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Instagram Wants to Ease Its Users into Shopping

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For a week in May, some of Instagram’s designers, engineers and product managers met not at the company’s Menlo Park, California, headquarters but at a rented house, stocked with grocery store snacks. There, away from computers and armed with pencil and paper, they explored a question important for the photo-sharing app’s future: how do we get our users to shop?

In particular, they wanted to figure out how to introduce shopping tools without making them so obvious that they would transform the app into a splashy catalog. Together they came up with 150 ideas. After an extensive process of elimination, the team settled on the design being unveiled this week: letting brands tag products in their photos, the way users tag their friends. Tap on the tagging descriptions to get more information, tap again to buy on the retailer’s site.

It’s the first test from Facebook Inc.’s Instagram to kick off a broader strategy for helping people pick out and buy things, according to James Quarles, Instagram’s vice president of monetization. The team will gather data from users’ behavior to figure out what to do next. Maybe they’ll add a way to comparison shop, a way to search for products elsewhere on the app or even a Pinterest-like feature to save posts that inspire, he said.

“We are so well-positioned in this space,” Quarles said. “Instagram is super visual, we have a well-defined graph of your interests based on what you’re following, and the serendipity of discovery happens every day through the ad products and who you follow.”

People have long been shopping on Instagram without a formal way to buy things. A crop of influencers on the photo app push fashions into popularity. Company researchers have noticed that users take screenshots of products they love, or direct-message them to themselves. But, like the design team’s caution suggests, making shopping an actual app feature is a risky proposition.

The main problem: shopping hasn’t worked well in social media. Facebook’s history is peppered with discontinued e-commerce products, like birthday gifts for friends and “Facebook credits,” which was a virtual currency for social games. The company recently introduced a Marketplace product that allows people to buy and sell to each other, but its launch was quickly marred when users started posting ads for drugs, sex and exotic animals.

Twitter tested a “buy button” for more than a year, but the project faded and the head of e-commerce departed. Pinterest made a bigger investment in shopping, allowing direct buying on its site from thousands of retailers, but it’s still unclear how popular the tool is with consumers.

Quarles said Instagram aims to learn from all these experiences—especially from its parent company, Facebook, which has shared its notes.

Instagram already lets retailers promote products in ads, but the shopping update would apply to regular posts, making it a more natural experience for users. The app’s e-commerce ambitions are large—including international expansion and a video version of the product—but they’re starting small.

It’s testing its new feature with just 20 brands, including Kate Spade and Warby Parker, and not taking any cut of the proceeds.

For J. Crew, which is one of the test brands, Instagram’s product fills a gap in mobile shopping. For one, it’s image-based, which makes it much more amenable to inspiring people to buy products than Facebook, according to Jenna Lyons, J. Crew’s president and creative director. It has the opportunity to take a customer from the point they’re interested in a product to actually making a purchase. It’s happening in the real world already, she said.

“It’s been a little frustrating to us in the past to not be able to have people purchase on Instagram,” Lyons said. “Not only has it become a place for people to get influenced by their friends, but they’re walking into our stores with their phones and saying, ‘do you have this?'”

She is hoping the test will show that Instagram’s method is subtle enough to not turn people away, but powerful enough to drive people to J. Crew’s site.

“I really hope it works,” Lyons said.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Startups

Madica Empowers African Startups with $200,000 Investments Each

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Madica, a structured investment program dedicated to nurturing pre-seed stage startups in Africa, has announced its inaugural investments in three innovative ventures.

Each of these startups is set to receive up to $200,000 in funding from Madica and will participate in the program’s comprehensive 18-month company-building support initiative.

The investment program provides a personalized curriculum, hands-on mentorship, founder immersion trips, executive coaching, and access to Madica’s extensive global network of investors for follow-on funding.

The primary objective of this support is to drive growth and ensure the long-term success of the startups.

Emmanuel Adegboye, Head of Madica, expressed his excitement regarding the investments, highlighting the abundant talent and innovation present in the African tech ecosystem.

He said Madica is committed to supporting African founders who often face challenges in accessing necessary support due to perceptions of risk among global investors.

Madica employs an open application process, collaborating closely with local ecosystem players such as incubators, accelerators, and angel networks to identify and support promising entrepreneurs.

The selection process remains rigorous, with investments made on a rolling basis throughout the year.

With plans to invest in up to 10 additional startups this year, Madica aims to expand the reach of venture capital and founder mentorship across Africa, addressing the existing imbalances in funding availability.

The announcement of these investments marks a significant milestone for the selected startups, providing them with vital financial support as well as access to invaluable resources and networks to propel their growth and success in the competitive landscape of the African startup ecosystem.

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Social Media

Meta’s Revenue Woes Shake Tech Industry Confidence

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The tech industry faced a wave of uncertainty as Meta Platforms Inc., formerly known as Facebook, delivered a disappointing earnings report that sent shockwaves through the market and dented investor confidence.

Meta’s forecast of weaker-than-expected sales for the current quarter, coupled with plans for higher capital expenditures, rattled investors who were eagerly anticipating robust results.

Shares of Meta plummeted by as much as 19% in after-hours trading to trigger a cascade effect across the tech sector.

The tech-heavy Nasdaq 100 Index experienced a decline of up to 1%, reflecting broader concerns about the health of the industry.

Analysts and investors alike expressed dismay at Meta’s inability to meet revenue expectations, citing uncertainties surrounding the company’s adoption and monetization of artificial intelligence (AI) technologies.

Jack Ablin, Chief Investment Officer at Cresset Wealth Advisors, highlighted the disappointment on the revenue front, overshadowing any optimism about AI adoption.

Questions lingered regarding the efficacy of AI investments and their potential benefits to users, leading to increased skepticism among stakeholders.

The repercussions of Meta’s earnings miss extended beyond its own stock, impacting other tech giants slated to report earnings in the coming days.

Alphabet Inc., Amazon.com Inc., and social media companies like Snap Inc. and Pinterest Inc. all witnessed notable declines, signaling a broader sentiment shift within the industry.

The fallout from Meta’s revenue woes reverberated across the tech landscape, affecting chipmakers, server manufacturers, and software firms. Nvidia Corp., Micron Technology Inc., and International Business Machines Corp. were among the companies affected, as investor concerns over AI investment and revenue growth cast a shadow over the sector’s outlook.

As the tech industry grapples with Meta’s disappointing results, stakeholders are left to ponder the implications for future investments and strategic decisions.

The episode serves as a stark reminder of the inherent volatility and uncertainty within the tech sector, underscoring the importance of diligent risk management and strategic foresight in navigating turbulent markets.

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TikTok Vows Legal Battle Amid Threat of US Ban

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As the specter of a US ban looms large over TikTok, the popular social media platform has declared its intention to wage a legal battle against potential legislation that could force its Chinese-owned parent company, ByteDance Ltd., to divest its ownership stake in the app.

In what amounts to a fight for its very existence in one of its most crucial markets, TikTok is gearing up for a high-stakes showdown in the courts.

The alarm bells were sounded within TikTok’s ranks as Michael Beckerman, the company’s head of public policy for the Americas, issued a rallying cry to its US staff.

In a memo obtained by Bloomberg News, Beckerman characterized the proposed legislation as an “unprecedented deal” brokered between Republican Speaker and President Biden, signaling TikTok’s readiness to challenge it legally once signed into law.

“This is an unprecedented deal worked out between the Republican Speaker and President Biden,” Beckerman stated in the memo. “At the stage that the bill is signed, we will move to the courts for a legal challenge.”

The urgency of TikTok’s response stems from recent developments in the US Congress, where lawmakers have fast-tracked legislation mandating ByteDance’s divestment from TikTok.

The bill, intricately linked to a vital aid package for Ukraine and Israel, has garnered significant bipartisan support and is expected to swiftly pass through the Senate before landing on President Biden’s desk.

Beckerman minced no words in his critique of the proposed legislation, labeling it a “clear violation” of TikTok users’ First Amendment rights and warning of “devastating consequences” for the millions of small businesses that rely on the platform for their livelihoods.

TikTok’s defiant stance reflects the gravity of the situation facing the tech giant, which has spent years grappling with concerns from US officials regarding potential national security risks associated with its Chinese ownership.

Despite extensive lobbying efforts led by TikTok CEO Shou Chew to allay these fears, the company now finds itself at a critical juncture, where legal action appears to be its last line of defense.

ByteDance, TikTok’s Beijing-based parent company, has also signaled its intent to challenge any US ban in court, signaling a united front in the face of mounting pressure.

However, navigating the legal landscape will not be without its challenges, as ByteDance must contend with both US legislative measures and potential obstacles posed by the Chinese government, which has reiterated its opposition to a forced sale of TikTok.

As TikTok prepares to embark on what promises to be a protracted legal battle, the outcome remains uncertain.

For the millions of users and businesses that call TikTok home, the stakes have never been higher, as the platform fights to preserve its presence in the fiercely competitive landscape of social media.

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