The Morning Download: Amazon Shares Machine-Learning Expertise, Expands AI Chops

Good morning. Amazon.com Inc. is building out research teams in New York and Berlin, and rolling out a Big Data platform for developers in Europe, as the world’s largest retailer prepares to share some of the machine-learning expertise that has guided its own efforts predicting prices and forecasting search recommendations. The platform includes a set of visualization tools to help nontechnical users create predictions based on businesses’ historical data.

Amazon’s New York expansion will focus on demand forecasting, Ralf Herbrich, European Union director of machine learning at Amazon, tells the WSJ’s Amir Mizroch. First efforts there will be directed toward fashion, a highly unpredictable market, at least in terms of basing actions off of historical data. One new hire: Dean Foster, an expert on machine learning and natural-language processing from the Wharton School of the University of Pennsylvania.

Hiring moves by Amazon, which also maintains machine-learning research groups in Bangalore, Seattle and Palo Alto, Calif., will certainly impact the talent pool. Tech giants Microsoft Corp., Google Inc. and Facebook Inc. are in the market for experts, of course, but so is virtually every company working to implement machine learning and artificial intelligence in an increasingly data-intensive businesses environment. Also in high demand: the talent required to understand and act upon predictions derived from large sets of data. As Hui Wang, a senior director of global risk sciences at PayPal Holdings Inc. who uses machine learning to predict fraud, tells CIO Journal, “We have little wiggle room for error. Any one wrong decision will cost the company a lot of money.”

PayPal fights fraud with machine learning and human detectives. A prime target for hackers, the online payments company uses open-source tools, algorithms and human reviewers to spot potential fraud during transactions. The combination “gives us the best analytical advantage,” Hui Wang, senior director of global risk sciences, tells CIO Journal.

Speaking group turns ‘geek speech’ to something biz can understand. As they seek to improve communications between IT and everyone else, IT employees at the University of Arizona are turning to “ITCats,” a group where they can can workshop presentations and sharpen their public speaking skills. A branch of the Toastmasters public speaking group, ITCats recently helped one employee prepare to deploy a two-factor authentication program. “Rolling out something like two-factor authentication to end users, it’s gobbledygook,” Teresa Banks, an information security and compliance program manager, tells CIO Journal. Getting feedback from the group “gets us out of geek speech into English.”

ATF CIO Rick Holgate to step down. Rick Holgate, senior IT official at the Bureau of Alcohol, Tobacco, Firearms and Explosives since August 2009, has accepted an offer to cover the federal IT sector for technology research firm Gartner Inc. Among other initiatives at the ATF, Mr. Holgate in early 2012 pushed to install Apple Inc.’s mobile platform as an agency-wide standard. He also led efforts to move more of the agency’s IT needs into the cloud. The agency has yet to name a successor, an agency spokesperson tells CIO Journal.

SECURITY AND PRIVACY

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The Ashley Madison lawsuits begin. Lawsuits against adultery website AshleyMadison.com have begun, including one led by “John Doe.” Complainants seek to maintain its anonymity behind the Doe pseudonym after hackers dumped nearly 10 gigabytes of data on the Internet, Bloomberg reports. The users claim they paid $19 to have AshleyMadison scrub their profiles from the site, only to find out it didn’t do so.

California agencies vulnerable to security breaches. Auditors in California say many state agencies are not complying with the state’s IT standards, the AP reports, a lapse that leaves them vulnerable to a major security breach. Many agencies also haven’t planned sufficiently for interruptions or disasters, auditors found.

Manager at video game maker accused of trade secret theft. A manager at a maker of the Game of War video game, Machine Zone Inc., was arrested last week, as he tried to board a plane for Beijing after allegedly stealing trade secrets, the WSJ’s Danny Yadron reports. According to a federal criminal complaint, Jing Zeng, 42 years old, of San Ramon, Calif., allegedly downloaded data on how users interact with Game of War: Fire Age, one of the top-grossing games in Apple Inc.’s App Store.

MANAGEMENT

James Yang

Workers get new tools for airing their gripes. A host of firms have  been experimenting with online tools that allow co-workers to send one another criticism or praise, sometimes anonymously, the WSJ reports. Recent revelations about Amazon.com Inc.’s competitive work culture described a company feedback system in which employees sent gripes to co-workers’ bosses about their performance, sometimes without the co-workers’ knowledge. But some firms are hesitant to give employees unfettered access to feedback tools, fearing that a free-for-all of commentary will encourage petty complaints or lead to a deluge of observations with no discernible value.

Snapchat hires finance chief. Snapchat Inc. named Drew Vollero, a former executive at toy maker Mattel Inc., as vice president of finance and acting chief financial officer, the WSJ’s Douglas Macmillan reports. Mr. Vollero will be tasked with building the company’s finance department and helping to prepare for an initial public offering. It is unclear if Mr. Vollero will take on the CFO job permanently or be replaced. The company has “every expectation” he will eventually become permanent CFO, said a spokeswoman.

MORE TECHNOLOGY NEWS

Critics of LTE-U technology say it could hurt the speed of Wi-Fi connections.
Nano Calvo/VW Pics/Zuma Press

Cell carriers battle for Wi-Fi airwaves. A battle is brewing among tech giants over the future of Wi-Fi, the unregulated wireless connections at the core of the mobile Internet, the WSJ reports. Verizon Communications Inc. and T-Mobile US Inc. are preparing to broadcast cellular signals over some of the same free airwaves currently used by Wi-Fi networks. That worries startups like Republic Wireless as well as companies like Google Inc. and Cablevision Systems Corp. that have built services that rely on Wi-Fi networks. They argue Verizon’s and T-Mobile’s signals could take up space Wi-Fi services normally use and crowd them out.

Salesforce.com unveils software for wealth-management. Salesforce.com Inc. is moving into vertical markets as revenue growth of its flagship sales software has lagged that of its newer services, the WSJ’s Shira Ovide reports. On Tuesday the company announced a variant of its sales-management tools tailored for a specific industry: wealth management. Salesforce Financial Services Cloud knits together programs that advisers currently use to, say, rebalance clients’ investment portfolios or keep tabs on their financial goals.

Smart odometer? Eh, no thanks. Drivers are steering clear of some technology in new cars, Reuters reports, raising questions about whether automakers are moving too quickly to incorporate the latest connected thing. The 2015 Drive Report from JD Power found that 20% of new car owners had still not used approximately half of the technology features available in their cars after three months of purchase. The most underused feature: in-vehicle concierge systems that can recommend nearby restaurants or gas stations.

Robots, jobs, etc. Add to the troves of data on automation and jobs a new report from Forrester Inc. that sees a rise in new jobs (for humans) created around maintaining, designing and programming machines. Analyst J.P. Gownder estimates that automation will erase 22.7 million US jobs by 2025 — 16% of today’s total. However, new jobs created will offset that figure, making for a net loss of 7%, or 9.1 million jobs, the WSJ reports.

Autonomous cars, hype, etc. A new Gartner report places autonomous cars at peak hype, the result of big expectations and big investments. If the hype cycle holds, the plummet back to reality is just around the corner as obstacles become more evident, the WSJ’s Mike Ramsey reports. “There will be a potentially rough awakening for some companies,” said Thilo Koslowski, the lead automotive analyst at Gartner. Fasten your seatbelts?

Workday’s job isn’t finished. With no earnings in sight, Workday Inc.’s valuation hinges on larger software companies’ propensity to buy market share in cloud computing, Ahead of the Tape’s Spencer Jakab reports. The company reports fiscal second-quarter results Wednesday, and analysts polled by FactSet see Workday reporting a loss of 38 cents a share for the period through July, unchanged from a year earlier. Also unchanged is a string of predicted losses.

Big Data startup announces $20 million with Intel. Intel Capital led a $20 million funding round for BlueData, which lets customers spin up virtualized Big Data clusters. Intel often works with software makers to develop products that could help spur sales of its own technology and the idea for the deal includes BlueData engineers working to optimize their products for Intel architecture, particularly Intel Xeon chips, TechCrunch writes.

Slow dark pools cost investors, study says. Dark pools’ creaky infrastructure and slow computer systems are more of a threat to investors than the ultrafast traders that lately have fueled anxieties about the private trading venues, according to new research, the WSJ’s Bradley Hope reports. The technological shortcomings can cost mutual funds and hedge funds millions of dollars over time, New York research firm Tabb Group plans to say in a release Wednesday.

Hey, get off your cellphone and let’s chat. If you’re staring into your screen while the person next to you is trying to chat, you might be the one who’s a bit rude. is A recent survey from Pew Research Center found 82% of American adults said using cellphones hurt conversation in social gathering, Reuters reports. Nevertheless, nearly 90% said they used the phones during their most recent get-together for talking, texting and taking photos.

Get ready to pay taxes for your stay in Paris. Airbnb Inc.  said Tuesday that it will start collecting hotel taxes in Paris as of October 1, making the city of light the ninth city where Airbnb is doing so – and the second in Europe after Amsterdam, the WSJ’s Sam Schechner reports. Paris, by the way, is the room sharing startup’s largest market globally.

Uber unveils bus-like service in SF. Uber Technologies Inc. is testing a new feature where the Uber car takes a set route with set stops and picks up passengers on the way. The “experimental feature” is part of uberPOOL, an existing Uber service where passengers share the ride for a lower cost, MarketWatch explains.

Next up from Amazon? Alcohol. The Web retailer said Tuesday it will begin delivering wine, beer and spirits to U.S. customers as part of its Prime Now delivery service, Reuters writes. Prime Now, which delivers products in one to two hours, facilitates the integration of the retailer’s grocery delivery service as it pushes to get products to consumers on-demand.

Burning Man: The Musical. “When I get to Black Rock City I’ll party with Elon and Diddy!

EVERYTHING ELSE YOU NEED TO KNOW

China remains a key commodities player. The fear that China’s appetite for commodities is falling is rattling markets, but the country’s sheer scale means it will continue to shape the commodities trade. Commodities traders are feeling the unusual pain of a market rout, as firms find they can no longer thrive on market volatility after building up a physical presence. Meanwhile, the world’s biggest producers of iron ore have a problem, and it lies in the steel that has already gone into China’s cars, bridges and skyscrapers. BHP Billiton PLC, the world’s biggest mining company, unveiled its weakest annual earnings since 2003 and cut its long-term forecast for Chinese steel demand.

Market mess throws deals into doubt. With China’s turmoil causing disarray in global markets, deal makers in Asia are bracing for a rout; while no deals have been scrapped so far, a number could face hurdles. Falling stock markets hit mergers several ways: reducing what investors will pay for targets in the same sector; hurting buyers’ stomach for risk; reducing the funds lenders make available for takeovers; and encouraging bidders to renegotiate or back out of deals, even at the cost of a “breakup” fee.

What should Macy’s do with its flagship store? Macy’s Inc. is the latest major retailer to consider spinning off its real-estate assets into a separate company. But first it will have to decide what to do with its prized asset, the landmark building at New York’s Herald Square.

The Morning Download comes from the editors of CIO Journal and cues up the most important news in business technology every weekday morning. Send us your tips, compliments and complaints. You can get The Morning Download emailed to you each weekday morning by clicking http://on.wsj.com/TheMorningDownloadSignup.




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