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Amazon Has Largest Profit Ever

February 2, 2018 by  
Filed under Around The Net

Amazon.com Inc reported a profit near $2 billion, the largest in its history, as the online retailer attracted millions of new customers to its Prime fast-shipping club for the holiday season and as changes to U.S. tax law added to its bottom line.

Shares rose more than 6.4 percent in extended trading, after previously closing down 4 percent on the Nasdaq.

Seattle-based Amazon is using fast shipping, television shows exclusive to its website and forays into new technology, such as its voice-controlled Alexa devices, to win and keep high-spending Prime members. Its $13.7 billion acquisition of Whole Foods Market last year is helping it capture shoppers’ grocery sales, too.

The world’s largest online retailer said net income more than doubled to $1.86 billion, or $3.75 per share in the fourth quarter ended Dec. 31. Its profit received a provisional $789 million boost from the U.S. Republican tax bill passed in December. Analysts on average were expecting just $1.85 per share, according to Thomson Reuters I/B/E/S.

“This was another blow-out quarter for Amazon,” said GBH Insights analyst Daniel Ives. “The retail strength was eye-popping as the company had a banner holiday season and looked to capture roughly 50 percent of all e-commerce holiday season sales.”

As expected, the period running from before the U.S. Thanksgiving holiday through New Years was Amazon’s biggest-ever by revenue. Sales rose 38 percent to $60.5 billion in the quarter, beating expectations.

The company’s fast delivery, like its two-hour Prime Now service, has helped win over holiday shoppers eager to avoid the crowds of big box retailers. Prime saw more than 4 million sign-ups in one week alone last quarter, and revenue from subscription fees grew 49 percent to $3.2 billion, Amazon said.

That figure is expected to rise this quarter in part because the company recently raised the fee for month-to-month Prime plans, affecting some 30 percent of subscribers, according to analysts at Cowen & Co. Some 60 million, or close to half of all U.S. households, are estimated to have Prime subscriptions.

Advertising and other revenue rose 62 percent to $1.74 billion.

Perhaps the surprise star of the past quarter was Amazon’s voice aide Alexa, embedded in the company’s Echo speakers and Fire TV players, as well as some cars and house gadgets. Millions of Amazon customers ordered goods by voice with Alexa in the past year, said Brian Olsavsky, Amazon’s chief financial officer, on a call with reporters.

“Our 2017 projections for Alexa were very optimistic, and we far exceeded them,” added Jeff Bezos, Amazon’s founder and chief executive, in a statement. “We don’t see positive surprises of this magnitude very often — expect us to double down.”

Alphabet Unveils New Cybersecurity Business Chronicle

January 25, 2018 by  
Filed under Around The Net

Alphabet Inc has unveiled Chronicle, a cybersecurity business developed in its X incubation unit in February 2016 that is focusing on developing digital “immune systems” for customers.

Chronicle becomes the third company spun out of X and into the holding company Alphabet, joining self-driving vehicle technology company Waymo and life sciences company Verily as independent units alongside Google.

Stephen Gillett, a former Symantec Corp chief operating officer serving as Chronicle’s chief executive, said in a blog post that the new business is developing software to analyze corporate computer usage data and identify malicious programs that have infiltrated the system.

The technology is being tested at an unspecified number of Fortune 500 companies, he said.

Chronicle also houses VirusTotal, a virus-scanning tool Google acquired in 2012.

Selling cybersecurity services broadens Alphabet’s expanding efforts to become a player in enterprise technology. Google is a distant rival to Amazon.com Inc in offering cloud computing infrastructure and Microsoft Corp in both cloud services and workplace productivity software but is heavily investing to catch up as it seeks to grow revenue outside of its online advertising sales business.

“We’ll have our own contracts and data policies with our customers, while at the same time having the benefit of being able to consult the world-class experts in machine learning and cloud computing (among many other topics) that reside in other parts of Alphabet,” Gillett said.

Chronicle aims to go beyond the “dozens of security tools” organizations already use, the company said, by conducting automated data analysis to reduce the time it takes to discover an incident to minutes from hours or days.

The company would seek to lower customers’ data storage costs to make its technology affordable, Gillett said.

Astro Teller, head of Alphabet’s X, said his team pursued cybersecurity technology after noticing that dealing with cyber attacks had become a “yeah, yeah” problem, as in “yeah, yeah, a lot of people have diabetes, there are things to manage it.”

“The reality for most companies today when it comes to cybersecurity is reactive: find and clean up the damage,” Teller said in a blog post. “The real moonshot, which is still several years away, is predicting and deflecting cyber attacks before they infiltrate an organization’s network.”

Gillett, also a former Starbucks Corp chief information officer, co-founded Chronicle with former Google cybersecurity leaders Shapor Naghibzadeh and Mike Wiacek. Gillett met them after becoming executive-in-residence at GV, Alphabet’s venture capital investment arm, in 2015.

 

Netflix Subscriber Base Surges, Beats Expectations

January 24, 2018 by  
Filed under Consumer Electronics

Shares in Netflix Inc rose to a record high in after the video streaming service beat Wall Street targets for new subscribers in the fourth quarter.

At least eight brokerages raised their price targets for the company’s shares by as much as $50. Analysts at RBC Capital Markets and KeyBanc were most bullish, setting targets of $300 compared to the $248 it traded at on Tuesday.

In a statement after markets closed on Monday, Netflix said it added 6.36 million subscribers in international markets in the fourth quarter, beating analysts’ expectations of 5.1 million, according to FactSet.

It now has 117.58 million streaming subscribers globally.

“Overall, this was a ‘home run quarter’ for Netflix and should put any lingering worries to rest around sub(scriber) growth, international ramp, and the ‘negative’ possible effects from the (subscription) price increase,” GBH Insights analyst Daniel Ives said.

The company, which showcased popular returning series “Stranger Things”, “The Crown” and “Black Mirror” in the quarter, in October hiked its monthly fees for U.S. customers for the first time in two years.

“The subscriber growth validates management’s ongoing content investment, and should contribute to comfort with 2018’s increased $7.5-8.0B content spend and associated marketing to support the content slate and ever-growing library,” Canaccord Genuity analyst Michael Graham said.

Netflix and its peers Hulu and Amazon.com Inc’s Prime Video are steadily increasing budgets for producing original shows as they gain market share from traditional cable TV providers.

Netflix spent $90 million on Will Smith action movie “Bright” last year, its largest investment in an original film to date, and is already planning a sequel and additional investment in original films.

“Netflix continues to prove out the thesis that Internet TV is replacing linear TV on a global basis,” Evercore ISI analyst Vijay Jayant said.

Out of the 44 analysts that cover Netflix’s stock, 28 now rate it at “buy” or higher, 14 at “hold” and two at “sell” or lower. The median price target for the stock was $250, only marginally above its trading price after Tuesday’s gains.

Hulu ended 2017 with 17 million subscribers while analysts estimate Amazon’s Prime service, which includes a free video subscription, has around 90 million customers.

Microsoft Takes 1st Place In Top 100 Global Technology Leaders List

January 18, 2018 by  
Filed under Around The Net

Thomson Reuters Corp unveiled its “Top 100 Global Technology Leaders” list with Microsoft Corp in the no. 1 spot, followed by chipmaker Intel Corp and network gear maker Cisco Systems Inc.

The list, which aims to identify the industry’s top financially successful and organizationally sound organizations, features U.S. tech giants such as Apple Inc, Alphabet Inc, International Business Machines Corp and Texas Instruments Inc, among its top 10.

 Microchip maker Taiwan Semiconductor Manufacturing, German business software giant SAP, and Dublin-based consultant Accenture round out the top 10.  The remaining 90 companies are not ranked, but the list also includes the world’s largest online retailer Amazon.com Inc and social media giant Facebook Inc.

The results are based on a 28-factor algorithm that measures performance across eight benchmarks: financial, management and investor confidence, risk and resilience, legal compliance, innovation, people and social responsibility, environmental impact, and reputation.

The assessment tracks patent activity for technological innovation and sentiment in news and selected social media as the reflection of a company’s public reputation.

The set of tech companies is restricted to those that have at least $1 billion in annual revenue.

According to the list, 45 percent of these 100 tech companies are headquartered in the United States. Japan and Taiwan are tied for second place with 13 companies each, followed by India with five tech leaders on the list.

By continent, North America leads with 47, followed by Asia with 38, Europe with 14 and Australia with one.

The strength of Asia highlights the growth of companies such as Tencent Holdings Ltd, which became the first Asian firm to enter the club of companies worth more than $500 billion, and surpassed Facebook in market value in November.

Amazon Ships Crosses 5B Packages Shipped In 2017

January 4, 2018 by  
Filed under Around The Net

Online retailer Amazon.com Inc announced that it has shipped over 5 billion items worldwide via its subscription-based Prime service in 2017 while adding more new members than ever before.

The e-commerce giant, which revealed its Prime shipment numbers for the first time, did not give comparable full-year shipment number for 2016.

Amazon claimed that its Fire TV Stick and voice-controlled smart device Echo Dot were the best-selling products among U.S. Prime members from any manufacturer in any category across all of its product offerings.

Amazon Prime, which offers its users services like free two-day shipping for certain purchases, unlimited streaming of movies and TV shows with Prime Video, has been attracting more subscribers every year.

The company said it shipped over 1 billion items worldwide via Prime during the holiday season in 2016.

Amazon Prime, which entered countries including Mexico, Netherlands, Luxembourg, and Singapore last year, now is present in 16 countries around the world.

Shares of the Seattle, Washington based company were up 1.5 percent at $1,187 in afternoon trading.

 

Amazon Prime Video Makes It Apple TV

December 8, 2017 by  
Filed under Consumer Electronics

Amazon.com Inc and Apple Inc teamed up to offer the Amazon Prime Video app to Apple TV in more than 100 countries, the companies announced.

The news came a day after Alphabet Inc’s Google said it would block its YouTube video streaming application from two of Amazon’s devices and criticized the online retailer for not selling Google hardware.

Apple Chief Executive Tim Cook had said in June that Amazon’s streaming service would be available on Apple devices later this year.

Apple TV, a device for watching movies and television over the internet, will also start featuring live sports from its own Apple TV app this week, Apple said in a blog post on Wednesday.

While live sports were previously available on Apple TV in apps from ESPN and the National Basketball Association, the new additions to Apple’s own app enable features like sending alerts to connected iPhones and iPads when a big game is about to start or when a user’s favorite teams are locked in a close game.

Wednesday’s announcement followed a negotiation stretching back at least to 2015 when Amazon stopped selling Apple TVs on its retail site.

Google Blocks YouTube On Amazon Devices

December 7, 2017 by  
Filed under Consumer Electronics

A growing public spat in the technology industry escalated even further when Google said it would block its video streaming application YouTube from two Amazon.com Inc devices and criticized the online retailer for not selling Google hardware.

The feud is the latest in Silicon Valley to put customers in the crossfire of major competitors. Amazon and Google, which is owned by Alphabet Inc, square off in many areas, from cloud computing and online search to selling voice-controlled gadgets like the Google Home and Amazon Echo Show.

 The stakes are high: many in the technology industry expect that interacting with computers by voice will become widespread, and it is unclear if Amazon, Google or another company will dominate the space. Amazon’s suite of voice-controlled devices has outsold Google’s so far, according to a study by research firm eMarketer from earlier this year.

“Given this lack of reciprocity, we are no longer supporting YouTube on Echo Show and Fire TV,” Google said. “We hope we can reach an agreement to resolve these issues soon.”

Amazon said in a statement, “Google is setting a disappointing precedent by selectively blocking customer access to an open website.”

It said it hoped to resolve the issue with Google as soon as possible but customers could access YouTube through the internet – not an app – on the devices in the meantime.

The break has been a long time coming. Amazon kicked the Chromecast, Google’s television player, off its retail website in 2015, along with Apple Inc’s TV player. Amazon had explained the move by saying it wanted to avoid confusing customers who might expect its Prime Video service to be available on devices sold by Amazon.

Amazon and Apple mended ties earlier this year when it was announced Prime Video would come to Apple TV. Not so with Google.

 In September, Google cut off YouTube from the Amazon Echo Show, which had displayed videos on its touchscreen without video recommendations, channel subscriptions and other features. Amazon later reintroduced YouTube to the device, but the voice commands it added violated the use terms and on Tuesday Google again removed the service.

The Fire TV loses access to its YouTube app on Jan. 1, Google said. Amazon has sold that device for longer than the Echo Show, meaning more customers may now be affected.

Amazon, Walmart Price War Heats Up For The Holiday Season

November 28, 2017 by  
Filed under Around The Net

Walmart Stores Inc is moving ever so close to matching Amazon.com Inc’s online prices for the first time, a key milestone in its effort to regain the “low price leader” title.

Walmart has aggressively invested in making its prices more competitive against brick-and-mortar rivals since the start of the year.

Now, the shrinking gap is also becoming noticeable across a broad range of product categories online, according to a price study conducted for Reuters, as well as interviews with pricing experts, retail consultants, vendors and company sources.

 Prices at Walmart.com are now only 0.3 percent more expensive than Amazon on average, according to the study by retail data analytics firm Market Track, which analyzed prices of 213 products in 11 categories over a period of 700 days ending November 7, 2017.

By comparison, Walmart’s online prices were 3 percent higher than Amazon’s on average in the first 350 days ending November 7, 2016, according to the study.

In the popular wearables category, which includes fitness trackers and smartwatches, Wal-Mart’s prices are 6.4 percent lower than Amazon this year compared to 12.6 percent higher in the same period a year ago. For sports and outdoor products, Walmart is now 1.3 percent lower versus 3.5 percent higher a year ago.

These findings indicate that Walmart has managed to slash prices online across several product categories consistently, rather than with just temporary discounts.

“We are committed to having online prices that meet or beat prices at other top sites,” said Walmart spokesman Dan Toporek. He said for some items the retailer now displays two prices online to show shoppers when they can get a lower price by picking up their order in a store, but declined to comment further on the company’s pricing strategy.

Amazon spokeswoman Kate Scarpa said nothing has changed in the retailer’s approach to delivering low prices to customers.

“Amazon’s prices are as low or lower than any other retailer and we work hard for customers to ensure that’s true every day,” she said, declining to comment further on the retailer’s pricing strategy.

 

Amazon Decides Against Offering ‘Skinny Bundle’ Video Service

November 16, 2017 by  
Filed under Consumer Electronics

Amazon.com Inc has decided to cancel plans to launch an online streaming service bundling popular U.S. broadcast and cable networks because it believes it cannot make enough money on such a service, people familiar with the matter told Reuters.

The world’s largest online retailer has also been unable to convince key broadcast and basic cable networks to break with decades-old business models and join its a la carte Amazon Channels service, the sources said and has backed away from talks with them.

 The reversals come a month after the abrupt departure of Roy Price from his job as head of Amazon Studios, the company’s high-profile television production division, following an allegation of sexual harassment, which he has contested.

They show how difficult it is for Amazon to change entrenched habits in the U.S. entertainment business in the same way that it has done in retail, cloud computing and other areas.

An Amazon spokeswoman declined to comment.

Video has become an important tool for Amazon in generating subscriptions for its U.S. $99-a-year Prime membership service. It is on track to spend some $4.5 billion or more on video programming this year, analysts estimate.

On Monday it made waves in the entertainment world with the purchase of global television rights to “The Lord of the Rings,” planning a multi-season series to draw more viewers to Prime.

Such an offering, known in the industry as a “skinny bundle,” is a way of capturing younger viewers who are dropping traditional, expensive cable or satellite TV packages in favor of channels watchable on smartphones and tablets.

But in recent weeks, Amazon decided not to move ahead with a service on the grounds that it would yield too low a profit margin and did not necessarily indicate the direction the TV business will eventually go, the sources told Reuters.

Amazon could still decide to change course and introduce a skinny bundle, but the talks are over, the sources said.

Roku Signs Licensing Deal For Inclusion On Philips TVs

November 15, 2017 by  
Filed under Consumer Electronics

Roku Inc’s shares skyrocketed by 43 percent to a record high earlier this week after the streaming device maker said it signed a licensing deal that would put its technology on Philips-branded televisions in the United States this year.

The company said the licensing partnership with Japan’s Funai Electric Co Ltd, which manufactures Philips N.V. televisions for North American, would place its operating system on Philips’ smart TVs.

 Roku also said that it would give a $20 discount on its $69.99-priced streaming stick for the Black Friday weekend, and separately said its customer would get a free one-month trial of AT&T Inc’s streaming service DirecTV Now.

The barrage of news was well received by investors, who sent Roku’s shares jumping 28.5 percent to close at $42.71 on Monday. The stock hit a high of $47.49 earlier in the session.

“The price move was solely due to long shareholders bidding up ROKU’s stock price” and not due to investors covering their short positions in the stock, financial analytics firm S3 Partners said in a note.

S3 Partners said while the short interest in Roku has risen since its initial public offering (IPO) in late September, it has stayed relatively flat in November and isn’t likely to go up further due to the limited number of shares available to borrow.

Investors who sell securities short first borrow shares and then sell them, expecting the price to fall so they can then buy the shares back at the lower price, return them to the lender and pocket the difference.

Roku, one of the first to make a device to stream content such as from Netflix Inc onto TVs, is now combating deeper-pocketed entrants such as Apple Inc, Alphabet Inc’s Google and Amazon.com Inc among others.

Still, up to Monday’s close, Roku’s stock has now more than tripled from its IPO price of $14 on Sept. 27. The stock debuted at $15.78 on the Nasdaq on Sept. 28.

 Los Gatos, California-based Roku’s success in the stock market is in stark contrast to the fortunes of other technology companies to make their market debuts this year.

Snap Inc’s shares have fallen 26 percent since its February IPO, while Blue Apron Holdings Inc has lost about 70 percent since its IPO in June.

Amazon Targets Teen Shoppers With New Program

October 13, 2017 by  
Filed under Around The Net

The world’s largest online store announced it has created a new feature for families, allowing moms and dads to give their teens more autonomy to purchase goods on Amazon while still under parental supervision.

With the new US-only feature, which is targeted for kids ages 13 to 17, a parent can add up to four teens to their Amazon Household account for free and set a payment method that a teen can’t see, as well as shipping addresses.

Teens can then shop on the Amazon mobile app on their own. Parents will get an email or text for purchases their teens make, and can approve or decline each order. When making purchases, teens can even add a note to their parents, such as “I need this book for school.”

“With this program, teenagers will have that independence and parents will have the control that they need,” Michael Carr, Amazon’s vice president of Amazon Households, said in an interview.

Giving these extra benefits to teenagers should help Amazon hook its next generation of customers to its e-commerce site and other services. As part of this effort, the company in August introduced cheaper student pricing for its Prime Music Unlimited service and has been building out college pickup locations across the country.

The new service should also make life a little easier for parents — a key demographic for Amazon — allowing them to create separate Amazon log-ins for their kids that they can monitor.

While Amazon’s conditions of use already let children under 18 to use its services while under parental supervision, the company didn’t make doing so all that convenient. Parents previously might have had to share their log-in credentials, along with their credit card numbers, with their teen, or set up separate accounts for their children that they’d likely have to check regularly.

The new teen program is available under Amazon Household, a service that lets families share their Prime membership benefits and manage parental controls for their kids’ Amazon devices. Amazon won’t require age verifications to sign up for the new program and the company didn’t create a limited set of items specifically for teens, other than legal restrictions on certain products, such as beer.

Parents can choose not to approve each item their teens buy and instead set spending limits per order. Amazon, though, didn’t yet create spending limits on a per week or monthly basis.

Any Amazon customers, including non-Prime shoppers, can use the new program. For now, parents with Prime membership can share Prime two-day shipping, Prime Video and Twitch Prime with their teens’ accounts. Other services, such as Prime Now and AmazonFresh, aren’t yet available through the new teens program.

Ikea To Sell Products Through Third-Parties Online

October 12, 2017 by  
Filed under Around The Net

Ikea will soon offer its products through third-party online retailers in an attempt to reach more customers.

A pilot program is scheduled to start sometime next year, the Swedish furniture retailer said. The company is “curious” about what will happen as it plans to gather new insights from the pilot, Ikea spokesperson Josefin Thorell said in an email.

“[However], there are no decisions regarding what marketplaces we want to partner with yet, and also no decision regarding what markets,” Thorell added.

The news of Ikea possibly using the likes of Amazon and other third-party sites to sell its furniture and smart home products comes nearly four months after Ikea knocked down reports that it had reached a deal to work directly with the e-commerce giant.

Ikea said at the time that any products currently sold on Amazon or other sites are being done by private resellers. More than 2.1 billion people visited Ikea’s websites globally in 2016.

 

Amazon Echo Users Lean Towards Apple, Study Says

October 6, 2017 by  
Filed under Consumer Electronics

What does your choice of smart speaker reveal about your other preferences?

If you choose a Google Home speaker, does that mean you drift Android-ward? And what if you bought an Amazon Echo?

Well, let me tell you. I have just been made smarter by a piece of research from securities intelligence consultancy Consumer Intelligence Research Partners.

It chatted with 300 Amazon Echo and Google Homeowners between July 11 and 27.

It concluded that those who own an Echo — which reminds me of the result of an ill-starred relationship between an air-purifier and a lipstick — have a penchant for Cupertino.

Of those surveyed, 55 percent of Echo users have an iPhone. The remainder have Android. Conversely, 75 percent of those who bought the oversized salt cellar known as Google Home are committed to Android phones.

Josh Lowitz, partner and co-founder of CIRP, insisted in a press release that the proportion of iPhone owners among Echo users was higher than the phone’s share of the US market. That stands at roughly 34 percent.

As for the proportion of Android users among Homeowners, that was merely consistent with Android’s share of the US phone market, he said. (Numbers vary as to how big Android’s share is. Some place it at around the 55 percent mark.)

Lowitz didn’t immediately respond to a request for comment.

When it comes to tablets, Echo owners also skew toward Apple, says the research. 49 percent have an iPad, while 25 percent own an Amazon Fire tablet.

Amazon Gets Hit With Huge Tax Bill From The EU

October 5, 2017 by  
Filed under Around The Net

Amazon has been informed that it must pay about 250 million euros ($294.38 million) in back taxes to Luxembourg, the latest U.S. tech company to be caught up in a European Union crackdown on unfair tax deals.

The fine was much lower than some sources close to the case had expected and is only a fraction of the 13 billion euros that Apple Inc was ordered to pay to Ireland last year.

EU Competition Commissioner Margrethe Vestager, who has other big U.S. tech companies in her sights, has taken a tough line on multinational companies’ approach to tax.

“Luxembourg gave illegal tax benefits to Amazon. As a result, almost three-quarters of Amazon’s profits were not taxed,” Vestager said.

Amazon said it was considering an appeal.

“We believe that Amazon did not receive any special treatment from Luxembourg and that we paid tax in full accordance with both Luxembourg and international tax law,” Amazon said in a statement after the announcement.

Though the EU has taken on several U.S. tech companies, both in antitrust and in tax avoidance cases, Vestager said that her approach was not biased against foreign companies

 “This is about competition in Europe, no matter your flag, no matter your ownership,” Vestager said.

She also welcomed the debate kicked off by French President Emmanuel Macron who called for more integrated corporate tax regimes in Europe, aiming to close the loopholes used to reduce tax bills.

The Commission said the exact amount of tax to be reclaimed from Amazon would still need to be calculated by Luxembourg authorities.

The 250 million euros is significantly less than the 400 million euros which sources close to the matter told Reuters a year ago was under consideration by Vestager.

The Commission said Luxembourg allowed Amazon to channel a significant portion of its profits to a holding company without paying tax. The holding company was allowed to do this because it held certain intellectual property rights.

“The Commission’s investigation showed that the level of the royalty payments, endorsed by the tax ruling, was inflated and did not reflect economic reality,” the Commission said in a statement.

Amazon, which employs 1,500 in the grand duchy, is one of the biggest employers in the country of half a million people. The U.S. company, which has a Europe-wide staff of some 50,000, in 2016 made a $2.4 billion profit on global revenues of $136 billion.

Amazon’s Streaming Of NFL Game Logged Nearly 2M Viewers

October 2, 2017 by  
Filed under Around The Net

Nearly 2 million people logged onto Amazon.com  for the online retailer’s first livestream of Thursday Night Football, the U.S. National Football League said on Friday.

Some 1.9 million people tuned in to Amazon’s kickoff show and game between the Chicago Bears and Green Bay Packers, according to the NFL. That compares to 2.3 million for the first digitally streamed game last year on Twitter Inc,  which had the online rights at the time.

But viewers watched the broadcast for longer on average on Amazon. Its average worldwide audience for at least 30 seconds was 372,000 people, compared with 243,000 on Twitter for the first game last year, the NFL said.

Streaming live sports is a new, integral part of Amazon’s strategy to encourage more people to sign up to its Prime shopping club and spend more on retail goods.

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