September 24, 2015
It is hard to say anything positive about Yahoo since Marissa Mayer took over the helm.
Useful services (e.g. Pipes) have either been eliminated or are just languishing (e.g. Mail). Today Yahoo Mail is down again. Alibaba's stake hasn't turned out to be the savior it was once deemed.
At this point the stakeholders are surely kicking themselves for not taking Microsoft's buyout offer back in 2008.
The future isn't looking too bright for this once thriving vanguard of the Web. Perhaps it is time for new leadership.
July 26, 2015
The idea behind Jet, a new online marketplace site, is simple. Borrowing from Costco's concept, Jet charges its clients an annual fee and in return ships products to customers with no mark-ups and in many cases with substantial savings over other shops, including Amazon.
Being a Costco fan, I like Jet's model. Add to that a good dash of dislike for Amazon and I may actually try Jet at some point. Seems like Jet is having some success getting its name out.
Jet's founder, Marc Lore, was the man behind diapers.com, a once successful ecommerce company who got crushed under the weight of Amazon and finally what was left of it was assimilated by Amazon. Now Lore is back to take on Amazon again, only this time he's going after the entire retail side of the company. Amazon's CEO, Bezos, can't be too happy about this, but is he worried?
I doubt Bezos is losing much sleep and here's why. Amazon may be known for perfecting the online marketplace and for being uber-competitive but Amazon has become adept at thriving while swimming in failure. Which company can lose money for over 20 years and be handsomely rewarded for it? For the last quarter it reported a measly $90 million in profit and saw its market cap rocket up by $50 billion when stocks opened last Friday.
The point is that competing with Amazon is like competing with a bottom-less pit for the bottom. Amazon crushes its competition by spending nearly infinite amount of money knowing that the stake holders expect nothing but losses every year. When you are rewarded for losing money, it's not difficult to spend all the money in the world, and that's what Amazon does to stifle competition.
Of course Jet realizes this fact and it has dug in, preparing itself and its investors for years of losses as its competition with Amazon heats up. Will it find the same love and admiration from its backers and future shareholders? Doubtful, but I actually hope so. Not just because I dislike Amazon, but also because some day I'd like to start my own thriving business that is successful at losing money forever.
December 7, 2014
When I opened my inbox last friday, an email from Amazon greeted me with the title: "Announcing Price Reductions for AWS Data Transfer and Amazon CloudFront"
I wondered how Amazon was going to make up the difference in the face of stiff competition from other cloud vendors. Then I saw Amazon diapers in the news and all my concerns were laid to rest, genius.
Could this have been the starter line for the executive meeting at the Amazon's headquarters? "We have a revolutionary idea to counter the AWS shrinking margins and the Fire phone losses. Please bring your attention to the baby on the PowerPoint slide ..."
Revolutionary indeed 🙂
February 13, 2014
Take the usual quarterly loss, the upcoming Prime price-hike, and the UBS downgrade and you have the catalyst for a drop in amazon.com's shares in the past couple of days.
Today however the stock is up over 2% and chances are it'll be back where it started and then some. Amazon is just one of those stocks. Much like bitcoin, it has little intrinsic value but it's kept front and center so everyone's too afraid not to buy in, lest they miss the party.
What exactly does amazon do again? Sells discounted stuff online like a thousand other websites, takes its excess network capacity, repackages it as dozens of different services under the cloud umbrella and leases them to users (like thousands of other hosting companies), and oh yes, they are working on the drone express.
When you have a winning formula why mess with it? For two decades Amazon has been pushing the investing-for-future angle. Meanwhile there are no earnings, no dividends, and no share buybacks. Just a bunch of vapor and promises. The good thing about the future is that it's always in the future. We may wait until there's a red giant where the Sun used to be, but the future will still be in the offing.
The amazon emperor has no clothes on, but no worries, he'll get his clothes in the future.
June 18, 2013
AdSense, Google's affiliate advertising product for publishers is 10 years old and I just received a warning from them that one of my sites, padfly.com, does not conform to their policies and I have 3 "working" days to clean it up or else they would block their ads on that site forever. Should I cheer or jeer?
For some time AdSense has stated that web pages on sex, violence, gambling, racial matters and other such topics are off limits for their product. padfly.com is not inherently notorious, but because people can create public pages and save any text data to them, some of the pages will inevitably have objectionable content. Policing that site is just not practical.
I have been with Adsense almost since its inception and would certainly not want to raise the ire of Google. It pays enough to cover the cost of running this site. I can also understand why Google would not want to taint its product with pages and sites that are not family friendly. At least they gave a warning instead of abruptly killing my account.
So dear AdSense folks, happy 10th and to comply with your rules I pulled Adsense from padfly.com completely. Fair enough?
April 29, 2013
Last week Amazon reported an $0.18/share earnings on a lower than expected revenues for its past quarter. The shares seesawed after hours and finally ended down some $20 on Friday. The earnings were almost twice what the street had expected, but think about this, The street was expecting this company to earn a measly $40 million. This is a 17 year-old established company with a market capitalization of $130 billion, it should be expected to do much better.
The thing with Amazon is that investors seem to be so emotionally entangled with company that they have no logic when it comes to its share price. Since its inception, Amazon has played the "long-term" card and it continues today, as in the earnings don't matter because the company is investing in the future.
When this glorified future will materialize for Amazon is anyone's guess. Perhaps in another 17 years or more? Whatever the case, for those who may believe that the latest pullback may signal a return to sanity for this stock, don't believe it. Going by history, it won't be long before Amazon's shares will wipe out all losses and march on to set new 52-week records. It's just that kind of a company.
April 17, 2013
Apple shares hit a 52-week nearing $400/share today, even below some of the price points from when Steve Jobs was alive. The news surrounding Apple isn't very rosy. iPhone continues to lose market share to Google's Android, iTunes is losing market share to Amazon, and the PC/laptop markets are shrinking in general dragging Apple down along the way. Analysts aren't predicting a good quarterly report next week.
Now I admit to not being an Apple fan but the one force that was keeping the company firing on all cylinders was Steve Jobs and that is undeniable. When he was there the first time, the company was doing exceptionally well, when he was forced out Apple became a dud, then he returned and Apple came roaring back.
Now Jobs is gone once again and Apple continues on the momentum that he brought with him but that momentum is naturally wearing off. Jobs was a genius and a visionary and it is because of him that Apple has continued to do well much longer than I had anticipated. But eventually the vacuum of vision and innovation must show its effects.
I do wish the company well, but companies don't thrive on well wishes. Jobs was the secret sauce behind the resurgence of Apple and without him the inevitable must now happen. Apple will no doubt survive, but thriving doesn't seem to be the cards.
April 14, 2013
It was barely 10 days ago when the news broke of Amazon's Bezos investing $5 million is Blodget's web site, Business Insider. Most saw it as Bezos' genius investing in the up and coming web site. I just saw it as one pal taking care of another, as Blodget has been a vociferous support for Amazon almost from its inception.
Now Blodget has returned the favor by publishing an article lauding Amazon effusively as an example for other companies to follow.
Is this what has happened to journalism? It has become so contaminated by conflict of interest that people no longer even hide their incestuous relationships. Can anyone honestly read this so-called article and believe it's even close to being impartial?
Bezos is indeed a genius by the way he has pumped up Amazon's shares and by fooling a flock of sheep to believe his company is special and deserves its outrageous valuation. As for the rest of us, there's no need to read the Business Insider article. Surely it is filled with much praise and positivity for a company whose greatest asset is its gullible investors.
January 25, 2013
Much has been said about how Amazon's high stock price is unjustified. This morning my boss sent me a link that reminded me again how ridiculous Amazon's share price has gotten as of late. The article summed it up well by noting that if Apple were to have the same PE ratio as Amazon, its share price would be $145,000.
I suppose another way to even better demonstrate this insanity is to use the same equation on Berkshire Hathaway class A shares, which would send them to an astronomical $31 million/share.
My boss tried to justify Amazon's stock price by mentioning their high profit margins. So I decided to take a look at what Amazon's gross margins are and how they compare with some other companies. Here's a short list:
- Amazon: 25%
- Apple: 39%
- Google: 57%
- eBay: 69%
- Microsoft: 74%
- Intel: 63%
- Priceline: 82%
- Wal-Mart: 25%
- Ford: 18%
- Oracle: 80%
- GE: 26%
As you can see Amazon's gross margin is way below its peers, but in line with that of Wal-Mart's. Proof that Amazon is nothing more than a glorified, high-tech super store.
As to why its stock continues to rise despite any rational justification, another person said it well. Traders play Amazon as a momentum stock and it has become a self-fulfilling prophecy. Logic indicates that it should come down crashing hard, but this stock escaped logic long ago and it'll be foolhardy to bet against it now.
January 17, 2013
Love this story. Software developers are certainly infamous for being lazy. Most of us are, and that drives us to write code to automate things or write utilities to give to others to perform certain tasks. It's all about finding clever ways to make things easier for us and our employers.
But one guy took it one step further and secretly outsourced his coding responsibilities to a Chinese firm paying them a fraction of his salary and spending his own days having fun. His employer was oblivious to this for years until they ran an audit and discovered the scheme.
The blog post below is really about this coder's exploits and a cautionary tale for others to keep tabs on their networks. Still a part of me wants to high-five him for his cleverness right up to the point he was caught.
Verizon Business Security Blog » Blog Archive » Case Study: Pro-active Log Review Might Be A Good Idea.