State and local officials in Ohio are attempting to woo Amazon.com Inc with tax breaks and other perks to convince the No. 1 U.S. online retailer to build a $1.1 billion data center in central Ohio and create 120 jobs, according to public records.
The records offer a rare look at the typically tight-lipped company’s growth plans for its popular cloud computing division, Amazon Web Services, founded in 2006. There are 10 AWS data centers, called regions within the company, around the world, including four in the United States, AWS said.
“We are constantly evaluating a long list of additional target countries and U.S. locations,” AWS said in a statement.
In late August, the Ohio Tax Credit Authority extended an estimated $81 million in tax breaks to an Amazon subsidiary called Vadata Inc, according to state filings.
In exchange for the tax deal, Amazon has committed to invest at least $1.1 billion over the next three years to build a data center. It will also create 120 jobs with an average salary of $80,208 by the end of 2018, according to the filing.
Separately, city officials in Dublin, Ohio, are also looking to transfer 68.7 acres of city-owned land to the company from 2015 until 2024 – worth $6.75 million – among other perks, according to city documents posted online.
The Columbus Dispatch newspaper reported that Dublin city officials are expected to vote on whether to proceed with the Amazon offer on Sept. 22.
The company has asked the Federal Communications Commission for permission to use two blocks of frequencies for the tests, which are scheduled to last about six months and begin in October. They will be conducted above an area of more than 1,400 square kilometers in the center of New Mexico to the east of Albuquerque.
“Google recently acquired Titan Aerospace, a firm that specializes in developing solar and electric unmanned aerial systems for high altitude, long endurance flights,” Google said in its application. “These systems may eventually be used to provide Internet connections in remote areas or help monitor environmental damage, such as oil spills or deforestation.”
Google said its application for temporary permission to make the transmissions was needed “for demonstration and testing of [REDACTED] in a carefully controlled environment.”
The FCC allows companies to redact certain portions of their applications when they might provide too much information to competitors.
In the application, Google said it wants to use two blocks of frequencies, one between 910MHz and 927MHz and one between 2.4GHz and 2.414GHz. Both are so-called “industrial, scientific and medical” (ISM) bands typically used for unlicensed operations.
The application has not yet been approved.
It’s the latest in a series of moves by the company to trial Internet delivery from the skies.
The company unveiled its ambitious Project Loon last year, which uses a series of high-altitude balloons that float in winds at about 20 kilometers (65,000 feet) above the Earth. The first experiments with Loon involved using a transmission system based on WiFi, but earlier this year the company began experimenting with LTE cellular transmissions in a test site in Nevada.
Google acquired Titan Aerospace in April this year for an undisclosed price.
The company said demand had outstripped supply of the new iPhone 6 and iPhone 6 Plus, which feature larger screens and longer battery life. Deliveries of pre-orders will begin on Friday and will continue through October.
Bumper first-day pre-orders point to first-weekend sales of up to 10 million units, analysts estimated.
“Assuming preorders are similar to the 40 percent of first weekend sales for the iPhone 5, this would imply iPhone 6/6Plus first weekend sales could be around 10 million,” Wells Fargo Securities analysts wrote in a note.
About 2 million pre-orders were received for the iPhone 5 in the first 24 hours after it went on sale in September 2012. Apple sold 5 million of these phones in the first weekend.
Apple sold 9 million iPhone 5Ss and 5Cs, which were launched last year, in the first three days in stores. The company did not reveal pre-order numbers for these phones.
Raymond James analysts said they expect sales of iPhone 6 and iPhone 6 Plus to top 9 million in the first weekend.
“Apple will be selling every iPhone it can make, at least through October. Because of this, the first weekend sales are typically more indicative of supply than demand,” they said.
The company routinely grapples with iPhone supply constraints, particularly in years that involve a smartphone re-design.
Apple’s website showed last week that the larger 5.5-inch “Plus” models displayed a wait time of up to a month. The 4.7-inch version was available for delivery on Sept. 19.
Janney Capital Markets analysts said the large number of pre-orders was due to “pent-up demand” for bigger iPhone screens.
The brokerage raised its sales estimate for the latest iPhones to 37.4 million units for the current quarter and 60 million for the quarter ended December.
The company said it was also exploring other options, including a sale or an investment, and liquidation as the last resort.
RadioShack, whose sales have been in free-fall since 2010 as it struggles to compete with internet retailers, said in a regulatory filing it was working with its lenders and landlords to restructure its debt and cut costs.
“It would surprise me if we got to Nov. 1 without a bankruptcy,” Wedbush Securities Inc analyst Michael Pachter told Reuters.
RadioShack shares, which are in danger of being delisted from the New York Stock Exchange, were up 2 percent at 95 cents in volatile early trading.
The company said same-store sales declined 20 percent in the latest quarter, while total sales plunged to their lowest in more than 20 years.
The company is being advised by a restructuring attorney at law firm Jones Day as it tries to strike a deal with creditors to close stores, two people close to the matter told Reuters on Wednesday.
RadioShack tried to close 1,100 stores this year, but reduced that number to 200 a year when lenders did not agree to the plans.
RadioShack’s landlords, however, may be open to mass store closures if they believe it will allow them to find new tenants more quickly than in a bankruptcy, a source close to the matter told Reuters.
David Tawil, president of hedge fund Maglan Capital that focuses on companies approaching bankruptcy, said he saw “major execution risks” to RadioShack’s recapitalization and turnaround efforts.
“I don’t think that the chances are great that RadioShack survives,” Tawil said, adding that the company’s credit default swaps were trading higher, pointing to market expectations of a near-term debt default.
The company ended the second quarter with $30.5 million in cash and $658.0 million in debt, which matures between 2018 and 2019.
The Fire Phone, which originally sold for $649 minus a contract commitment and for $199 with a two-year deal with AT&T, was marked down to $449 without a contract and 99 cents with one.
Amazon spun the dramatic price cut in the best possible light. “Fire is another example of the value Amazon delivers to customers,” said Ian Freed, vice president of Amazon Devices, in a statement Monday.
In fact, by all accounts, the Fire has done poorly. According to data mining done a month ago by ad network Chitika, Fire Phone usage grew only “incrementally” in the device’s first two months. By Aug. 14, Amazon’s phone accounted for just 0.02% of all smartphone-based ad impressions.
Chitika’s number was not a measurement of the number of devices in use, but of the online activity of Fire Phone users: The calculation was best described as “usage share.”
StatCounter, another metrics vendor that also tracks usage share, did not even list Fire Phone in its operating system data for the month of August.
In June, when Amazon CEO Jeff Bezos introduced the Fire Phone, most analysts slammed the pricing, saying that the online retailer needed to do more than simply mimic the competition.
“If the $199 on 2yr contract is all there is to Fire Phone pricing it will be a tough sell,” Carolina Milanesi, chief of research and head of U.S. business for Kantar WorldPanel Comtech, said on Twitter that day.
“Does the 99-cent price matter? Sure it does. But in the scheme of things, does it help? No, because you still have to have a contract,” Milanesi said in an interview today.
She pointed out that Apple, for example, gives away the iPhone 4S to customers who sign up for a two-year contract with a mobile carrier. The Fire Phone’s “unlocked” price of $449 is also identical to that of an off-contract iPhone 4S.
Amazon missed its chance to make a splash months ago, Milanesi argued. “This price then would have sent a different message,” she said. “It would have made a difference because at the time [mid-June] there was not a lot going on. But to do this the day before Apple announces its new iPhones, and right after Samsung showed off its Galaxy Note 4 and Note Edge?”
With transactions increasingly taking place on computers and mobile devices, retailers and banks are pouring resources into finding ways to make that experience as simple and easy as possible.
“It’s a digital tsunami,” said Eran Vanounou, chief executive of LivePerson Israel. “The big brands understand this big time. They understand they have to create a meaningful connection with consumers, not just a transaction.”
LivePerson, whose 8,000 plus clients include Bank of America and Home Depot, is headquartered in New York, though most operations are handled in Israel.
Its product, among other things, allows businesses to chat with customers and put together online campaigns. It also helps businesses “learn the behavior of online surfers”, Vanounou said, allowing them to better cater to their needs.
The company just finished four years of consecutive quarterly growth, he said. It posted second quarter revenue of $51.1 million, up from $43.2 million a year earlier. It also increased its 2014 outlook to $204-$207 million, from a previous $199-$204 million.
It had a $1.2 million quarterly net loss, compared to $1.8 million in 2013, which Vanounou said stemmed from a $50 million investment in an upgraded, browser-based platform the company is now launching.
“What you saw over the past year and a half, when our stock was up, down and again up now, although the company grew, it took and invested the money in building this platform. A huge investment,” he said.
Bitcoin is gaing greater acceptance at U.S. online merchants including Overstock.com and Expedia, as customers use a digital currency that just a few years ago was virtually unknown but is now showing some staying power.
Though sales paid for in bitcoin so far at vendors interviewed for this article have been a fraction of one percent, they expect that as acceptance grows, the online currency will one day be as ubiquitous as the internet.
“Bitcoin isn’t going anywhere; it’s here to stay,” said Michael Gulmann, vice president of global products at Expedia Inc. in Seattle, the largest online travel agent. “We want to be there from the beginning.” Expedia started accepting bitcoin payments for hotel bookings on July 11.
Until recently a niche alternative currency touted by a fervent group of followers, bitcoin has evolved into a software-based payment online system. Bitcoins are stored in a wallet with a unique identification number and companies like Coinbase and Blockchain can hold the currency for the user.
When buying an item from a merchant’s website, a customer simply clicks on the bitcoin option and a pop-in window appears where he can type in his wallet ID number.
Still, broad-based adoption of bitcoin is at least five years away because most consumers still prefer to use credit cards, analysts said.
“Bitcoin is a new way of making payments, but it’s not solving a problem that’s broken,” said George Peabody, payments consultant at Glenbrook Partners in Menlo Park, California. “Retail payments aren’t broken.”
There are also worries about bitcoin’s volatility: its price in U.S. dollars changes every day.
That risk is borne by the consumer and the bitcoin payment processor, such as Coinbase or Bitpay, not the retailer. The vendor doesn’t hold the bitcoin and is paid in U.S. dollars. As soon as a customer pays in bitcoin, the digital currency goes to the payment processor and the processor immediately pays the merchant, for a fee of less than 1 percent.
“We don’t have to deal with the actual holding of the bitcoin: it’s the payment processor that takes the currency risk for us,” said Bernie Han, chief operating officer at Dish Network Corp, in Englewood, Colorado. “That’s what makes it appealing for us and I guess for other merchants as well.”
Over 1,000 major enterprise networks and small and medium businesses in the U.S. have been compromised by a recently discovered malware package named Backoff and are probably unaware of it, the U.S. Department of Homeland Security (DHS) has said in a cybersecurity alert.
Backoff first appeared in October 2013 and is capable of scraping the memory contents of point of sales systems — industry speak for cash registers and other terminals used at store checkouts — for data swiped from credit cards, from monitoring the keyboard and logging keystrokes, from communicating with a remote server.
“Over the past year, the Secret Service has responded to network intrusions at numerous businesses throughout the United States that have been impacted by the “Backoff” malware,” the alert said. “Seven PoS system providers/vendors have confirmed that they have had multiple clients affected.”
The malware is thought to be responsible for the recent data breaches at Target, SuperValu supermarkets and UPS stores, and the Secret Service is still learning of new infections.
DHS first warned of Backoff in late July, when it noted the malware was not detectable my most antivirus software. That made it particularly difficult to stop, because much of the fight against computer viruses and malware rests on antivirus applications.
Most antivirus packages now detect Backoff, but DHS is advising network operators take immediate action to ensure they haven’t been affected.
“DHS strongly recommends actively contacting your IT team, antivirus vendor, managed service provider, and/or point of sale system vendor to assess whether your assets may be vulnerable and/or compromised,” it said. “The Secret Service is active in contacting impacted businesses, as they are identified, and continues to work with and support those businesses that have been impacted by this PoS malware.”
In many cases, hackers gained access to machines through brute-force attacks on remote log-in systems offered through companies like Microsoft, Apple and Google and other third-party vendors. Once inside, they were able to copy the malware to the machine and set it capturing credit card data.
The DHS asked that instances of it are reported to a local Secret Service field office.
While the in-house platform is initially planned to replace ads supplied by Google Inc on Amazon’s own website, the new system could challenge Google and Microsoft Corp’s advertising business in the future, the newspaper cited the people as saying.
Amazon’s system would resemble Google’s AdWords, and is planned to make it easier for marketers to reach the company’s users, the newspaper reported the people as saying.
The retailer is also building a tool that would help advertising agencies buy in bulk for thousands of advertisers, the Journal said, citing the people.
Amazon is known as a sleeping giant in the ad industry because it has rich consumer data but has been tentative about using it for a lot of advertising.
The company already has an advertising service it employs chiefly on its own website.
Amazon did not immediately respond to requests for comment.
Credit and debit card information belonging to customers made purchases at 51 UPS Store Inc. locations in 24 states this year may have been illegally accessed as the result of an intrusion into the company’s networks.
In a statement on Wednesday, UPS said it was recently notified by law enforcement officials about a “broad-based malware intrusion” of its systems.
A subsequent investigation by an IT security firm showed that attackers had installed previously unknown malware on systems in more than four-dozen stores to gain access to cardholder data. The affected stores represent about 1% of the 4,470 UPS Store locations around the country.
The intrusion may have exposed data on transactions conducted at the stores between Jan. 20 and Aug. 11, 2014. “For most locations, the period of exposure to this malware began after March 26, 2014,” UPS said in a statement.
In addition to payment card information, the hackers also appear to have gained access to customer names, as well as postal and email addresses.
Each of the affected locations is individually owned and runs private networks that are not connected to other stores, UPS added. The company provided alist of affected locations.
The breach is the third significant one to be disclosed in the past week. Last Thursday, grocery store chain Supervalu announced it had suffered a malicious intrusion that exposed account data belonging to customers who had shopped at about 180 of the company’s stores in about a dozen states. The breach also affected customers from several other major grocery store chains for which Supervalu provides IT services.
Amazon.com Inc rolled out a $10 credit-card reader and mobile app for brick-and-mortar businesses on Wednesday, marking the latest step by the U.S. online retailer to expand its presence in the physical world.
The move pits Amazon against a slew of rivals, including startup Square, which popularized a payments dongle that allowed small- and mid-sized businesses like food trucks, coffee shops and personal trainers to quickly accept credit and debit cards.
The new point-of-sale system, called Amazon Local Register, would give Amazon crucial data on how U.S. consumers shop offline. More than 90 percent of U.S. retail sales still take place in physical stores, according to U.S. government data.
Amazon hopes to court small businesses in part by charging lower fees than Square and eBay Inc’s PayPal unit. Those who sign up for Amazon’s program before Oct. 31 will be charged 1.75 percent for each card swiped until January 2016.
For those who sign up after October, Amazon will take a 2.5 percent cut of each card swipe, still less than Square’s 2.75 percent flat transaction rate and PayPal’s 2.7 percent.
Amazon.com Inc will offer 3D printing services that allow customers to customize and build earrings, bobble head toys and other items from third-party vendors using a new personalization option on its website.
Most of the more than 200 items available on the company’s new 3D printed products store, which was rolled out on Monday, can be customized using a new feature that allows users to rotate and change the item they are viewing.
Before it is printed by one of Amazon’s sellers, users can customize a product like as a bobble head figure by changing its skin and eye color, hair style and outfit, Amazon said.
“The customization is something we’re keenly interested in,” said Petra Schindler-Carter, director for Amazon marketplace sales, speaking in an interview. “We’ll always look for new applications for that.”
Amazon, which has more than 240 million users, has expanded its marketplaces division to include new areas such as fine art and wine. It is part of Amazon’s larger investment into new areas like mobile services and original content that led to its larger-than-expected second-quarter loss last week.
The new printing option taps into a broader “Maker movement” among tech entrepreneurs in northern California, and to some extent Europe, that is focused on customizing 3D objects rather than development software or mobile applications.
3D printers have gained in popularity on Amazon Supply, a wholesale site for businesses. That interest led Amazon to offer customers an 3D print option, Schindler-Carter said.
Consumer and business shoppers can pay for products directly via bitcoins or through Coinbase, a third-party payment processing company, Dell said.
Buyers can pay for products through Bitcoin wallets or by scanning a QR code with a smartphone.
The volatile Bitcoin has had its share of controversies and exchange shutdowns as the currency matures. Companies like Overstock.com, Newegg, Expedia and some Amazon storefronts accept Bitcoin as a form of payment. But major retailers like Walmart and eBay have not warmed up to the idea. The value of one bitcoin was around $630 as of Friday, according to multiple cryptocurrency website.
There are some advantages to paying via Bitcoin. The form of currency is accepted around the world, and for Dell, the payment-processing cost is less than with credit cards.
But the form of payment has its quirks.
“Due to the nature of the Bitcoin network, once you initiate a Bitcoin transaction you cannot change or cancel it,” Dell said on a terms and conditions page.
Customers could seek refunds in the case of canceled transactions or product returns.
“For a qualifying return of product paid for in Bitcoin, any refund due will be remitted to the purchaser via check in U.S. Dollars for the full amount of the purchase price paid at the time of the original transaction, less any applicable restocking fees,” Dell said.
High profile cases of hackers seizing sensitive customer data from companies, such as U.S. retailer Target Corp or e-commerce company eBay Inc, have executives checking their insurance policies.
Increasingly, corporate risk managers are seeing insurance against cyber crime as necessary budget spending rather than just nice to have.
The insurance broking arm of Marsh & McLennan Companies estimates the U.S cyber insurance market was worth $1 billion last year in gross written premiums and could reach as much as $2 billion this year. The European market is currently a fraction of that, at around $150 million, but is growing by 50 to 100 percent annually, according to Marsh.
Those numbers represent a sliver of the overall insurance market, which is growing at a far more sluggish rate. Premiums are set to grow only 2.8 percent this year in inflation-adjusted terms, according to Munich Re, the world’s biggest reinsurer.
The European cyber coverage market could get a big boost from draft EU data protection rules in the works that would force companies to disclose breaches of customer data to them.
“Companies have become aware that the risk of being hacked is unavoidable,” said Andreas Schlayer, responsible for cyber risk insurance at Munich Re. “People are now more aware that hackers can attack and do great damage to central infrastructure, for example in the energy sector.”
Insurers, which have more experience handling risks like hurricanes and fires, are now rushing to gain expertise in cyber technology.
“It is a difficult risk to price by traditional insurance methods as there currently is not statistically significant actuarial data available,” said Robert Parisi, head of cyber products at insurance brokers Marsh.
Andrew Braunbergon, research director at U.S. cybersecurity advisory company NSS Labs, said that some energy companies have trouble persuading insurers to provide them with cyber coverage as the industry is vulnerable to hacking attacks that could trigger disasters like an explosion in a worst-case scenario.
Pricing on policies for retailers has climbed in the wake of recent high-profile breaches at Target, Neiman Marcus, and other merchants, he added.
The company rolled out a set of tools for software developers on Wednesday that allows businesses to deduct payments directly from a customer’s PayPal account.
The developer kit is the first big push from Braintree since it was bought by eBay for $800 million last year to help PayPal, eBay’s payments division, expand its presence on mobile devices.
Eliminating the need for mobile shoppers to type in their credit card details on their phones should help boost sales, Braintree Chief Executive Bill Ready said in an interview.
This is especially critical as consumers spend more time on their smartphones, a trend that is forcing developers to design a “fundamentally different computing experience” for the smaller screen, Ready added.
Braintree processes payments for businesses including car service Uber and online home-rental marketplace Airbnb.