Blog Archives

Amazon’s penultimate Draw | Advantage O’nomics

Holiday sales took fourth Quarter performance to $9.52 billion and they also upped Q1 forecasts to $6.45bn to $7 bn

Amazon seems quite ready to open the war front with iPad, but as of now it is fair for both companies to hedge their bets with Kindle choosing a 70% commission on each sale over a smaller base than the $10 plus billion in real books, while the iPad would like to be compared with Samsung and Nokia,”part of the iPod and iMac family?” This is probably the penultimate fr Amazon to draw but it has one more fight in it to get to $100 billion

Amazon’s Operating Margins YOY growth does not mean much but the margins are healthy at 5% with net income of $384 mn at 4.03% based on the use of cash to drive down costs and get more volumes online. It mustt be remembered that Black Friday was beaten by Cyber Monday again this season. Amazon’s Warehousing and delivery modelling is a treat to watch in liquid motion.

The $2 billion buy back should keep the Amazon investors happy while the Kindle franchise develops more lung power in the market place. Kindle recently reworked its commission structures to 50% for the Author/Publisher

WE WILL WAIT for the content library on the iBook store to be updated for a more valid comparison, Amazon’s market development strategy is economically more powerful in the new digital footprint, while Apple is great at marketing. Amazon is also getting better at publisher deals, so it is a fun game for consumers and subscribers..It’s tempting to get everyone to plan a subscription model in the digital media game, but it hasn’t worked, with or without paywalls. Also an idle mind starts wondering if they can get to Facebook and Twitter to use as a backbone for the next digital age effort?

To reiterate our stand, Amazon has single handedly done more to bring this economy out of recession than the others in the Top 100, tech or mobile or even Media

High speed trains, lower Job claims, the ‘uprising’ is here and USA won’t be number 2


Tweets from the Market – July 24, 2009

Do remember to validate picks at $AMZN is down 8% as we speak

Facebook at 77 million visitors, Amazon 64 m, Craigslist at 47 m, WordPress at 26m and Twitter at 20m compared to Goog at 157m in June09
about 2 hours ago from TweetDeck

So $AMZN makes $1.75 bn per month from 64 million visitors
5 minutes ago from TweetDeck

That is more than $27 from every single visitor! $AMZN
3 minutes ago from TweetDeck

If Twitter made 10% of that they would have sales of $54million to start with ( based on June comscore)
2 minutes ago from TweetDeck

China’s new loans may surge to a record 11 trillion renminbi ($1.6 trillion) this year as the government refrains from tightening lending rules to protect economic growth
just now from Tweetdeck

Goldman /Blankfein paid a 23% return on the govt’s TARP investment, paying $1.1 billion for the warrantshalf a minute ago from TweetDeck

Also Buffet sold a third of his stake in Moody’sjust now from Tweetdeck

China’s state construction giant raised a $7.3 billion in IPO4 minutes ago from TweetDeck

(Green Shoots?) Both American Express (AXP) and Capitol One (COF) reported earnings that were quite weak (seekingalpha dot com)2 minutes ago from TweetDeck

$CIT looks in line to become smaller, selling its comml business and most likely losing its aviation lending and rail finance biz profitablyhalf a minute ago from TweetDeck

BTW, we continue to be short on both $AXP and $COF and bullish on the market ( same as before act. results came out @zyakairahalf a minute ago from TweetDeck

<-> twitter @blrmoneytalkz

Where will circuit city business migrate?

Circuit city is shutting down a business with annual online sales of $1.2. to $1.4 billion and over 2000 stores. In fact currently, over 568 stores are trying to start a close out sale and get rid of leftover inventory.

Circuit city is a definite better than average , but still a recent player in ecommerce and not much of its sales were consummated online. However, it did have a visible brand presence online and probably that is being noticed by some analysts.

Our esteemed colleagues at JP Morgan – Khan avers however that this business will all go to Amazon. I think that is not possible because of some pretty good and some rudimentary reasons that I think are the drivers of online business and the booms and the busts.

Online business will keep growing at Amazoon, but the crisis at Circuit city means that because of its very specific and the awesome ‘Come home America’ positioning this business might remain the purview of ebay and brick and mortar stores.

For Amazon, business drivers are no loadng of shipping cots and impeccable seamless customer service. Given the nature of their electronics business, they are like other online stores a little stymied in the range they can provide and the typical American would love to stay with a Walmart that has extended its range and corrected its pricing in tune with the market. The Amazon business will continue to grow because of its robust business model and attention to customer choice and efficient supply chain and delivery mechanics. Thus it would not borrow from the business of a Circuit City which was looking more to get the customer to come and pick up the merchandise from its own stores.

Reuters | Amazon sales up, holiday sales down 5%

NEW YORK Reuters – Online retailer Inc AMZN.O said on Friday it posted its best holiday sales season yet, even as sales and traffic at U.S. store chains were the weakest in decades.

Shares in Amazon rose 1 percent in pre-market trading on Friday. Analysts have pointed to Amazon as a rare bright spot in this years holiday shopping season due to its scale and flexibility, as retailers try to outdo each other with deep discounts to lure consumers during a recession.

Online sales were also helped by winter storms that hit large sections of the United States on the last major shopping weekend before Christmas.

Amazon said more than 6.3 million items were ordered on its site worldwide for the peak shopping day of December 15.

via Amazon claims record holiday orders in 08 season | Reuters .