Earnings season is in full swing and while there were a few pieces of “serious” news that I found interesting, it was a story of a virtual murder from Japan that took the cake.
Amazon has added a bit of fuel to the market’s fire by lowering its revenue estimates for the fourth quarter.
The company, which does much of its sales in the fourth quarter thanks to the holidays, believes it will generate somewhere between $6 and $7bn in sales instead of the $7.2bn it had forecast previously.
Sanford Bernstein analyst Jeffrey Lindsay observes that Amazon’s lowered expectations mean trouble for etailers:
“This is further confirmation that the economic downturn is much more pervasive than was earlier thought.
“Online retailers were thought to be immune to it but this is an indication that that is far from true. They are definitely signaling much worse returns in the fourth quarter.”
Of course, given the fact that e-commerce has been the sole bright spot for many retailers with brick and mortar operations, one might predict that brick and mortar retailers without a strong online presence are going to really be hurting or etailers will be facing a bit of pain of their own soon enough.
It was the best of times and it was the worst of times.
While iPhone sales boosted Apple’s fourth quarter earnings 26% due to strong iPhone sales, AT&T, the mobile carrier with exclusive rights to the iPhone in the US, missed its forecasts as the subsidy the company provides for iPhone ate into its margins.
According to Scott Moritz of Fortune, AT&T spends a whopping $375 per iPhone customer to keep the cost of the iPhone as low as $199. These costs alone shed a dime per AT&T share in the fourth quarter.
The question, of course, is whether AT&T’s up-front investment will pay off.
The company sold 2.4mn iPhones last quarter, “helping to attract 1.7 million net new post-paid subscribers.”
As Moritz notes, that’s an impressive feat in this economic environment, especially when one considers that iPhone customers spend more money each month than non-iPhone subscribers.
But will these customers ever make money for AT&T?
Right now, AT&T is losing money on each sale and I wonder whether the eventual toll the relatively low-cost iPhone data plans could take on AT&T’s network might pose another cost problem.
Time will tell. In the meantime, AT&T shareholders who are wondering where they’re money is going need look no further than Apple.
Troubled American automaker General Motors has bought into the notion that it’s all about the conversation.
Believing that it can reach a large audience effectively online and reluctant to spend big money on prominent TV spots given its financial woes, the once-dominant automaker is hoping that user engagement can help it make a turnaround.
According to GM’s Betsy Lazar, executive director of advertising and media operations, online advertising “is very, very efficient relative to television.”
A major part of GM’s strategy revolves around targeting younger consumers, making the internet an ideal platform, and GM apparently sees another advantage.
As Bernard Simon of the Financial Times, notes, “youngsters still not old enough to drive” are “unaware of GM’s past mistakes.”
Thus, GM thinks it has a chance to create a new image for itself.
Yet I can’t help but think that GM’s objective to “engage in a conversation” with consumers online might just be another sign that the company doesn’t “get it.”
In my opinion, GM’s attempt to rise from the ashes and to build a new image with young auto buyers will be dependent on it building great cars. Not much else matters.
If it can do that and utilize the internet to more effectively and cost-efficiently reach consumers, great. But if it thinks that “conversation” and “engagement” in the absence of a total overhaul of its product line and how it does business will do anything, it’s probably going to be find that its corporate lips are flapping in the wind.
It appears that the individual behind the fake Steve Jobs heart attack story on CNN’s iReport.com citizen journalism website has been located.
Bloomberg reports that it has a “reliable” source who indicates that the person suspected of posting the fake report is an 18 year-old teenager who did not appear to take advantage of the temporary $4.8bn drop in Apple’s valuation as the fake report circulated.
It’s unclear at this point if the teen will face any charges.
Of course, I find it somewhat amusing that Bloomberg’s report is based on an unnamed source. Fool us twice? Nah. Could never happen, right?
A woman in Japan was arrested after “she killed her online husband’s digital persona.”
That’s right – after learning that her virtual husband had “divorced” her without rhyme or reason, the woman hacked into his account in the popular online game “Maple Story” and deleted his avatar.
If this story is already absurd to you, it gets even more absurd:
“The woman was arrested Wednesday and was taken across the country, traveling 620 miles from her home in southern Miyazaki to be detained in Sappporo, where the man lives, the official said.”
While I’m all for the enforcement of laws that protect individuals from crimes online (hacking, identity theft, etc.), I have to wonder about this case.
Hopeful the couple will work things out and come to a virtual divorce settlement that both can live with.
If there’s any lesson to be learned, however, it’s this – before you get married online, back your avatars and profiles up. Consider it a digital prenup.