 120 markets and five countries, including the U.S., Canada, the U.K., Ireland and Australia.

And, as LivingSocial noted when it announced its acquisition of Australia’s Jump On It recently, it is currently booking an average of more than $1 million a day and is projected to book well more than $500 million in revenue in 2011.

And that is what has attracted Amazon, which has almost no profile in this lucrative local space, despite some attempts at its own solution. It bought a small and quirky daily deals site, Woot, for $110 million in June.

But sources said that, rather than sell, LivingSocial management wanted to keep the company independent, and thinks a sale of Groupon will give it a huge opportunity for growth.

Why? Well, even though Groupoogle or Goopon are fun to say, the inevitable regulatory review could drag on, resulting in a slowing down of innovation in the bigger Google culture and the distinct possibility of newly rich Groupon execs flying the coop (in private planes).

More investment money should help LivingSocial move ahead faster. Sources also said there is likely to be deep integration between its and Amazon’s services.

LivingSocial announced in April that it had raised $14 million in a Series C round, after grabbing $25 million in a Series B venture funding only a month before. And it has raised $10 million on top of that since 2008.

Sources estimated at the time that the valuation for LivingSocial was several hundred million dollars.

The newest round was led by Lightspeed Venture Partners; earlier investors include U.S. Venture Partners, Grotech Ventures and former AOL head Steve Case.

Lightspeed also invested $8 million more on top of Amazon’s funding.

Here is the official press release:

LivingSocial Announces $175 Million Investment by Amazon.com

WASHINGTON, Dec. 2, 2010 /PRNewswire/–LivingSocial (www.livingsocial.com) has secured a $175 million investment from Amazon (Nasdaq: AMZN). LivingSocial has also secured an additional $8 million investment from Lightspeed Venture Partners. LivingSocial will use this investment to maintain a steady drumbeat of worldwide launches and overall business growth while continuing to serve more than 10 million subscribers across the U.S., Canada, UK, Ireland and Australia in more than 120 locations. Because of LivingSocial’s rapid expansion, the company is currently booking revenues of more than $1 million a day on average and is projected to book well over $500 million in revenue in 2011.

“To be the biggest player in the local commerce space there is no one better to work with than Amazon,” said Tim O’Shaughnessy, CEO of LivingSocial. “As the social shopping space continues to heat up, LivingSocial is committed to staying focused on providing the high level of quality that consumers and merchants have come to expect when working with us.”

As the online source to find amazing experiences at an unbeatable value, LivingSocial lets anyone experience the hottest restaurants, shops, activities and services in their area. The company has dedicated area experts on the ground in every location working directly with business owners, and constantly researching the best in local adventures to bring a savings of 50% to 70% for consumers.

Recently, LivingSocial expanded its business by acquiring adventure company Urban Escapes, and launching three new verticals including LivingSocial Family Edition, Campus Deals and LivingSocial Escapes, a travel site that offers unbeatable savings on curated adventures. In addition, the company continues a regular flow of launches–on average one per day–and has expanded its reach in Australia with a controlling stake in Jump On It, making it live in five countries.

]]> http://allthingsd.com/20101202/livingsocial-gets-175-million-amazon-investment-like-boomtown-said/feed/ 2 http://allthingsd.com/20101201/amazon-poised-to-make-a-major-strategic-investment-in-livingsocial-to-counter-groupoogle-threat/ http://allthingsd.com/20101201/amazon-poised-to-make-a-major-strategic-investment-in-livingsocial-to-counter-groupoogle-threat/#comments Wed, 01 Dec 2010 21:15:57 +0000 Kara Swisher http://kara.allthingsd.com/?p=37889

With the red-hot acquisition dance between Google and Groupon sucking up all the attention, it’s easy once again to ignore the No. 2 player in the fast-growing social buying space–LivingSocial.

But not everyone is–according to sources close to the situation, the Washington, D.C.-based company that also focuses on local deals is in advanced talks for a major strategic investment–as high as $150 million–by online retail giant Amazon, at a very hefty valuation of over one billion dollars.

Sources said there will also be a deep operating partnership between the pair, as part of the deal.

Sources said the investment negotiations with Amazon is not complete yet, of course, and could fall apart.

But interest in LivingSocial has heightened of late, given the $6 billion in cash, stock and earnouts that BoomTown has reported that Google is considering ponying up to purchase the category leader, Chicago-based Groupon, and grab ahold of its 12 million users across the globe and $500 million in annual revenue.

But LivingSocial–which has been thriving even in Groupon’s flashier shadow–has 10 million subscribers worldwide in more than 120 markets and five countries, including the U.S., Canada, the U.K., Ireland and Australia.

And, as the start-up noted when LivingSocial announced its acquisition of Jump On It recently, it is currently booking an average of more than $1 million a day and is projected to book well more than $500 million in revenue in 2011.

That is what is apparently attracting Amazon, which has almost no profile in this lucrative local space, despite some attempts at its own solution. It bought a small and quirky daily deals site Woot, for $110 million in June.

But, rather than sell, sources said LivingSocial management wants to keep the company independent, and thinks a sale of Groupon will give it a huge opportunity for growth.

Why? Well, even though Groupoogle or Goopon are fun to say, the inevitable regulatory review could drag on, resulting in a slowing down of innovation in the bigger Google culture and the distinct possibility of newly rich Groupon execs flying the coop (in private planes).

More investment money should help.

LivingSocial announced in April that it had raised $14 million in a Series C round, after grabbing $25 million in a Series B venture financing only a month before. And it raised $10 million on top of that since 2008.

Sources estimated at the time that the valuation for LivingSocial was several hundred million dollars.

The newest round was led by Lightspeed Venture Partners; Earlier investors U.S. Venture Partners, Grotech Ventures and former AOL head Steve Case.

A report of the Amazon interest in LivingSocial was first posted several weeks ago in a in VentureBeat, a day before BoomTown first broke the news of the Groupon and Google discussions.

Both Amazon and LivingSocial declined to comment.

But here is an October video interview I did with LivingSocial CEO Tim O’Shaughnessy on a recent visit to Silicon Valley.

The entrepreneur has worked at AOL, as well as at Case’s Revolution Health in Washington, before moving on to the local deals start-up.

Enjoy:

]]> http://allthingsd.com/20101201/amazon-poised-to-make-a-major-strategic-investment-in-livingsocial-to-counter-groupoogle-threat/feed/ 3 http://allthingsd.com/20100915/okay-its-not-just-buh-bye-at-yahoo-here-are-two-hires/ http://allthingsd.com/20100915/okay-its-not-just-buh-bye-at-yahoo-here-are-two-hires/#comments Wed, 15 Sep 2010 10:00:10 +0000 Kara Swisher http://kara.allthingsd.com/?p=33778

While it seems BoomTown is all about the who’s-leaving-Yahoo-now posts, it’s not so!

Case in point: Here are two folks the Silicon Valley Internet giant has just hired.

First, as announced in its Yodel Anecdotal blog yesterday, David Rice will join Yahoo (YHOO) as VP of Product for Media.

That means he will be managing the “strategy and execution for our News, Sports, Finance, Entertainment, Lifestyles, and Games product teams.”

Rice is from online video company Metacafe, where he was COO. He is also an ex-Yahoo, who worked as part of its international product team from 2005 to 2007.

Next is James Wildman, who will become managing director and VP of sales for Yahoo’s U.K. and Ireland unit.

He’ll start in January, after departing his job as managing director of Virgin Media’s ids advertising and media company.

]]> http://allthingsd.com/20100915/okay-its-not-just-buh-bye-at-yahoo-here-are-two-hires/feed/ 1 http://allthingsd.com/20100726/iphone-4-hits-17-more-countries-friday/ http://allthingsd.com/20100726/iphone-4-hits-17-more-countries-friday/#comments Mon, 26 Jul 2010 12:05:11 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=45490 The iPhone 4’s international roll-out begins in earnest this week. Come Friday, July 30, the device will go on sale in 17 more countries–Australia, Austria, Belgium, Canada, Denmark, Finland, Hong Kong, Ireland, Italy, Luxembourg, Netherlands, Norway, New Zealand, Singapore, Spain, Sweden and Switzerland. Left off the roll-out roll call, much to the dismay of its citizens, is South Korea, where regulatory issues are reportedly slowing things down. By September, the iPhone 4 should be in stores in 87 countries, making its global roll-out Apple’s fastest ever.

]]> http://allthingsd.com/20100726/iphone-4-hits-17-more-countries-friday/feed/ 0 http://allthingsd.com/20100507/ipad-goes-international-on-may-28/ http://allthingsd.com/20100507/ipad-goes-international-on-may-28/#comments Fri, 07 May 2010 13:08:14 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=40021 The international launch of the Apple iPad, which was delayed due to strong demand in the the U.S., will finally begin later this month.

Apple (AAPL) will start accepting pre-orders for both the 3G and Wi-Fi models on Monday, May 10. And on May 28, Apple will begin shipping units in Australia, Canada, France, Germany, Italy, Japan, Spain, Switzerland and the U.K.

The launch will continue in July when the iPad arrives in nine additional countries: Austria, Belgium, Hong Kong, Ireland, Luxembourg, Mexico, Netherlands, New Zealand and Singapore.

Apple has already sold more than one million iPads in the U.S. since the launch of the Wi-Fi-only model on April 3 and the 3G version on April 30. Given these sales figures and Apple’s supply issues to date, it will be interesting to see how the international rollout goes.

]]> http://allthingsd.com/20100507/ipad-goes-international-on-may-28/feed/ 0 http://allthingsd.com/20091215/intel-ex-chief-hoping-to-help-ireland-rebound/ http://allthingsd.com/20091215/intel-ex-chief-hoping-to-help-ireland-rebound/#comments Tue, 15 Dec 2009 08:30:39 +0000 Don Clark http://voices.allthingsd.com/?p=19117 After Japanese competitors nearly sunk Intel (INTC) in the 1980s, Craig Barrett helped the chip maker rebuild its manufacturing prowess. Now he’s going to lend Ireland a hand.

The former Intel CEO and chairman, who retired from the company in May, on Tuesday is being named chairman of a non-profit collection of executives called the Irish Technology Leadership Group. In that role, Barrett plans to work with other business and political leaders to restore the country’s competitiveness on the international high-tech scene.

Why Ireland? Barrett has at least three connections with the Emerald Isle.

For one, Barrett’s grandmother hailed from County Tyrone, part of Northern Ireland. As Intel’s former manufacturing honcho, Barrett also was closely involved with Intel’s decision to turn Ireland into one of its major manufacturing centers, after the U.S. and Israel. Intel started with what Barrett calls “a little motherboard place” near Dublin, later adding sophisticated fabs–the massive manufacturing plants that fabricate chips using silicon wafers–at Leixlip.

Read the rest of this post on the original site

]]> http://allthingsd.com/20091215/intel-ex-chief-hoping-to-help-ireland-rebound/feed/ 0 http://allthingsd.com/20091203/dell-polishes-off-polish-ops/ http://allthingsd.com/20091203/dell-polishes-off-polish-ops/#comments Thu, 03 Dec 2009 15:07:34 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=30167 Dell is unloading another PC factory. The company is selling off its two-year-old computer manufacturing plant in Lodz, Poland, to Foxconn, the world’s largest contract electronics manufacturer, for an undisclosed sum. The facility’s 1,600 employees will keep their jobs and continue to crank out Dell boxes under an outsourcing agreement written into the deal.

For Dell (DELL), which has closed its factories in Ireland and North Carolina this year, this move is one more step toward its goal of slashing $4 billion from its annual operating costs by early 2011. Said company spokesman David Frink: “[This] is part of our ongoing effort to become more efficient. The intent is to leverage the capabilities of (third-party manufacturers) so we can direct our resources to other areas of our supply chain so we can innovate and add value.”

PREVIOUSLY:

• There Once Was a Man Named Dell, Who Told 1,900 Workers “Go to Hell,” Redux
• There Once Was a Man Named Dell, Who Told 1,900 Workers “Go To Hell”…

]]> http://allthingsd.com/20091203/dell-polishes-off-polish-ops/feed/ 0 http://allthingsd.com/20091119/how-to-see-a-handball-watch-france-cheat-its-way-into-the-world-cup/ http://allthingsd.com/20091119/how-to-see-a-handball-watch-france-cheat-its-way-into-the-world-cup/#comments Thu, 19 Nov 2009 18:51:43 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=13080 In the U.S., this is no big deal, but in much of the world this is now the sports equivalent of the Zapruder film: French soccer star Thierry Henry cheating, via a handball, and propelling his team past Ireland and into next year’s World Cup.

The Web is full of chatter about yesterday’s game, but video is hard to come by. Again, this appears to be a case of Google’s (GOOG) YouTube flexing its ContentID system on behalf of copyright owners, in this case the European sports marketing company Sportfive.

This is a theoretical victory for content creators, who want to be able to control how and where their stuff appears on the Web. But since there doesn’t seem to be an approved video, it’s not really a solution. If it’s a story that’s attracting most of the world’s attention, someone’s going to find it, somewhere.

For instance, a bit of searching did yield these two, at least for now: A high-quality YouTube version of what appears to be a French broadcast, via the Los Angeles Times, and what appears to be a German highlight reel, via DailyMotion and FootyTube, which consistently has great soccer highlights, legal or not (thanks to Zen Web Solutions for the reminder).

France v Ireland Republic
by histormac

]]> http://allthingsd.com/20091119/how-to-see-a-handball-watch-france-cheat-its-way-into-the-world-cup/feed/ 0 http://allthingsd.com/20090925/a-tour-of-facebooks-london-office-plus-another-no-comment-but-in-a-charming-accent/ http://allthingsd.com/20090925/a-tour-of-facebooks-london-office-plus-another-no-comment-but-in-a-charming-accent/#comments Fri, 25 Sep 2009 07:01:58 +0000 Kara Swisher http://kara.allthingsd.com/?p=18815

On BoomTown’s trip to London earlier this week, along with a visit to Spotify, I stopped by the U.K. and Ireland offices of Facebook for a look-see.

Located just off once-swinging Carnaby Street–which is now essentially a place to shop for hip stuff–it’s a very small operation, mostly dedicated to advertising sales.

But I did run into some engineers too, at what is Facebook’s most important international outpost.

Still, while recently surpassing 300 million members worldwide, the Silicon Valley-based social networking site has been careful not to open offices all over the globe, a misstep that too many other U.S. Internet companies have made time and again.

Plus, I got a very fine stiff-upper-lip British version of “no comment” that I do love to hear from Facebook PR–this time from Sophy Silver, who did an excellent job of showing me around.

Here’s the video, as well as my tour in June of Facebook’s new HQ in Palo Alto, Calif., below that:

]]> http://allthingsd.com/20090925/a-tour-of-facebooks-london-office-plus-another-no-comment-but-in-a-charming-accent/feed/ 2