Posts filed under “Corporate Management”

Google Checkout

Google_checkout
The initial reports were wrong. The new service is not, as was previously stated, G-Buy or Google Wallet, but Google Checkout.

And the goal seems to be less of creating a direct competitor to PayPal than another way to generate targeted advertising search revenue, and improve the data and specificity of targeted search results. The San Jose Mercury News reports:

"If Google Checkout is successful, the company could reap big rewards.
The transaction data for each person who makes a purchase, combined
with their search history, could lead to advertising that takes into
account their favorite stores and preferred brands. The more targeted
the advertising, the more advertisers are willing to pay."

Since Google will waive the transaction fees for vendors who buy AdWords, the goal may simply be to create more search advertising. If Paypal gets dinged in the process, they are collateral damage.
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Google_650

Google2_650

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Her’s the cost structure: Sellers pay Google 2% of each transaction, plus a 20-cent fee. That’s less than what they would pay MasterCard or Visa, who charge 1.95% plus 30 cents per transaction. PayPal charges a 2.9% plus a 30-cent fee (but Paypal’s fees decrease when merchants sell over $3,000).

Google appears to be subsidizing transactions. The reason is ad sales: For every $1 in fees a company spends on search advertising, they will waive fees on $10 worth of purchases. That is about a 20% rebate on advertising spending.

As we noted previously, this is likely to inure to the benefit of consumers.

BusinessWeek reports

"this battle is bound to benefit consumers and merchants. By providing new and cheaper alternatives to credit cards for buying items online, these and other new online payment services could give buyers more confidence in a wider range of e-commerce sites. And coupled with e-commerce services from eBay, Google, Amazon.com, and others, they’re likely to help smaller merchants who can’t afford a credit-card merchant account to compete with bigger players."

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There is a short video tour of Google Checkout at the demo sit (halfway down the page).

click for video

Gc

Sources:
Google Aims to Speed the Online Checkout Line
SAUL HANSELL
NYTimes, June 29, 2006
http://www.nytimes.com/2006/06/29/technology/29google.html

Google launches Checkout service to compete with PayPal
Elise Ackerman
Mercury News, Wed, Jun. 28, 2006
http://www.mercurynews.com/mld/mercurynews/business/14926295.htm

Google’s eBay Challenge
Robert Hof
Businessweek, JUNE 28, 2006
http://www.businessweek.com/investor/content/jun2006/pi20060628_081708.htm

Category: Corporate Management, Finance, Investing, Retail, Web/Tech

eBay revisited

Category: Corporate Management, Investing, Technical Analysis

Read it here first: The Cost of Sarbanes-Oxley

Category: Corporate Management, Data Analysis, Financial Press, Markets, Politics

Empire of Microsoft

Category: Corporate Management

Dell Makes A Purchase (Whoopee!)

File this one under “you’ve got to be kidding me.” > Some people are all excited that Dell Chairman Michael Dell, (who presumably knows his business better than anyone else), finally bought some shares recently. Specifically, Dell bought $70 million worth of stock at $23.99. Remarkably, this was Michael Dell’s first ever purchase of his…Read More

Category: Corporate Management, Psychology, Trading

Old Stars Don’t Lead New Bulls

Category: Corporate Management, Earnings, Investing, Markets, Psychology, Venture Capital

Microsoft is in crisis?

I frequently discuss Microsoft, and for many many reasons: They are a tech bellwether, a huge part of the S&P and Nasdaq 100 (and a smaller part of the Dow). They have also been a thorn in the side of new technology development and innovation, but now that so much of it has moved to the web, its gotten away from them.

This is a good thing.

One of the commenters said some time ago that I was "irrational in my hatred for Microsoft." That’s hardly the case; Microsoft has put a lot of cash in my pocket, so at worst, I should be grateful to them for the windfall.

However, I am still an objective observer, and I believe that Mister Softee is not what most investors think it is: They are hardly innovators; rather, they copy other people’s work relentlessly, until by default they own the standard. Their products are kludgy, bloated and anti-instinctive; They are hardly the elegant, easy to use software first dreampt up by science fiction writers decades ago.

From an investing standpoint, their fastest growth days are behind
them, yet they are hardly a value stock — yet. (Cody and I have disagreed about this for some time). The leaders of the last bull Market are rarely the leaders of the next. Despite this, Wall Street still loves
them, with 28 of  32 analysts rating them a "Buy" or "Strong Buy." (BRThat was 2 months ago; Its now down to 21 "Buy" or "Strong Buy," 10 "Hold," and 2 "Sell" or "Strong Sell." ) They
are widely owned by active mutual fund managers and closet Indexers.

Many people think of them as this well run money machine; In reality, they are very poorly managed by a group of techno-nerds with very little in the way of management skills. Even their vaunted money making abilities are profoundly misunderstood: Its primarily their monopolies in Operating Systems (Windows) and Productivity Software (Office) that generates the vast majority of their revenue and profits. Their Server software and SQL Database make money, but hardly the big bucks of Windows or Office. MSN is a loser, MSNBC is a dud, their Windows CE is hardly a barn burner — even X-Box has cost them billions more than it is likely to generate in profits over the next 5 years.

Lest you think its just me who thinks this way, consider no less an authority than Robert X. Cringely. He is the author of the best-selling book Accidental Empires (How the Boys of Silicon Valley Make Their Millions, Battle Foreign Competition, and Still Can’t Get a Date). He has starred in several PBS specials, including Triumph of the Nerds:  A history of the PC industry.

After Gates resignation, Cringely wrote this:

Pulp"Microsoft is in crisis, and crises sometimes demand bold action. The company is demoralized, and most assuredly HAS seen its best days in terms of market
dominance. In short, being Microsoft isn’t fun anymore, which probably means that being Bill Gates isn’t fun anymore, either. But that, alone, is not reason enough for Gates to leave. Whether he instigated the change or someone else did, Gates had no choice but to take this action to support the value of his own Microsoft shares.

Let me explain through an illustration. Here’s how Jeff Angus described Microsoft in an earlier age in his brilliant business book, Managing by Baseball:

"When I worked for a few years at Microsoft Corporation in the early ’80s, the company had no decision-making rules whatsoever. Almost none of its managers had management training, and few had even a shred of management aptitude. When it came to what looked like less important decisions, most just guessed. When it came to the more important ones, they typically tried to model their choices on powerful people above them in the hierarchy. Almost nothing operational was written down…The tragedy wasn’t that so many poor decisions got made — as a functional monopoly, Microsoft had the cash flow to insulate itself from the most severe consequences — but that no one cared to track and codify past failures as a way to help managers create guidelines of paths to follow and avoid."

Fine, you say, but that was Microsoft more than 20 years ago. How about today?

Nothing has changed except that the company is 10 times bigger, which means it is 10 times more screwed-up.

Read More

Category: Corporate Management, Investing, Markets, Psychology, Technology

Google vs Microsoft: Part II (NYT’s Version)

Category: Corporate Management, Investing, Technology, Web/Tech

Young FrankenSteve (or, Ballmer goes Beserk)

Category: Corporate Management, Film

Enron Trivia Question:

Category: Corporate Management