Startups

An investigation by the U.S. Senate has turned up some creative maneuvers used by Apple to avoid paying taxes on $44 billion of international income over the past four years. Yesterday, a bipartisan Senate subcommittee released a lengthy report detailing Apple’s tactics, which put the spotlight on Apple’s Irish subsidiaries, Apple Operations International and Apple Sales International. The report describes Ireland as a “tax haven” for Apple. Even though billions of dollars flow through the Irish subsidiaries, they apparently qualify as non-tax residents. Apple pays less then 2 percent of corporate sales tax for AOI and ASI in Ireland, and it hasn’t had to pay any taxes to the U.S. Apple isn’t alone in how it manages it offshore finances, but just like the recent scathing New York Times report which detailed its other tax avoidance tactics, the subcommittee is using Apple to demonstrate the wider problem of elaborate international tax holdings. Apple CEO Tim Cook will appear on Capitol Hill this morning to discuss the subcommittee’s findings. In a statement released yesterday, Apple said it “doesn’t use tax gimmicks,” and went on to note: Apple does not move its intellectual property into offshore tax havens and use it to sell products back into the US in order to avoid US tax; it does not use revolving loans from foreign subsidiaries to fund its domestic operations; it does not hold money on a Caribbean island; and it does not have a bank account in the Cayman Islands. Apple has substantial foreign cash because it sells the majority of its products outside the US. International operations accounted for 61% of Apple’s revenue last year and two-thirds of its revenue last quarter. These foreign earnings are taxed in the jurisdiction where they are earned (“foreign, post-tax income”). Reacting to the news, Ireland was quick to say that it wasn’t responsible for Apple’s low international tax rate, Reuters reports. Filed under: Business

At 10 a.m. PST today, Microsoft will reveal the next-generation Xbox video game console. GamesBeat lead news writer Dean Takahashi will be onsite at Microsoft’s campus in Redmond, Wash., reporting live and updating this article as the news breaks. Other GamesBeat writers will also be contributing to this post in real-time. Please check back for the  streaming broadcast, which will go live right at 10 a.m. PST. And right below the video window, you can catch our liveblog of the event. Filed under: Business, Games GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here! .blurb-cat-games hr { margin: 10px 0 10px 0; }

IBM’s jack-of-all-trades supercomputer Watson now has a new trade: customer service. IBM announced today Watson Engagement Advisor, a new application for Watson that lets it take all of its brainpower and apply it to answering questions from regular people rather than, say, doctors or Alex Trebeck. Think of it as Siri, but on a much larger scale. Imagine, for example, if you had a problem with your phone service bill (which I’m sure happens often). Rather than call your carrier and sit on hold for a half hour, you could talk to the company’s custom version of Watson, which could guide you through your bill and answer your questions in a natural, simple way. Watson could completely replace the uneven and inconsistent customer service experience with a single, uniform voice. And which company isn’t going to go crazy over uniform experiences? In keeping with the nature of machine learning, Watson gets better with time as it  learns the unique tastes and preferences of customers on both a macro and micro scale. This obviously makes it really enticing for commerce companies like Amazon, which are always on the hunt for better and more effective ways to sell people more stuff. So far, IBM says brands like Nielsen, MetLife,  and Royal Bank of Canada are all exploring how to apply Watson’s latest smarts to their businesses. All of this should make it clear how serious IBM is about the future of its supercomputer. The company says it expects data-analytics business to pull in $16 billion by 2015, thanks, in no small part, to the endless wonder of Watson.     Filed under: Big Data HealthBeat 2013 is a new conference showcasing how technology is transforming health care. We'll explore how IT is driving out inefficiencies on the hospital, practice, and patient levels. Check out full event details here, and register here. .blurb-cat-big-data hr { margin: 10px 0 10px 0; }

Popular social petition service Change.org has raised $15 million in new funding — cash that will help it further build up the “world’s largest petition platform.” Change.org provides an accessible way to enact social change and it makes it simple to create and sign petitions. The service has grown quite a bit in the last year, jumping from 6 million users in early 2012 to more than 35 million users today. More than half of Change.org’s users are outside the U.S. So far, the site’s users have won “thousands of victories.” Major wins spurred by Change.org petitions include Bank of America dropping its $5 debit card fees, Seventeen magazine committing not to Photoshop models, and having felony charges against high-school student Kiera Wilmot dropped. The new funding was led by Omidyar Network, the philanthropic investment firm created by eBay founder Pierre Omidyar and his wife Pam. Change.org CEO Ben Rattray Rattray told VentureBeat that his biggest priority was finding a funding partner who deeply believed in the company’s mission. “We’re trying to show that it’s possible to build a technology company focused on social impact, and we now have the resources to hire the tech talent needed to demonstrate that at scale,” Rattray told us. “As we’ve become more successful, we’ve been approached a number of times by traditional, for-profit venture capital firms interested in investing in the company, but we are only open to investment from social investors who are prepared to support that mission. … So we specifically sought out the Omidyar Network because of its unique alignment with our empowerment mission and the ability to support our scale.” Chris Bishko, an investment partner at Omidyar Network, will join Change.org’s board. The announcement was made in conjunction with the appearance of Rattray at VentureBeat’s HealthBeat conference, where he will be speaking today about grassroots patient empowerment. More people than ever are changing the health care landscape through petitions and online activity, and Change.org is part of that. Top photo via Change.org Filed under: Deals

This sponsored post is produced by StackSocial. We all love capturing video on our iPhone and now thanks to Kogeto we can take amazingly awesome 360 degree video with the click of a button. It’s that simple. Not only is the video quality great but the interactive 360 views are unreal. Any serious iPhone user is all about innovative and well designed products when it comes to add-ons, and this one truly sets itself apart from the rest of them. When Kogeto says they’re trying to help you share the world around you…they’re dead serious. The Dot raised over $100,000 on Kickstarter and is now in full force changing the way you see the world…one video camera at a time. And VentureBeat is going to help you get it at the low price of only $27.99! (Note: This offer is available ot continental US customers only.) Here’s what you can do with the Dot on your iPhone 4/4S: Shoot: Snap Dot onto your iPhone 4 / 4S, download our free Looker app, and press record. Dot will capture everything around you. Capture the crowd and the band. Film the beach at the same time as the sand volleyball team. Record a virtual tour of your dorm without missing a thing. View: The video on your screen is only the beginning. Swipe or click and drag across the screen to swivel around in 360°. Or switch modes and view all 360 at once in super-widescreen. You get to see everything. Share: Your Dotspot is ready to share with the world via email, Facebook, Twitter, or Kogeto.com with just a single click. Got a blog? Tumblr feed? Website? You can embed your videos there – or anywhere! This Dot is specifically designed for iPhone 4/4S users. You’ll receive a black strap that snaps onto your iPhone and then you’ll be able to snap in the video lens which will allow you to capture your video. For more on this offer – including all important reminders – please visit the VB Store. This offer won’t be around for long, so pick up a Dot for only $27.99 from the VB Store and start shooting the world in 360° today! Sponsored posts are content that has been produced by a company, which is either paying for the post or has a business relationship with VentureBeat, and they’re always clearly marked. The content of news stories produced by our editorial team is never influenced by advertisers or sponsors in any way. For more information, contact garrett@venturebeat.com. Filed under: Gadgets

Kudos to Apple’s finance lawyers, who are the Cirque Du Soleil of legal contortionism. On the eve of live testimony from CEO Tim Cook, CFO Peter Oppenheimer and Phillip Bullock, head of Apple’s tax operations, a scathing congressional investigation of Apple’s tax dodging strategy reveals how the computer giant avoided $13.8 billion in taxes through a clever labyrinth of offshore tax havens, shell corporations, and paper shuffling. “The ability to pay taxes of less than 2% on all of Apple’s offshore income gives the company a powerful financial incentive to engage in convoluted tax planning to avoid paying U.S. taxes,” notes the report from Senators Carl Levin and John McCain of the Permanent Subcommittee on Investigations. The 37-page report is jam-packed with all the edge-of-your-seat thrills one would expect from a congressional report on multinational tax policy; we summed up the good parts so you can concentrate your valuable workday procrastination on cat videos. 1. Ireland: Come For The Beer, Stay For The Tax Haven In addition to the majesty of rolling hills, towering waterfalls, and a rich culture, Ireland also welcomes billion-dollar multinational corporations with an appealing 12% tax rate. Even better, in a sweetheart deal with the makers of the laptop used to type this story, the Irish have offered Apple a tax rate below 2%. At least since 2009, according to the report, it was, on average, 0.06%. Senate investigators found this curious, since nearly all of Apple research, development, and board meetings are conducted in the United States. So, when they quizzed Apple about where it calls home, “Apple responded that it had not determined the answer to that question.” As a result, Apple has had an effective tax rate of just 20.1%, below the 24-32% it tells investors (according to the report), and well below the 35% the U.S. government wants it to pay. In 2011, it paid a mere $2.5 billion. 2. Sell To Yourself and It’s (Technically) Not Income On paper, Ireland would appear to buy enough Apple products to reconstruct Blarney Castle from discarded iPods, but Apple’s Irish HQ legal entity is merely a passthrough shell corporation to funnel profits to tax havens, says the report. The investigators determined that Apple cleverly splits itself into entities around the world, charged with selling products and intellectual property at distorted prices. For instance, Apple Sales International, a shell corporation entitled to Apple Inc’s intellectual property, sells products to its worldwide retailers at a “substantial” markup, technically raking in most of the profits from goods sold in stores. “For example, in 2011, Apple reported $34 billion in income before taxes; however, just $150 million of those profits, a fraction of one percent, were recorded for Apple’s Japanese subsidiaries, even though Japan is one of Apple’s strongest foreign markets. ASI, meanwhile, reported $22 billion in 2011 net income,” explains the report. 3. Choose Which Entity Pays Taxes (Hint: The One With The Lowest Income) Apple avoids taxes on its $102 billion in offshore holdings, thanks to an unintentional loophole that allows the company to decide which subsidiary gets taxed. In an effort to simplify the global tax rules, the IRS permitted multinationals to “disregard” sub-entities that were normally taxed (the so-called “check-the-box” rule). Apple structured the relationship so that its tax-haven entities received billions in otherwise taxable dividend payments from subsidiaries it had elected to be among its disregarded entities. In other words, according to the IRS, the payment within corporations is treated as a kind of internal transfer, which Apple funneled to its tax-friendliest locations. “Those figures indicate that Apple’s Japanese profits were being shifted away from the United States to Ireland, where Apple had negotiated a m

The barrier to entry for the Unity game rendering engine for developers on iOS and Android has gotten lower, as use of Unity tech is now free on both mobile platforms. Unity CEO David Helgason announced the changed terms today during the Unite Nordic trade conference, according to Pocket Gamer’s Keith Andrew. The dropping of licensing fees for the engine’s basic tier means that features which once cost $800 now carry no charge at all. The change in pricing structure is all about building momentum for indie game creators and studio, according to Helgason. Unity has shifted to a free licensing structure on the web and on desktop platforms, and has long hoped to bring the same model to its mobile platform products, according to Pocket Gamer. Later on, the same deal could be made available to Windows Phone 8 and BlackBerry 10, the company says. Unity 4 on iOS and Android offers a number of impressive features, including real-time shadows and multi-screen AirPlay support for building unique game experiences. For Unity, offering the basic license free to game devs is essentially also lowering the barrier to their revenue-generating paid tiers and offerings, including assets for in-game use and Pro and Basic add-ons, team licenses and more. For mobile devs, it gives them a level of access to tools used by some of the biggest and most successful gaming studios on Android and iOS, including Rovio (which uses Unity for Bad Piggies), as well as those used by hit indies like Year Walk, The Room and more. This is a good thing for the independent games development community, and hopefully it means we’ll see even more top-tier titles coming out of brand new places. The iOS and Android mobile software stores aren’t quite the Wild West of new and exciting indie content they once were, but they still provide small developers more exposure and opportunity than other platforms, and maybe this will help that continue to be true in the face of increasing investment in mobile software from big name game studios.

Sept. 9 - 10, 2013San Francisco, CAEarly Bird Tickets on Sale Leading corporate performance management (CPM) company Adaptive Planning has raised a massive $45 million in its fourth and final round of funding with a goal to further dominate the CPM space, the business said Tuesday. Adaptive Planning offers a suite of budgeting, planning, forecasting, and data discovery software in the cloud. Its software works for small businesses all the way up to large enterprises, which now represent 25 percent of its business. The company had 1,500 customers at the end of 2012 and it estimates it will have 2,000 customers at the end of this year. Big name customers come from all kinds of industries including Box, Coca-Cola, Johnson & Johnson, Jive Software, NBC News, Nissan, Red Hat, Toyota, and Zipcar. “We address all of the CPM market — and it’s a huge market,” Adaptive Planning CEO John Herr told VentureBeat. “Most of our new customers move to us from Excel. We help customers upgrade from ‘Excel hell’ to Adaptive.” Adaptive Planning competes with solutions from Oracle, IBM, and SAP, but its software-as-a-service has made it a leader in its space. And now the company will have more cash to hire more employees, further refine its software, and create more partnerships with resellers. That last point is particularly important for the company, as it already has a strong reseller network of more than 400 “channel partners.” These partners help sell the product to more businesses and give it better access to international customers. One such partner is NetSuite, which offers Adaptive-based Financial Planning service that is integrated with NetSuite’s software. The huge new funding round was led by new investor Bessemer Venture Partners (BVP), with participation by existing investors ONSET Ventures, Norwest Venture Partners, RBC Venture Partners, Cardinal Venture Capital, and Monitor Ventures. BVP partner Byron Deeter will join the company’s board. “The business is on fire and this investment is a strong endorsement of what we’re about,” Herr said. “Many BVP companies are also customers of Adaptive.” Including the new round, Adaptive Planning has raised about $85 million to date, including a $22 million round a little over a year ago. Herr said this will be the last round of venture capital funds raised for the company and that it will explore the option of going public “in the next couple years.” He also indicated other “exit opportunities” were on the table. “We’re open to all positive outcomes,” Herr said. Mountain View, Calif.-based Adaptive Planning was founded in 2003 and has 200 employees. Herr said the company aims to double its number of employees in the next 12 to 18 months. Businessman with tablet via ollyy/Shutterstock Filed under: Cloud, Deals .blurb-cat-cloud .event-boilerplate { width:278px; margin:0px 0px 10px 20px; padding:10px; float:right; border:1px solid #e4e4e4; font-family: 'Open Sans', sans-serif; color:#000; } .blurb-cat-cloud .event-boilerplate .logo-date-wrap { width:100%; display:block; float:left; margin-bottom:8px; } .blurb-cat-cloud .event-boilerplate img { float:left; } .blurb-cat-cloud .event-boilerplate .date-location { float:right; font-size:12px; line-height:14px; text-align:center; padding-left:7px; padding-top:5px; padding-bottom:3px; border-left:1px solid #e6e6e6; } .blurb-cat-cloud .event-boilerplate .cta { display:block; clear:both; width:100%; border-radius:5px; border:1px solid #1864b1; color:#fff; text-shadow: 0px -1px 0px rgba(0,0,0,0.3); text-align:center; text-decoration:none; font-weight:600; font-size:18px; line-height:17px; padding:4px 0px 6px 0px; background: #1f80e4; background: -moz-linear-gradient(top,  #1f80e4 0%, #1862ae 100%); background: -webkit-gradient(linear, left top, left bottom, color-stop(0%,#1f80e4), color-stop(100%,#1862ae)); backgr

July 9-10, 2013 San Francisco, CA Early Bird Tickets on Sale While messaging app MessageMe just raised $10 million in funding, that announcement was missing key info about the app’s growth. Now the company has come forth with some new stats that are impressive including that the service now has 5 million users just 75 days after launch. Competing with popular apps like WhatsApp and Facebook Messenger, MessageMe offers iOS and Android applications that let you share rich messages and content with family and friends. On top of standard text, you can also send images, YouTube videos, iTunes tracks, voice recordings, and more. Ten days after launch, MessageMe users were uploading two images per second. Today, they are uploading eight images per second. More than 1,500 notifications are sent to Message users each second. “At MessageMe, our ambition lies in the goal to change the way people communicate around the world, and the mediums through which they connect,” the company said in a blog post today. “From a text message, to a song clip, to those personal moments with your best friends, we’ve built a product which is now used by more than five million people to communicate one day to the next.” MessageMe only launched its apps in early March but already has attracted $11.9 million in funding. Investors include big names like Google Ventures, Andreessen Horowitz, First Round Capital, True Ventures, and SVAngel. Next up, the company says it has “groundbreaking additions in the pipeline.” We’ll see if it can deliver on that promise. Photo via MessageMe Filed under: Mobile .blurb-cat-mobile .event-boilerplate-mobilebeat { width:278px; margin:0px 0px 10px 20px; padding:10px; float:right; border:1px solid #e4e4e4; font-family: 'Open Sans', sans-serif; color:#000; } .blurb-cat-mobile .event-boilerplate-mobilebeat .logo-date-wrap { width:100%; display:block; float:left; margin-bottom:8px; } .blurb-cat-mobile .event-boilerplate-mobilebeat img { float:left; } .blurb-cat-mobile .event-boilerplate-mobilebeat .date-location { float:right; font-size:12px; line-height:14px; text-align:center; padding-left:7px; padding-top:5px; padding-bottom:3px; border-left:1px solid #e6e6e6; color:#585a5b; } .blurb-cat-mobile .event-boilerplate-mobilebeat .cta { display:block; clear:both; width:100%; border-radius:5px; border:1px solid #1864b1; color:#fff; text-shadow: 0px -1px 0px rgba(0,0,0,0.3); text-align:center; text-decoration:none; font-weight:600; font-size:18px; line-height:17px; padding:4px 0px 6px 0px; background: #1f80e4; background: -moz-linear-gradient(top, #1f80e4 0%, #1862ae 100%); background: -webkit-gradient(linear, left top, left bottom, color-stop(0%,#1f80e4), color-stop(100%,#1862ae)); background: -webkit-linear-gradient(top, #1f80e4 0%,#1862ae 100%); background: -o-linear-gradient(top, #1f80e4 0%,#1862ae 100%); background: -ms-linear-gradient(top, #1f80e4 0%,#1862ae 100%); background: linear-gradient(to bottom, #1f80e4 0%,#1862ae 100%); filter: progid:DXImageTransform.Microsoft.gradient( startColorstr='#1f80e4', endColorstr='#1862ae',GradientType=0 ); }

Last week we reported that MessageMe, one of the latest messaging apps to hit the smartphone market, had picked up a $10 million Series A round of funding, and today, the company is officially confirming the news, along with some more details on how it’s been doing in the 2.5 months since it launched. It now has 5 million users across both iOS and Android — a five-fold increase on the 1 million that downloaded the app in its first 10 days. MessageMe aims to carve out a name for itself by offering more ways than the rest of the pack for users to communicate with each other on its messaging platform. In its case, notifications — via text messages, pictures, doodles, video, voice, location and music sent from one user to another — have risen three-fold, to 1,500 per second from 500 65 days ago. From what we understand, although MessageMe is partly founded by people with extensive gaming experience — Arjun Sethi and Justin Rosenthal both worked together at social games company LOLapps (acquired by 6waves in 2011) — it will be messaging, not games, that will be the revenue driver for the company. Also: no plans to add in advertising, nor to charge for the app. Instead, it will build out premium messaging features such as stickers and money transfers. The latter is shaping up to be a particularly interesting area, with not only Google swaggering into the ring, but as of yesterday Square as well, alongside a number of other companies like Venmo and established names like PayPal and Western Union already dabbling in features like this. As we reported last week, and as confirmed by the company today, this latest round was led by John Lilly, the former CEO of Mozilla who is now a partner at Greylock; Lilly now joins the board of LittleInc Labs, makers of MessageMe. Other investors in the round include previous backers True Ventures (where MessageMe was first incubated), First Round Capital, Google Ventures, SVAngel, Resolut.vc, Andreessen Horowitz, and Social+Capital Partnership. The company’s angels also include Airbnb’s Brian Pokorny, Hiten Shah, Eric Wu and TinyCo CEO Suleman Ali. The company is still in an early and small stage: currently there are only 10 people working for TinyInc Labs. I caught up with co-founder Sethi to speak a little more about the direction of the company: About those greyed-out tabs on your app. When are you launching stickers and money? We’ll start rolling out new features in about a month, although we’re already doing some staged rollouts in beta. Stickers will feature our own content, as well as branded content, from companies that we’ll be working with. Money will be done in partnership with someone. A lot of the new features will come first on Android. Although it’s an app that we launched only last week, it’s easier to add and develop new features on Android. What about Windows Phone and BlackBerry? We are taking a close look at all the platforms out there, including web, Windwos and BlackBerry. We’ll see where most of the demand is and what users are asking for to decide what the next step will be for MessageMe. Talk to me a bit about your thoughts on paid messaging services like WhatsApp or those that rely on adds for revenue. There is no paid version planned. We’re definitely adamant on keeping it free, simple and fast. We’re also not doing any banner ads or third-party data stuff. We want to make sure that everything you do is private and secure. Even with premium services, you will pay or have option to opt out before you see or use it — that will come into play with how we roll out stickers and accessing content. WhatsApp has stolen a march on the messaging apps world with its seemingly global appeal, with Facebook Messenger also doing this to a lesser extent. Meanwhile others have a very regional focus. Where do you sit in that spectrum so far? Outside of the U.S. most of our growth has been in Europe, and the UK specif