Tag Archives: stock

Amazon, The Data Company, Not The Retailer

Last week I blogged about $GOOG.  This week, we’ll talk about $AMZN.

I find myself using Amazon much more than I used to.  I use the desktop version and the iPhone app though most of my usage comes from the iPhone app.

I’ve tasked myself to think about why I use Amazon.

Price was my first reaction.

Buying online for consumers used to be about price – mainly because you did not have to pay sales tax.  Amazon is collecting sales tax, but from just 8 states but three of those states are the most populated states in the USA including California, New York, and Texas.  Based on a July 2012 estimate, they collect sales tax on 35.45% of the country.  New Jersey and Virginia are expected to join the Sales Tax list in 2013 which would push the total coverage of the USA to 41% of the US population.

So eventually, buying online will not be about saving on sales tax.  It’s about something much bigger.  Convenience.  Selection.  And much more.

Here’s what I basically netted out to:

Amazon isn’t necessarily about the lowest price, but the most convenient shopping (1-click).

The 1-click shopping experience on Amazon is amazing.  It’s dead simple.  I cannot tell you how many times I’ve been sitting with someone who recommends a book and I pull out my phone and within fifteen seconds, I order the book and its delivered via Amazon Prime (48 hours).  Their search works, their catalog of product is deep and broad, and the checkout experience is headache-less.

I wish every single site and store deployed a similar checkout mechanisms.

At the agency, we’ve partnered with Amazon in an advertising relationship and are working with them on a client business or two.  I never thought I’d be working with a retailer in this capacity, but I am.

So what is Amazon?

To me, in my opinion, is a data company that uses intent and e-commerce to build its dataset.  Sound similar to Google?  Yep.  Only difference is that Amazon is a bit more diverse with its data set as it has the actual sale of product.  Keep that in mind.

Oh, and Amazon also has an entire cloud hosting division.  How much data resides and passes thru their cloud?

 

 

Is the Market (and Tech Scene) Rebounding?

Recent headlines (within last 10 days):

I’m not going to pretend I’m a Wall Street analyst or an amateur Stocktwits guru, but where there is smoke, there is fire.  While I can’t prove that the market is rebounding overall, this is solid news and we are moving in the right direction.

If this continues, the M&A market will heat up and some startups and later stage companies that we’ve all come to know will be on the receiving end of some checks (and potentially some stock swaps).

Areas that should see some M&A activity:  location based mobile companies, buy-side advertising optimizers, mobile ad networks, mobile ad optimizers, and niche focused content sites.

Another sign of a potential recovery is the recent influx of headhunters, investors, company management all reaching out to find CMO’s and VPs of Marketing for their organizations and investments.  Company positioning and value proposition is critical during a warm/hot M&A market.

Genius Move by Facebook

Eric Eldon over at VentureBeat writes:

Facebook has an internal valuation of $4 billion, as we’ve previously reported. It will begin letting current employees sell 20 percent of their fully vested stock options at that valuation, starting this fall, I’ve learned from well-connected sources.

This is genius, from a talent management perspective.  Early employees can reap the benefit of their hard work and will potentially help to lower the attrition rate.  A nice reward to employees.

From one founder to another:  holding out for the golden egg may not be the best idea – if you have the chance to dollar cost average, go for it.

Media Arbitrage: Trading Stocks vs. Media

Arbitrage is making its way into the advertising industry. According to Dictionary.com, arbitrage can be defined as the simultaneous purchase and sale of the same securities, commodities, or foreign exchange in different markets to profit from unequal prices.

Making headlines a few weeks ago was Wenda Harris Millard’s speech about trading media like pork bellies. She states that… “We must educate one and all about the value our digital offerings provide marketers and not trade our advertising space like pork bellies.”

Today, I uncovered an article in Advertising Age about MindShare’s restructuring into four groups, one of the groups entitled The Exchange is accountable for arbitragueing inventory.

An important aspect of the Exchange is that MindShare will be getting into arbitrage — meaning it will be both buying and selling media. Arbitrage is an important play of MindShare’s parent company, Group M, which has invested in Invidi, a company developing addressable TV ad technology. Though specific plans are still unclear, Group M will likely use the technology to buy chunks of TV inventory, make it addressable and resell it to marketers. MindShare will seek out similar opportunities where it actually owns media space it can sell to marketers.

For the past year, I’ve seen a few “exchange” based startups emerging into the advertising world. My friends at MediaMath are one of those folks. For those who aren’t familiar with exchanges, please reference this reference guide. The ADSDAQ trading desk was launched just weeks ago and they already have 6 agencies using it. It sounds like agencies are starting to move beyond just buying media…

This is where my issue lies. [to reiterate, these are my thoughts, not those of my employer] How are agencies structured today to handle a trading desk? Now that Bear Sterns is being absorbed, does this mean I have to go and recruit traders? Does the media buyer become a trader (buy and sell)? How does the current agency model account for this? That’s what I’m trying to figure out. Also, are agencies buying and selling media utilizing their clients money? How does that work? If I know that ClientX gives me $5,000,000 to buy digital media, and I happen to arbitrage some media and turn a $1,000,000 profit, does that belong to ClientX or my agency? Just a few questions that I’m really interested in figuring out… who wants to help?

Business (Game) Idea: Social Stock Market

Maybe I’m listening to the likes of Howard Lindzon, Pip Coburn too much or Sherri is rubbing off on me (her career), but I’ve been watching the equities market much more in-depth lately.  Am I ready to become a trader?  No.  Would I ever want to be?  Probably not.  However, I think I have a neat idea for a game/business that I would love to see done.

The game would be simply titled:  Short or Long.  Much like Hot or Not, [where you are shown an image and you’re told to rate it 1-10], here, you would see the financial performance of a company (Google Finance snapshot), and would either click “Short” or “Long.”

After you click your answer (Short or Long), you would see aggregate information for each particular company, and if the companies name were withheld (just showing financial performance), it would show the actual company.

If you allow users to register accounts, you can chart their performance and benchmark them against their peers.  If you have a certain peer group (a high school class studying the stock market, your office, your buddies, etc), you can compete against each other.  If you really wanted to get tricky, you can short/long over time and specify a date.  Maybe even throw options into this (my uncle Bob has been showing me this tricky world) mix.

Revenue?  Oh yes, it’s a business.  Charge $10 for 100 trades ($0.10/trade) or more.  By doing this, it disables spammers to hype stocks as it becomes costly to do so.  I would love to see some sort of virtual goods model mixed into this as well, though I need to put some more thought into this.

Just my two cents – I like the idea and it’s less than half baked at this point, but would love to hear feedback.

Compensated Fairly?

Brad Feld put a fantastic post online about typical startup compensation over at his blog, Ask The VC.

Very simpley, he gives the following helpful breakouts:

Title

Cash Comp

Cash Median

Bonus

% Co Equity

% Co. Median

Here is a tidbit from his posting that I would agree with:  One thing that seems fairly consistent:  companies with less rounds of funding have lower paid executives and founders make less cash, but have more equity than non-founders.

You can read his posting here.