First health investment from Kleiner Perkin's iFund - mobihealthnews

Kleiner Perkins Caufield & Byers made an undisclosed seed investment in mobile fitness app developer WorkSmart Labs, according to a report over at AllThingsD. The investment was made through the firm’s iFund, which was established in 2008 with $100 million to make investments in iPhone app developers. In 2010 the fund doubled in size to prep for the then-imminent launch of the iPad. AllThingsD reports that the iFund was impressed by the ex-Googlers on WorkSmart’s team.

As AllThingsD points out, to date, WorkSmart Labs has only created Android fitness apps, however, the company reportedly submitted an iPhone fitness app to Apple this week. As of this morning, it’s still awaiting approval.

WorkSmart Lab’s apps are among a precious few health and fitness apps that have millions of users — the company’s apps have clocked 6 million downloads to date, up from 4 million in January. Other apps in the millions of users group include Nike+, LoseIt!, RunKeeper, and Endomondo.

At an event in New York City earlier this week, WorkSmart Labs CTO and co-founder Artem Petakov said that more than 150,000 of its apps’ users post data directly to Facebook from their apps, and each posts typically has two or more comments of encouragement.

Here’s how WorkSmart describes their apps: “Our mobile applications let you follow a personalized weight loss plan, schedule workouts, record them with your smartphone, track your eating habits, and more.” The developer’s app titles include: Noom Weight Loss, CardioTrainer, Calorific, CardioTrainer Pro, Race Against Yourself, and Cardio Entertainment.

For more on the round of funding, read this report over at AllThingsD

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Apple Has Worst First Half Since '08 as Investors Await IPhone - Bloomberg

People enter the Apple Inc. store in Shanghai. Photographer: Qilai Shen/Bloomberg

June 23 (Bloomberg) -- Lawrence Haverty, portfolio manager at Gamco Investors Inc., Burt Flickinger, managing director at Strategic Resource Group, and Frank Rose, author of "West of Eden: The End of Innocence at Apple Computer," talk about the outlook for Apple Inc. Rose, Haverty and Flickinger also discuss Apple Chief Executive Officer Steve Jobs. They speak with Pimm Fox on Bloomberg Television's "Taking Stock." (Source: Bloomberg)

Apple Inc. (AAPL) shares dropped 3.5 percent this month, capping their worst first-half performance in three years, as investors await new products and fret that rivalry from Google Inc. (GOOG) will slow growth.

The shares, down 7.6 percent from a record $363.13 on Feb. 16, haven’t performed this poorly in the first six months of a year since 2008, when the worst recession since the Great Depression swamped the stock market.

Investors, already grappling with Chief Executive Officer Steve Jobs’s medical leave, say they are wary of the stock amid evidence that Google is gaining ground in smartphones. It’s also been more than a year since Apple entered the tablet market with the iPad, and the next iteration of the iPhone isn’t due until September. That’s left shareholders hankering for new products to propel the stock, even though profit has risen more than 75 percent in the past two reported quarters.

“They are so successful in their execution that they need the next huge thing to make the stock actually rally,” said Michael Yoshikami, chief investment strategist at YCMNet Advisors, which manages $1 billion in Walnut Creek, California. “You’ve got to know what the next goldmine is going to be.”

Apple, based in Cupertino, California, rose $1.63 to $335.67 in Nasdaq Stock Market trading today. The shares have declined 3.7 percent since Jan. 14, the last trading day before Jobs, who’s battling a rare form of cancer, said he was taking his third medical leave since 2004.

“There is only one Steve Jobs; there’s nobody that can replace him,” said Walter Price, managing director of RCM Capital Management, which owned 2.96 million Apple shares as of March 31, after selling more than 820,000 shares.

Apple, the second-largest company in the S&P 500 behind Exxon Mobil Corp., has been one of the surest bets for investors over the past several years. It nearly quadrupled through the end of last year from Jan. 8, 2007, the day before Jobs introduced the iPhone. It’s up from a split-adjusted $5.48 on Sept. 16, 1997, the day Jobs returned to Apple after his ouster in 1985.

Large investors that have reduced their stakes in Apple this year include Goldman Sachs Group Inc. (GS), Janus Capital Group Inc. (JNS) and Wellington Management Co.

Given the gains in Apple’s share price so far, it’s inevitable that the pace of increase will slacken, said Giri Cherukuri, the head trader for OakBrook Investments, which manages $2.5 billion, including Apple shares.

“It’s hard for a stock of that size to move a lot at this point,” Cherukuri said. “For it go up 50 percent or double would be hard to imagine.”

Steve Dowling, a spokesman for Apple, declined to comment.

Apple’s ascent will undoubtedly resume, according to analysts, who on average predict that the shares will climb to $457.08 in the coming months. At least 50 analysts have “buy” ratings on the stock, and none of those tracked by Bloomberg recommends selling.

The gap between Apple’s stock price and analysts’ predictions reached a record $141.92 on June 20, according to Bloomberg data.

So far this year, Apple has underperformed the broader market. The Dow Jones Industrial Average has risen 7.2 percent, while the S&P 500 is up 5 percent. The Nasdaq Composite Index has climbed 4.6 percent this year.

Apple, which introduced the iPad 2 in March, may get a boost from the next version of the iPhone, due for release by the end of September, as well as demand for electronics in the year-end shopping season. Recent stock declines have created an investment opportunity, said Michael Binger, a fund manager at Thrivent Asset Management.

“We’ve been buying,” said Binger, whose firm has about $73 billion in assets under management, pointing to the iPad’s dominant position in the market. “All the competing products coming out don’t hold a candle to it.”

Even as investors fret about handsets running the Android operating system, some analysts predict it will be Google that may be in trouble.

Android will see market-share declines in the U.S. as customers move to a new model iPhone, especially subscribers of Verizon Wireless, which added Apple’s handset earlier this year, according to Needham & Co. analyst Charlie Wolf. In March, the iPhone accounted for 29.5 percent of the U.S. market, up from 17.2 percent in December, he said in a report this month. Android accounted for 49.5 percent, down from 52.4 percent in December.

Still, Android is expected to maintain its leadership position globally. It’s projected to account for 38.9 percent of the worldwide market this year, compared with 18.2 percent for Apple, according a report from research firm IDC.

The company’s financial results also will provide a boost, said Ryan Jacob, chairman of Jacob Asset Management. Apple’s profit is projected to jump 66 percent to $5.4 billion in the third quarter, which ended June 25, according to the average estimate of analysts surveyed by Bloomberg. Sales are predicted to grow 57 percent to $24.7 billion.

Given that rate of growth, Apple’s stock price is “perplexing,” Jacob said. “There are a lot of minor concerns with Apple, but to me they are all extremely minor.”

Apple also has outperformed other big technology companies, whose stocks have sputtered even amid profit and sales growth. Google, whose profit rose 30 percent last year, has slipped 15 percent this year, and Microsoft Corp. (MSFT), whose profit jumped 29 percent last year, is down 6.8 percent.

“I can’t remember valuations ever being as low as they are now for major large-cap technology,” Jacob said.

That’s not enough for some investors, who say the best days for Apple investors may have passed.

“It was easy until recently,” RCM Capital’s Price said of investing in Apple. “Now I think it’s hard to know if the stock is going to outperform the market.”

To contact the reporters on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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First Microsoft, now Google: Does the government have it in for consumers? - CNET

Editors' note: This is a guest column. See the authors' bios below.

Ten years ago this week, an appeals court upheld Microsoft's conviction for monopolizing the PC operating system market. The decision became a key legal precedent for U.S. antitrust enforcement. It also cemented the government's confidence in its ability to pick winners and losers in fast-moving technology markets--a confidence not borne out by subsequent events.

Now this sad history seems to be repeating itself: By uncanny coincidence, news broke just last Friday that the FTC had begun an antitrust investigation into Google's business practices. Unfortunately, there's no reason to expect the outcome to be any better for consumers this time around.

There is, in fact, no evidence that the case against Microsoft or its settlement contributed to the spectacular innovation in the IT sector over the last decade. Indeed, they may even have solidified Microsoft's role as the perennial also-ran in this latest wave of technological progress, as the company struggled to keep innovating under the threat of constant antitrust scrutiny in the U.S. and abroad.

The true lesson of the Microsoft case is this: antitrust intervention in information technology has a poor track record of serving consumers. Even Harvard law professor Lawrence Lessig, who was a court-appointed Special Master in that case and has since championed government tinkering with the Internet, finally admitted in 2007 that he "blew it on Microsoft" by underestimating the potential for innovation and market forces to dethrone Microsoft, particularly through the rise of open-source software (which now in part powers Apple's popular iOS).

But even that misses the importance of the broader, unimaginable technological evolutions that rendered the Microsoft case moot before it began. First, the desktop operating system is fast losing its central importance as more and more desktop applications are run in "the cloud" (Webmail, Salesforce.com, Tweetdeck, etc.). This evolution has been driven largely by open Web standards like HTML--which predate the remedy in the Microsoft case.

Second, Microsoft's desktop operating system is significantly threatened by the mobile revolution, and Microsoft's own forays into this market have been singularly unsuccessful. Tellingly, in 2007, when Apple transformed the mobile market with the iPhone, Microsoft released Windows Vista, the "Edsel" of operating systems. Apple's market cap is now larger than Microsoft's--a result unthinkable just a decade ago.

Finally, Microsoft has struggled to compete with Google, a company that supports with advertising revenues a growing variety of free (cloud-based) offerings beyond Internet search and in areas (operating systems, e-mail, Web browsing, word processing...) central to Microsoft's business.

In all three cases, Microsoft moved too slowly to keep up. And in all three cases the government and the courts (and likely even Microsoft itself) failed to anticipate these evolving threats to Microsoft's business.

The Microsoft case demonstrates how hard it is for antitrust regulators to determine which technologies and business models will ultimately best serve consumers, largely because they simply cannot predict how digital markets will evolve. The Justice Department of 1998 (when the Microsoft case began) couldn't have predicted the rise of Google, Facebook, Twitter, Chrome, Android, the iPhone, or cloud computing. Indeed, who in 1998, or even 2001, could have imagined that Microsoft would face an existential threat to its Windows, server, and Office-focused business model from a company that provides free, ad-supported services built on a core Internet search business--and that was incorporated just a month before Microsoft's antitrust case began? So how can today's FTC possibly predict how search will change, or how Google's success might be disrupted by "social" search (e.g., via Facebook), "semantic" search (understanding language), or any other combination of possibilities?

Even if Google today were the monopolist Microsoft supposedly was a decade ago, it doesn't follow that another drawn-out antitrust battle and cumbersome consent decree will actually benefit consumers. If anything, the futility of the Microsoft case demonstrates the wisdom of letting rapid technological change play out in digital markets.

Moreover, the Justice Department in the Microsoft case at least seemed genuinely focused on antitrust's bedrock consumer welfare standard. But today, the FTC seems to be motivated largely by a desire to lower the bar for future antitrust interventions, with Google's rivals cheering the agency on. Recent statements by FTC Chairman Jon Leibowitz (a Democrat) and Commissioner Thomas Rosch (a Republican) suggest their agency intends to prosecute Google under "Section 5" of the FTC Act rather than the agency's more traditional Sherman Act "Section 2" authority. Commissioner Rosch has claimed that a Section 5 unfair competition claim could address conduct that has the effect of "reducing consumer choice." But a reduction of choice of competitors put out of business by pro-competitive behavior is not a harm to consumer welfare, and such a case would (and should) fail under Section 2. The fact that Google's rivals--including Microsoft itself--are complaining about the company suggests, ironically, that Google's practices are in fact pro-competitive and thus pro-consumer.

It took Professor Lessig years to admit that he "blew it" on Microsoft. Here's hoping Chairman Leibowitz and the FTC are quicker to recognize the dangers of antitrust intervention in fast-moving markets. Another legal precedent like the Microsoft decision will hamstring not only Google but also, eventually, other innovative companies that might someday dethrone Google. How will that benefit consumers?

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Big News for Small Businesses: shopkick and Citi Onboard First 1000 Local ... - PR Newswire (press release)

PALO ALTO, Calif.,  /PRNewswire/ -- shopkick, the largest location-based shopping app that rewards shoppers simply for walking into stores, today welcomes small local stores and coffee shops into its revolutionary retail program, which already includes Target, Best Buy, Macy's and many other leading national retailers. Sponsored by Citi, shopkick will install its small shopkick Signal box for FREE at the first 1,000 selected stores to enable its beneficial walk-in rewards program.

Interested stores in launch cities – Austin and Dallas/Fort Worth, TX; Chicago, Il; Detroit, Mich; Los Angeles and San Francisco Bay Area, Calif; New Orleans, LA; New York, NY; Seattle, Wash; and Washington D.C. – should apply at www.shopkick.com/local in the next 30 days. shopkick is excited to have new retail stores, coffee shops, bakeries and yogurt shops join its growing coalition of partners.

shopkick, the first coalition rewards program in America, now works for both large and small retailers alike. Smaller local businesses with repeat customers, like coffee shops or cafes, can now reach and reward shoppers just for walking into their stores, with no out-of-pocket expense. Paper loyalty punch cards can be a thing of the past!

"We will do for small and medium-sized local stores what we have done for large, national chains: drive foot traffic. It's the single, hardest problem to solve – and the most valuable driver of success – for both retail and service businesses," said Cyriac Roeding, co-founder and CEO of shopkick. "With shopkick, stores also have the potential to increase basket size and margins, improve shopper engagement, and build customer frequency.  shopkick's new program will help small and medium businesses in a big way."

Citi, through its Citi Ventures unit, was an early investor in shopkick.

"Our work with shopkick demonstrates one of the ways we are working to drive growth for our clients and for our company," said Christopher Kay, Head of Ventures, Citi Ventures. "We invest in cutting-edge companies and work with them to deliver new experiences for clients designed around their increasingly digital and mobile lives. shopkick is the leading mobile shopping app and drives measurable foot traffic to its retail partners. We're happy to help make that shopper engagement and customer retention available to smaller businesses."

A hundred small and medium-sized businesses in three cities have already been involved in a pilot program for the past couple of months.  "For years, we've relied on expensive, untargeted ads to try to attract new customers, and paper punch cards to reward our loyal buyers," said Chris Whirlow, owner and proprietor of Yogurt My Way. "Now, we not only have a great way to let new customers know about us, but we can thank them for visiting  -- and tie our loyalty and rewards points to loyalty programs like Best Buy, Target, Macy's and Facebook Credits! It's great!"

In order to provide high-value rewards to consumers for actual walk-ins, the shopkick app, combined with the shopkick Signal – an inaudible sound emitted from a patent-pending device located in each participating retailer – verifies a user is in-store, and then awards shopkick's rewards currency "kicks". This ensures that marketing dollars put into the shopkick program are being spent to reward customers who are actually present in the store, something not possible with traditional location-based applications which rely on GPS technology that has an error radius of 50-1,000 yards on mobile phones.

Kicks are awarded for checking in to more than 3 million businesses nationwide, with highest-value walk-in rewards available at the more than 2,500 retail and 160 mall locations that makeup shopkick's Retail Partner Network. Walk-in rewards are currently available in all 50 states at select Target, Best Buy, Macy's, American Eagle Outfitters, Sports Authority, Crate and Barrel, Wet Seal, west elm and Simon Property Group mall locations. Kicks earned can be redeemed for in-store gift cards, song downloads, movie tickets, hotel vouchers, Facebook Credits to play games online, donations to 30 different causes and charities and more.

Launched in August 2010, shopkick quickly became the largest location-based shopping app in America and reached 1.8 million users within a record 10 months since its launch. The shopkick App is available for free on the iPhone from the App Store at www.itunes.com/appstore/ and on Android Market at http://shopkick.com/android.html

About shopkick, Inc.

shopkick, Inc. is a Palo Alto-based startup funded by Kleiner Perkins' iFund, Greylock Partners and Reid Hoffman, founder of LinkedIn, and investor in Facebook and Zynga. In August 2010, shopkick launched the first mobile application that hands consumers high-value rewards, offers and exclusive deals at shopkick's national retail partners simply for walking into stores and malls. Even more rewards can be earned for scanning partner brand products at over 250,000 stores nationwide. In combination with a groundbreaking new location technology called "shopkick Signal", the app can verify location within feet, and because the detection occurs on the phone, privacy of presence information is completely in the users' control. shopkick's growing partner alliance includes Best Buy, Macy's, Target, American Eagle, Crate & Barrel, The Sports Authority, Wet Seal, West Elm, Simon Property Group, Kraft Foods, Procter & Gamble, Unilever, Intel, HP and The CW. shopkick is the only 100% performance-based marketing platform in the physical retail world, with measurable foot traffic and transactions at stores. The app grew to 1 million users in its first six months. The free shopkick app is available for the iPhone and Android.

About Citi

Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. Additional information may be found at www.citigroup.com.

About Citi Ventures

Headquartered in Palo Alto and Shanghai, Citi Ventures is a unit of global financial services company Citi. The Citi Ventures team partners with Citi businesses internally and with leading companies externally to identify, develop, and commercialize the highest new growth opportunities around the world that directly support Citi's emerging strategic directions.

SOURCE shopkick, Inc.

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