p27_Layout 1 - Kuwait Times

Why investors are applauding Amazon earnings
NEW YORK: Amazon.com Inc.’s fourthquarter earnings roundly beat analyst
expectations, sending the Seattle ecommerce giant’s stock soaring 11 percent in premarket trading Friday.
Here’s a closer look at what investors
applauded and hope continues.
Operating expenses rose 15 percent
to $28.74 billion but that was less than
some analysts had expected Amazon
would spend. I nvestors have long
wanted Amazon to show some
restraint as it invests in its business,
and this metric seemed to be a sign
that Amazon is willing to do that.
Wedbush Securities analyst Michael
Pachter said the lower-than-expected
costs were related to flat fulfillment
expenses - what the company spends
on its distribution centers and deliveries - during the holiday season even
though Amazon shipped 100 million
more free items. The company also
spent less on marketing expenses
since the launch of its new hardware
like Fire TV and the Fire Smartphone
are behind it.
“They’re getting far more efficient
at deliver y,” said Pachter. “ They ’re
spending like slightly tipsy sailors
rather than drunken sailors.”
Prime membership grew 53 percent
in 2015. Two - day shipping costs
Amazon a pretty penny but membership means more revenue from customers in the long run. Pachter estimates there are about 35 million Prime
members worldwide. And he pointed
out the company is making untraditional efforts to get more members.
For example, it cut the price of its
Prime membership to $72 one
Saturday in January and let non-Prime
members stream its Golden Globe winning series “ Transparent ” starring
Jeffrey Tambor.
“Little promotions like that are
going to drive prime membership and
they’ll continue to really promote it,”
Pachter said.
Some caution that one quarter of
disciplined spending does not a trend
make. In a call with investors, Piper
Jaffray analyst Gene Munster pointed
out that over the past two years it has
been a “little bit of a roller coaster” for
Amazon’s gross margin, a key metric
that shows how big a percentage of
revenue is spent on investing back
into the company.
“There’ve been points of optimism
followed by points of frustration,” he
said and asked the company how they
plan to “smooth out some of this roller
coaster mentality.”
CFO Tom Szkutak acknowledged
that Amazon has been in a “heavy
investment cycle.” He said the company is being “selective” about its investment opportunities but didn’t give any
details, saying it is still finalizing
spending plans for 2015. “The question
is, is this a one-time hiccup or are they
going to repeat it,” Wedbush’s Pachter
said. “If I see this for two, three or four
quarters I will believe it.” — AP
New rules may answer
question of whose
Internet it is
WASHINGTON: Whose Internet is it anyway?
Tom Wheeler, chairman of the Federal
Communications Commission, says he’s keeping that question in mind as he pitches the
biggest regulatory shake-up to the telecommunications industry since 1996, when people still
used noisy modems and referred to the “information superhighway” as a fun way to buy
books or check the weather.
Wheeler has not publicly released his plan
yet, and might not for a few weeks. But he has
suggested that Internet service has become as
critical to people in the United States as water,
electricity or phone service and should be regulated like any other public utility.
Wheeler told reporters this past week that
he wants “yardsticks in place to determine what
is in the best interest of consumers as opposed
to what is in the best interest of the gatekeepers.”
That has the industry sounding the alarms,
warning consumers of an inevitable $72 annual
tax increase on each U.S. wireless account. But
advocates of the approach say that is not likely
to happen and that your Internet experience
probably will carry on as usual.
A look at what “net neutrality” means and
what is likely to happen:
Net neutrality is the idea that Internet
providers should not move some content faster
than others or enter into paid agreements with
companies such as Netflix to prioritize their
Broadband providers have questioned the
fairness of this approach. They have invested
heavily in a sophisticated infrastructure and
question whether the government should be
telling them how to run their networks and
package services.
But what if the major cable companies that
provide much of the nation’s broadband had
free rein to load some files faster than others? It
is easy to imagine scenarios where these
providers might favor content produced by
their affiliates or start charging “tolls” to move
data. Consumers naturally would gravitate
toward faster sites and services that pay those
fees, while smaller startups or nonprofits get
shut out.
The FCC had used the 1996 Telecommunications Act, which was intended to encourage
competition in the telephone and cable industry, to enforce “open Internet” rules, until recently, when a federal appeals court knocked down
that approach.
President Barack Obama and consumer
advocates say a better tack would be to apply
Title II of the 1934 Communications Act. That
law, written with radio, telegraph and phone
service in mind, prohibits companies from
charging unreasonable rates or threatening
access to services that are critical to society.
Industry likens that approach to cracking a nut
with a sledgehammer.
Wheeler says he will circulate his proposal
among the other FCC commissioners before
Thursday. He has suggested it probably will
apply Title II regulation to all Internet service,
including wireless, but with some caveats.
Industry experts expect that Wheeler will say
many rules should not apply to broadband,
invoking what’s called “forbearance.”
The commissioners will vote Feb. 26.
Wheeler is expected to have the support of the
other two Democratic commissioners. The two
Republican commissioners have made clear
that they do not support applying Title II.
Next stop will be the courts. Industry lobbyists and FCC officials say there’s no doubt one of
the big providers will sue and probably ask the
court to suspend enforcement of the new regulation pending appeal. It’s possible the issue
won’t be resolved for several more years, even
well into the next president’s first term.
Lawmakers could try to resolve the uncertainty, but Congress rarely is that pragmatic.
Lawmakers tend to take on issues that fire
up their base or bring their states money, and
an in-the-weeds compromise on telecommunications law would be a lot of work with little
immediate payoff.
So far, Republicans have pitched an idea that
would enforce basic open Internet rules but
could strip the FCC of its ability to help local
municipalities build their own broadband. It’s a
nonstarter for Obama and congressional
Democrats who say poor and rural areas have
been left behind in the deployment of highspeed Internet.
Assuming Wheeler’s proposal satisfies consumer advocacy groups, Democrats would have
little incentive to revisit the issue. While
Republicans have the votes to ram though their
own anti-regulation legislation without
Democratic support, Obama would veto it.
Most Internet providers, except Sprint, have
warned the legal uncertainty will chill future
investments. FCC officials point to a recent wireless spectrum auction that has attracted some
$44 billion as proof that the telecommunications
industry is thriving even amid the current uncertainty.
As for taxes, the Progressive Policy Institute
estimated that treating the Internet like phone
service would trigger taxes and fees up to $15 billion a year, including $67 for each wired service
and $72 for wireless in state and local taxes.
But that report, widely quoted by industry
lobbyists, did not take into account the Internet
Tax Freedom Act, which prohibits state and local
governments from imposing new taxes on
Internet access, or the FCC’s ability to shield consumers against some state and local taxes by
claiming the Internet is an “interstate” service. - AP
Lincoln, Google integrate to
offer seamless App experience
DEARBORN: The Lincoln Motor Company,
through the free MyLincoln Mobile app, is
the first automotive brand to launch an
available seamless integration with Now
cards in the Google app, offering a new
notification opportunity for Android smartphone users to remotely start their vehicle.
The Lincoln Motor Company, through its
MyLincoln Mobile app, is the first automotive brand to launch an available seamless
integration with Google Now, offering a
new notification opportunity for Android
smartphone users to remotely start their
When connected via the embedded
modem available on the 2015 Lincoln MKC
and MKZ and coming to the 2016 Lincoln
MKX, the MyLincoln Mobile app gives owners the ability to start, lock, unlock and
locate their vehicle, as well as schedule
remote starts.
Remote starts can be programmed for
specific times and days of the week. If the
owner is a user of the Google Now service,
the seamless integration with MyLincoln
Mobile delivers a Now card (in the Google
app) suggesting a remote start because the
owner’s calendar indicates a need to depart.
If the remote start option is selected,
the vehicle is then warmed up or cooled off
during the remote start based on the invehicle temperature settings.
“Delivering unique experiences for the
luxury client throughout ownership is fundamental to Lincoln,” said Matt VanDyke,
Director, Global Lincoln. “By innovating
with leading tech companies, we have an
opportunity to personalize the ongoing
interaction between the customer and the
Both the MyLincoln Mobile connectivity
and Google services are opt-in features.
Notifications can be turned off, if desired.
Now cards in the Google app predictively aid users who access Google and are
based on past and preferred searches as
well as the user’s calendar, offering information on topics such as weather, traffic
routes and sports scores.— AP
HONG KONG: Executive Chairman of Alibaba Group Jack Ma, center, chats with young people after his speech on “Transforming Dreams into
Successful Business” in Hong Kong yesterday. — AP
Alibaba promises more
action against fake goods
BEIJING: E-commerce giant Alibaba pledged
Friday to do more to fight online sales of counterfeit goods, quickly settling a public dispute
with a Chinese regulator after the value of its
US-traded shares plunged.
Alibaba founder Jack Ma and the director of
the Cabinet’s State Administration of Industry
and Commerce met and pledged to cooperate
more closely to combat sales of fakes, the
agency said in a statement.
A report Wednesday by the SAIC accused
Alibaba of lax oversight and allowing sales of
counterfeit goods on its popular Taobao ecommerce platform. Alibaba said it was not to
blame and, in a break with the usual deferential tone of Chinese companies toward regulators, took the unusual step of publicly accusing the agency and one of its officials of misconduct and bias.
But the company faced pressure to end the
conflict after the news caused its US-traded
shares to fall. They tumbled further Thursday
after its latest quarterly revenue disappointed
investors. The two-day decline knocked $38
billion off the Alibaba’s $264 billion market
Alibaba is one of China’s biggest corporate
names and a star of a fast-growing Internet
industry communist leaders are eager to
develop. But it has little leverage against the
powerful SAIC, which has stepped up antimonopoly and other enforcement against
Chinese and foreign companies.
In Friday’s statement, SAIC director Zhang
Mao affirmed the importance of e-commerce
in generating jobs and economic activity. He
said, though, that it “still has problems” and
companies need to “strengthen self-discipline.”
Alibaba’s Ma was cited as promising to
spend more to spot counterfeit goods and to
work more closely with law enforcement.
“The two sides will strengthen communication to jointly explore management of online
markets and build a new pattern of governance,” said the statement. “Regulators will
further strengthen Internet market supervision.”
The SAIC’s report was the result of a meeting in July between the agency and Alibaba
managers but said it was withheld until now
to avoid disrupting progress toward the company ’s US stock market debut last
That prompted suggestions Alibaba
should have told investors. But its vice chairman, Joe Tsai, said Thursday it was one of
many regular meetings rather than a formal
investigation. In midday US trading on Friday,
shares of Alibaba Group Holding Ltd. stabilized, rising $1.17 to $90.98. — AP
Nickelodeon to offer Internet subscription
NEW YORK: SpongeBob fans rejoice:
Nickelodeon is the latest cable channel to plan
a stand-alone Internet offering. What’s not yet
known is whether this offering will be the same
channel as what cable and satellite TV subscribers now get. It’s possible the service will
have just supplemental content or archives of
past shows when it launches in March. That
would make it similar to a $4-a-month online
offering for “Sesame Street.”
Nickelodeon owner Viacom Inc. will announce
details, including the price and the name of the
service, next month. Viacom CEO Philippe
Dauman said the new service “will target the
fast-growing mobile market (and) will be very
attractive for parents and children.”
The company announced the service
Thursday during a conference call to discuss the
company’s quarterly earnings report. HBO and
Showtime are among the other channels planning stand-alone Internet offerings as more
people ditch their cable or satellite TV service.
CBS already has a $6-a-month service that
includes live television for those who live in 14
markets with CBS-owned stations. Major sports
leagues also offer live games online, though
often with blackouts of hometown teams.
Meanwhile, Dish Network Corp. and Sony
Corp. will soon launch Internet-only packages
of television channels that used to require a
cable or satellite subscription.
The Dish offering, called Sling TV, will start at
$20 a month and have channels from The Walt
Disney Co., Scripps Networks Interactive Inc.
and Time Warner Inc.’s Turner. The channels
include ESPN and CNN.
Sony’s PlayStation Vue will have unspecified
channels from Viacom, Scripps, Discovery
Communications Inc., CBS Corp., 21st Century
Fox Inc. and Comcast Corp.’s NBCUniversal. Sony
hasn’t announced the price for its service,
which will initially be limited to owners of
PlayStation game consoles.
These offerings make it easier for households to drop their traditional pay-TV service
and piece together their own package of video
Households that do this won’t necessarily
save money, though: The price for Internet
access will likely go up when separated from a
bundle, and these subscriptions add up in cost.
But it’s a good option for those who watch
few channels live and don’t mind waiting for
shows to appear on Netflix and other streaming
services. It also allows households to downgrade to a cheaper cable or satellite TV package
and supplement that with specific channels
they want. — AP
NEW YORK: In this Jan. 17, 2012 file photo, attendees at the National Retail Federation listen to
a discussion about Google Wallet, in New York. Google has gotten into the habit of missing
analysts’ earnings targets, frustrating investors who believe the online search leader would be
more profitable it wasn’t pouring so much money into far-flung projects such as Internet-connected eyewear and driverless cars. — AP