AMZN - Amazon.com Inc.

[DCG]

What I ideally want is the iPad to be able to go between backlit LCD display and eInk. Someday. Apple filed a patent for something like this, but who knows if it'll see the light of day.

[Scudbucket]

What I ideally want is the iPad to be able to go between backlit LCD display and eInk. Someday. Apple filed a patent for something like this, but who knows it'll see the light of day.

 

Well done.

[Liberty]

On the lighter side...

 

http://boingboing.net/2014/12/04/amazon-mails-customer-conveyor.html

 

http://i.imgur.com/Nm1FIWM.png

 

Amazon says they have to mail the roller back or they'll be charged $19 for it...

[rpadebet]

And this .... they might be secretly funding the cannabis grinder though :-\

 

http://www.valuewalk.com/2014/12/amazon-sends-student-5600-worth-goods-free/

[rkbabang]

And this .... they might be secretly funding the cannabis grinder though :-\

 

http://www.valuewalk.com/2014/12/amazon-sends-student-5600-worth-goods-free/

 

LOL, but what exactly does a cannabis grinder do that a regular burr grinder for coffee doesn't?  A coffee grinder works just fine (or so I've heard from 'a friend', of course).  And a coffee gold filter works just fine to filter the grinds out of the butter when you are done (again, so I've heard).

 

[rpadebet]

Anybody has any thoughts on AWS valuation as a standalone? I have seen values ranging from 20B to 50B?

 

I thought it would be interesting to see how the EV/Adj Sales metric for AMZN (ex-AWS) compares against other retailers like WMT. I suspect there is not much of growth premium built into AMZN retail business. Almost all of the  growth premium most likely relates to AWS.

 

 

Btw, this thanksgivng I got myself the unlocked FIRE phone ;D. They were selling it for $199. My prime membership was up for renewal, $99 for unlocked phone seemed a no brainer. I applied for their cash back credit card and got another $70 off that price. ;D

[JAllen]

How do you like the phone?

[rpadebet]

How do you like the phone?

 

Expected delivery is by Christmas. Can't be bad for the price :). I intend to either gift it or use it as an ipod touch with data capability

[plato1976]

I care more about what a business AWS will be in the long run

looks like it won't be as good as a dominant retailer with some moats

 

more like a utility in the past

the profitability will be mediocre

 

Anybody has any thoughts on AWS valuation as a standalone? I have seen values ranging from 20B to 50B?

 

I thought it would be interesting to see how the EV/Adj Sales metric for AMZN (ex-AWS) compares against other retailers like WMT. I suspect there is not much of growth premium built into AMZN retail business. Almost all of the  growth premium most likely relates to AWS.

 

 

Btw, this thanksgivng I got myself the unlocked FIRE phone ;D. They were selling it for $199. My prime membership was up for renewal, $99 for unlocked phone seemed a no brainer. I applied for their cash back credit card and got another $70 off that price. ;D

[rpadebet]

I care more about what a business AWS will be in the long run

looks like it won't be as good as a dominant retailer with some moats

 

more like a utility in the past

the profitability will be mediocre

 

 

What makes you think so?

AWS as far as I know has 2 parts. the utility like infrastructure rental business and a highly scale-able software development platform business. By themselves, they might not be businesses with great moats, but put together you can see how they can have pricing power. 

 

 

Just as a case study, you can take a look at the following

https://www.jaspersoft.com/cloud-analytics

 

AWS rents out their infrastructure to these guys and gets a 20% cut of their per user revenue. You can clearly see why this model of renting is attractive for small developers like this. Once these developers are on this platform and their clients start saving and accessing data there, its very difficult to shift to another platform.

 

In someways this business is like the "cable" business where AWS not only rents out the infrastructure, but they have a 20% stake in all the content providers + the content providers are "stuck" on this platform unlike in the cable business.

 

There is lot of scale to be had here.

[Eric50]

Must watch interview with Bezos. Very interesting how the model has evolved to become almost a VC business.

 

http://www.businessinsider.com/amazons-jeff-bezos-on-profits-failure-succession-big-bets-2014-12

[Scudbucket]

Thanks for sharing!

[innerscorecard]

http://onefoottsunami.com/2014/07/09/hip-hipmeh/

 

Back in 2004, Matt Rutledge started Woot.com with the simple premise of one deal a day. By 2010, Woot had grown into a rather massive empire, one which sold to Amazon for $110 million dollars. Unfortunately, since then, it’s gone quite downhill. It’s not really a “deal-a-day” site at all any longer, and the magic has been drained out of it. Rutledge recently spoke with D Magazine about Woot and his experience with Amazon, and it’s a great read. This section is particularly bizarre:

 

At length, after a bit of business talk that maybe resembled a cousin of an actual breakfast meeting, Rutledge blurted out a question that had been troubling him: “Why did you buy Woot?”

 

…

 

So there sat Bezos at the breakfast table, faced with a question for which he was apparently unprepared. Many painful seconds passed without an answer. Rutledge let the pause lengthen as long as he could bear it and was just about to tell his host to forget it, when Bezos finally spoke.

 

He looked down at his plate. Bezos had ordered a dish called Tom’s Big Breakfast, a preparation of Mediterranean octopus that includes potatoes, bacon, green garlic yogurt, and a poached egg. “You’re the octopus that I’m having for breakfast,” Rutledge remembers Bezos saying. “When I look at the menu, you’re the thing I don’t understand, the thing I’ve never had. I must have the breakfast octopus.”

 

Well, that’s certainly a creepy answer. Anyhow, Rutledge has learned a little something from his time at Amazon, which he cut short at no small cost. He’s decided that he shouldn’t sell out his idea, nor allow it to be bastardized. Fortunately, he got paid a pretty penny to learn that lesson, and with those earnings he’s decided to try the same idea all over again.

[compoundinglife]

http://onefoottsunami.com/2014/07/09/hip-hipmeh/

 

Back in 2004, Matt Rutledge started Woot.com with the simple premise of one deal a day. By 2010, Woot had grown into a rather massive empire, one which sold to Amazon for $110 million dollars. Unfortunately, since then, it’s gone quite downhill. It’s not really a “deal-a-day” site at all any longer, and the magic has been drained out of it. Rutledge recently spoke with D Magazine about Woot and his experience with Amazon, and it’s a great read. This section is particularly bizarre:

 

At length, after a bit of business talk that maybe resembled a cousin of an actual breakfast meeting, Rutledge blurted out a question that had been troubling him: “Why did you buy Woot?”

 

…

 

So there sat Bezos at the breakfast table, faced with a question for which he was apparently unprepared. Many painful seconds passed without an answer. Rutledge let the pause lengthen as long as he could bear it and was just about to tell his host to forget it, when Bezos finally spoke.

 

He looked down at his plate. Bezos had ordered a dish called Tom’s Big Breakfast, a preparation of Mediterranean octopus that includes potatoes, bacon, green garlic yogurt, and a poached egg. “You’re the octopus that I’m having for breakfast,” Rutledge remembers Bezos saying. “When I look at the menu, you’re the thing I don’t understand, the thing I’ve never had. I must have the breakfast octopus.”

 

Well, that’s certainly a creepy answer. Anyhow, Rutledge has learned a little something from his time at Amazon, which he cut short at no small cost. He’s decided that he shouldn’t sell out his idea, nor allow it to be bastardized. Fortunately, he got paid a pretty penny to learn that lesson, and with those earnings he’s decided to try the same idea all over again.

 

Not that anyone cares but "Tom's favorite breakfast" is a dish at Lola in downtown Seattle.

[LC]

FYI some of his new stuff:

 

https://mediocre.com/

https://meh.com/

[jschembs]

FYI some of his new stuff:

 

https://mediocre.com/

https://meh.com/

 

At first I thought you were sarcastically referencing new Tom Douglas restaurants!

[Phaceliacapital]

Anyone an idea on how to view those videos?

[handycap5]

i have a different view on the "octopus breakfast" bit above. i believe that amazon has proven acquisitive of anything that can be perceived as competitive to amazon's core proposition, from the customer's point of view (amazing price, selection, availability/speed). when quidsi started delivering diapers same day, this is much more competitive to Amazon (in the customer's mind) than Target selling diapers.

 

if you believe the game is scale and a massive improvement for the customer (amazing price, selection, availability/speed), then it may follow that Amazon wants to race toward the end-point while denying a foothold to anyone else who might compete for that space in the customer's mind. Quidsi should be bought - it cannot be owned by WMT.

 

Sounds like this case is something similar...

[muscleman]

I am comparing AMZN and GOOG on its numbers.

Note that AMZN does capitalize its software development costs over two years, instead of expensing it, as shown on the 10-K.

 

But let's just use the blue-sky assumptions for now and say that AMZN does not need anymore software developers.

Adding back the entire technology and content expense, which is 6.5 bn last year, roll the dice and assume this year it would be 8.5. Give the earnings have been around zero all the time, we can just say, the true "earnings" is 8.5 bn this year. (market cap minus cash)/ true "earnings", I get 16 P/E.

 

GOOG's 10-K shows that the 2013 year total R&D cost is 7.9 bn. Add that back to net income and we get 20 bn. Roll the dice and just assume this year is 24 bn.

Then (market cap minus cash)/ true "earnings", I get 12 P/E.

 

It seems like GOOG is a better buy at this price than AMZN on this back of the napkin analysis, though I won't buy at this kind of 12 P/E.

 

 

[JAllen]

Google Shopping to Counter Amazon - Testing ‘Buy Now’ Button, Other Enhancements to Build Online Commerce Site

http://www.wsj.com/articles/google-preps-shopping-site-to-challenge-amazon-1418673413

 

If I were a GOOG shareholder I might be concerned that I was holding a stock with a $350B market cap, that was defending itself against an upstart with a $140B one.  You could focus perhaps too much on current earnings and P/E and miss the bigger picture and what that picture will look like in five and ten years.

 

This would be a scary quote to me if I was a GOOG shareholder:

 

If Google goes ahead, it would be the search giant’s latest moves to combat Amazon’s increasing sway over online commerce. In the third quarter, 39% of U.S. online shoppers began researching their purchases on Amazon and only 11% started on search engines like Google, according to Forrester Research . That’s a reversal from 2009, when 24% started on search engines and 18% on Amazon.

 

 

I'll balance this post out with adding that AMZN is defending itself against GOOG in cloud-computing, but as of right now, the retail businesses are clearly more important to both.

[JAllen]

From the above article: Expanded use of smartphones and mobile-payment services pose another hurdle for Google. Many smartphone users bypass traditional websites, and the search engines pointing to them, in favor of apps from retailers, or Amazon.

 

Google is effectively dependent on the quality of the average mobile experience from online retailers.  If AMZN's app is better than the online retailers GOOG leads online shoppers to, why won't shoppers increasingly use AMZN's app?  Again, the one with the best experience and selection will win, and it seems like AMZN is winning right now.

Another way GOOG is defending itself against AMZN: Google Express.  I suppose there are two sides to this argument: one, there's nothing AMZN has that Google can't get (although I would debate selection and FC/logistical capacity), but I would rather own the smaller company that the larger one is defending itself against and trying to replicate, and the one with momentum.

[Palantir]

I'm not worried, GOOG throws stuff at the wall and sees what's going to stick, and takes on random projects. Chances are they will fail. Any of you on Google+?

[karthikpm]

I am on Google+ , I use it because there's far fewer "friends" there and I hate how intrusive and nosy FB users are

[rogermunibond]

http://www.nytimes.com/2014/12/18/technology/personaltech/amazon-not-as-unstoppable-as-it-may-appear.html

 

Mentions a number of SF based startups that offer technology to connect bricks & mortar retailers with delivery and online customers.

 

Postmate, Instacart, Curbside, not to mention Google's Express.  I suppose all the more reason for Amazon to get same-day capability across their major markets.

[JAllen]

Positive, well-done review for Prime Now: http://qz.com/317290/test-run-of-amazons-new-prime-now-instant-delivery-service-verdict-wow/