Innovation: Carpeting the ocean floor to harness wave power

links eats up as much as 5 percent of the time it takes developers to build an app, says Alex Matjanec, managing partner at AD:60, a New York-based ad agency that creates apps for clients.

More than 1,000 apps use the Facebook App Links feature, which the company and its partners rolled out last year, to embed deep links, says Eddie O’Neil, a product manager. Startup URX says its deep-links technology has been deployed by hundreds of apps; Yozio, which allows developers to create deep links that work on all platforms, says it services about 600.

Vincent Wehren, a product manager at Microsoft, announced in May that the company had embarked on a push to build “a massive index of apps” on its Bing search engine. At its annual developers conference in June, Apple said the new generation of iOS will be able to pull up content within apps—even if they’re not installed on the handset— provided developers have added the necessary code.

Still, the majority of app makers have resisted deep links, because they could reveal information they’d prefer to keep to themselves. Open Garden, maker of the FireChat messaging app, isn’t making its product searchable—at least, not yet— saying it doesn’t want companies like Google to have access to data on how many people use the app or what conversation topics are popular. “We prioritize features that are necessary over nice-to-have features that might please Google,” says Stanislav Shalunov, Open Garden’s chief technology officer.

Roger Kay, president of marketresearch firm Endpoint Technologies Associates, says the Internet used to be like a vast open range, and Google had access to all of it. “Then gradually the farmers showed up and started fencing things,” Kay says. “And these fences were put up by folks that were fencing in the best pastureland—that is to say, the highest-value search items.”

Facebook’s O’Neil predicts that, despite the pockets of resistance, deep linking will eventually become the norm for apps. “Developers will continue to adopt it,” he says. “It’s sort of inevitable.” —Olga Kharif, Brian Womack, and John Fahnenstiel

The bottom line Only a few thousand mobile apps—out of several million—have links that enable their content to be searched.

Innovation Wave Power

Form and function

CalWave, an underwater mechanism of springy fiberglass “ carpets,” generates electricity from ocean waves more efficiently and less obtrusively than wave-energy systems at the surface now in use in Hawaii and other places.

1.

Flow The CalWave carpets, 30 feet to 60 feet underwater, undulate as waves pass over them, driving pistons anchored below. Innovator Marcus Lehmann Age 28 Leads the year-old CalWave project at Lawrence Berkeley National Laboratory in California

Origin Building on a concept from one of his professors at Berkeley, Lehmann assembled his first prototype in 2012, while earning his master’s in mechanical engineering. He bought parts from Amazon.com and a local hardware store. Funding Lehmann and project partner Maha Haji have raised almost $530,000 in seed money from Berkeley, crowdfunding, and competition prizes.

2.

Supply The U.S. Department of Energy estimates that recovering 5 percent of the energy from ocean waves could power 5 million homes.

Ramping up In 2013, CalWave’s second prototype topped 50 percent efficiency in converting wave energy to power. Dual use CalWave is developing two versions of its system: one that powers a hydraulic motor to generate electricity and another in which the pistons drive seawater through the membranes of a desalination plant.

Next Steps

CalWave plans to switch on an 8-foot-by-30-foot prototype plant off the San Diego coast late this year. Lehmann says it will cost about $80,000 to build and generate 80 kilowatts of power, enough to run 180 homes. For commercial operations, multiple units will link together to form wider carpets. Lehmann and Haji are talking with IDE Technologies, which is building a $1 billion desalination plant in Carlsbad, Calif., about using CalWave as a power source. —Michael Belfiore

July 20 — July 26, 2015

Getting High on Their Own Supply

ILLUSTRATION BY 731 Corporate stock buybacks put a floor under earnings “Companies have to do something with their cash”

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Wall Street analysts are gloomy about corporate performance in the second quarter, predicting that profits fell 6.5 percent. If companies weren’t buying so much of their own stock, the drop could be much worse: 9 percent. “It makes you rethink a lot of things,” says Kevin Mahn, president of Hennion & Walsh

Asset Management. “We question how much earnings growth has taken place because of actual sales growth and consumer spending—and how much is attributable to buybacks.”

Corporations report profits as earnings per share (EPS). By reducing the number of shares outstanding, buybacks help increase a company’s EPS. The impact of buybacks was harder to see in the first three years of the bull market, when ballooning profit margins helped companies in the Standard & Poor’s 500-stock index almost double their earnings. Now that margin growth has flattened out, buybacks’ contribution is more significant. Companies in the S&P 500 bought more than $550 billion of their own stock last year, boosting EPS growth by 2.3 percentage points, according to data compiled by Bloomberg.

The last time buybacks contributed as much to profits was in 2007, when companies spent the most ever on their own stock and enhanced that year’s increase in EPS by 3.1 percentage points. “Today the argument is buybacks are distorting the market, but I’m less certain,” says Dan Greenhaus, chief global strategist at BTIG, which provides trading services to institutional investors. “To the extent companies have thought their shares are undervalued the past few years, buybacks have been a fair use.”

Buyback announcements so far in 2015 have already topped full-year totals for 2008, 2009, 2010, and 2012, and they’re on pace to reach an annual record of $993 billion, according to Birinyi Associates. AIG announced