Tag: Amazon

UK to tax Amazon, Google

gosborneUK chancellor of the exchequer George Osborne unveiled his autumn statement today and said he would tax multinationals who avoid paying tax.

He told the House of Commons that the government will raise £5 billion over the next five years by taxing profits from banks and companies like Google and Amazon who make money in the UK and then shift it abroad.

He said that some large multinationals including companies in technology “use elaborate structures to avoid paying tax”.

He will introduce a 25 percent tax on such profits. The diverted profits tax might be difficult to collect however.

Earlier this year, Google chairman Eric Schmidt said that if governments griped about companies like his not paying enough tax, they should introduce legislation to change the picture.

However, the situation is complicated by the fact that firms like Google and Starbucks will simply find other ways to avoid paying tax and such changes really require international cooperation.

One financial analyst told TechEye that even if 20 countries agreed to such changes, the companies might simply find country 21.

Apple fudges book cartel rulings

Apple's Jonathan IveThe company which designer Jonathan Ive described a week or two back as built on integrity has finally agreed to cough up $450 million after it conspired with five publishers to hike the prices of e-books.

On Friday, US district judge Denise Cole told Apple it must pay $40 million to as many as 23 million people if it lost a hearing that showed it was liable under antitrust laws. But Apple is pushing for a fresh hearing and if it is unsuccessful it won’t have to pay anything.

And if that happens, the same judge may have to preside over the same case all over again.

Even though Apple agreed to settle the case in June, it can continue with an appeal  after it was found guilty last year  of conspiring to hike e-book prices and unfairly compete against Amazon.

Apple’s appeal is due to be heard in mid-December and if it is successful it might go to a new trial and continue to ramp up the cost of lawyers who have already racked up an estimated $20 million.

Bricks and Mortar turned over by Amazon scam

supreme_court_backs_walmart_over_closedstore.jpeg.size.xxlarge.letterboxBricks and Mortar outfits in the US have been warned against competing against online retailers, after a fraud emerged which cost Walmart thousands.

Walmart had been running a deal, where it promised to match any price found online.

However some customers worked out that the only thing they needed to show Walmart was an Amazon advert.

All they did was register an account which created an official looking Amazon page with a bogus advert on it.

Few Walmart employees appear to have verified the legitimacy of these online deals and many customers were able to buy PS4 gaming systems for $90.

Walmart should have known better. Consumerist found that Sears accidentally listed several Nintendo consoles on its site for $60. Members of Twitter and Reddit communities posted pictures of receipts documenting that Wal-Mart had accepted these fake Amazon listings.

Amazon squeezes Royal Mail profits

Royal Mail CEO Moya GreenRoyal Mail declared profits of £279 million today, a fall of 21 percent compared to the six months to the end of September in 2013.

And the recently privatised firm, which said when it went public that it would concentrate on parcel deliveries, warned that Amazon schemes to deliver its own parcels would likely threaten its future.

Amazon is experimenting with all sorts of ways to cut out services like Royal Mail including whacky experiments using drones down to using taxi cabs to deliver parcels to its customers.

Royal Mail, as part of its privatisation, intends to restructure itself in its financial year 2016, a move which will save over £700 million a year but will also affect jobs.

CEO Moya Green said she was pleased with the company’s overall performance but said “the UK parcels market remains challenging”.

Shares in the PLC fell on the news.

Amazon Web Services has another bite at Oracle

giant-spider02Amazon Web Services is having another crack at kicking Oracle in its relational databases.

Aurora is Amazon’s relational database which it claims is just as capable as proprietary database engines and costs 90 percent less.

Aurora is the latest battle in a long war with Oracle which started with Amazon’s RedShift a few years ago.

The database will compete with MySQL, SQL Server, PostgreSQL, and yes Oracle on the company’s Relational Database Service (RDS) lineup. And it is compatible with MySQL, Amazon said.

Amazon has worked out that people have had a gutsful of Oracle’s cost structure and refusal to budge from older licensing models. The outfit has mostly saved itself because no one wants to dump their database.

To try to encourage the Oracle, Amazon has released a new AWS CodeDeploy, code-named Apollo, which the company said will enable rolling upgrades and ease deployments to multiple instances. It is available now and will work with customers’ existing toolsets.

Luxembourg Amazon deal under EU scrutiny

luxembourg_villeEU watchdogs are investigating how Amazon avoided paying billions in tax using a dodgy deal with the Luxembourg government.

Leaked tax documents from accounting firm PwC in Luxembourg show how Amazon sidesteps the 30 percent tax rates so they can price rivals out of the market.

The Luxembourg documents, obtained in a review led by the International Consortium of Investigative Journalists, contain some of the first hard numbers and details on how Amazon pays virtually no tax for its non-US earnings.

The deal was hatched in secret in 2003 and was part of a cunning plan by Amazon after it was investigated by French tax authorities and the US Internal Revenue Service. In 2011, Amazon reported US tax authorities were demanding $1.5 billion in federal tax and penalties covering 2005 to 2011 in connection with the royalties payments. In 2012 the French government slapped a $252 million tax bill on Amazon. The company is appealing both matters in court.

So to fix this problem, Amazon hatched up a deal with teeny weeny countryLuxembourg. Almost all Amazon’s income outside the US ends up in a Luxembourg company, Amazon EU Sàrl, which was the beneficiary last year when Amazon notched up £4.3 billion ($7.9 billion) of sales in the UK and paid only £4.2 million in income tax.

A secret appendix to an annual report filed with the Luxembourg government shows the missing cash went in two related-party deals. Amazon EU paid €379 million in “service fee expense” and €519 million in royalties to Amazon Europe Holding Technologies.

So, in other words, Amazon Europe paid €105 million to Amazon Technologies in Nevada to license the rights to Amazon’s intellectual property – the patents and software for the websites, including that button that buys a book with one click.

Amazon Europe onsold the rights to use this intellectual property to Amazon EU for €519 million – five times what it had paid the US Company. ­Amazon Europe made an instant profit of €414 million, which would have been taxable, except that Amazon Europe is a limited partnership and does not pay tax in Luxembourg.

Amazon EU ended up paying 0.5 per cent tax. Amazon Europe’s money ended up tax-free in Gibraltar.

Luxembourg is not exactly being forthcoming about providing information about the deal either. In fact, the European Commission complained that Luxembourg has provided only limited information about the Amazon deal.

This is causing problems because there is nearly €1.2 billion of cash generated by Amazon which is missing. Some think the cash might have been “invested” in Amazon Data Services Ireland. However, either way it is proving very difficult to find.

Amazon might deliver by cab

London Cab, Wikimedia CommonsAfter contemplating the idea of drones dropping your groceries in your back garden, Amazon has apparently come up with a cunning plan to deliver goods using taxis.

That’s according to the Wall Street Journal, which claims that Amazon has already tested delivery of goods in both LA and San Francisco by using a mobile app called Flywheel.

The plan is to counter criticism from people that packages don’t arrive when expected. Last Christmas, it apparently had a problem with the US Post Office as well as courier companies FedEx and UPS.

While Amazon appears to have limited the trials to two US cities so far, we wonder how well it would work in congested cities like London or Oxford.

Sometimes you’d be faster walking to your destination rather than hailing a pricey black cab in Oxford Street or Victoria.

IBM claims first for intelligent cloud security

clouds3Big Blue claimed it is the first company to build an intelligent security profile that protects data, applications and people in the cloud.

The offerings it announced use what IBM described as advanced analytics to react to threats across enterprise, public, private and mobile clouds  – so called hybrid clouds.

IBM said that while the cloud is being rapidly adopted worldwide, attackers are more sophisticated and more able to hide their activities.  Indeed, IBM claims that three quarters of security breaches take days, weeks or months to be discovered.

Its managed security services platform is intended to protect IBM customers as well as customers of firms like Amazon Web Services and Salesforce.

It said that its intelligent threat protection monitors the cloud environment, analysing billions of security events and including correlation and external data feeds.

IBM estimates that nearly half of large enterprises will use hybrid clouds by the end of 2017 and claims that it is the largest hybrid cloud vendor.

Google cuts out the server middlemen

HP-MicroServerA report said that Taiwanese original design manufacturer (ODM) Quanta will supply search engine giant Google with its servers in 2015.

Google has long abandoned the habit of using “brand name” servers from the likes of Dell, HP or IBM/Lenovo.

The news, reported in Digitimes, confirms a recent survey saying that the ODMs, which often build machines that are then subsequently branded, are taking market share from the brand names.

It’s not just Google that is following this path.  Amazon, Facebook and Microsoft also buy their servers direct.  Quanta has benefited more from these changes in buying patterns because it has been quicker to realise the money involved than rivals such as Taiwanese company Inventec.

Until comparatively recently, Quanta’s entire business was building notebook machines, subsequently branded by others.  But the bottom has somewhat fallen out of the notebook business with the rise of tablets and smartphones.

Amazon burnt by Fire

FireOnTheAmazonPosterAmazon has admitted that it has lost a pile of dosh on its Fire smartphone.

Chief Financial Officer Tom Szkutak confessed to investors that the company took a $170 million charge related to the write-down of costs associated with its smartphone.

The smartphone was supposed to be one branch of Amazon’s expanding family tree of devices, which has grown from a single e-reader to tablets, a media-streaming box and the smartphone.

The company last week  reported a third-quarter loss that significantly widened over a year ago and missed Wall Street expectations, while warning that its fourth-quarter revenue would also disappoint. The Fire Phone charge was a large component of the $437 million lost in the period.

But the Fire Phone, its first foray into the smartphone business, was supposed to do to Amazon what its tablet had done.  Make piles of dosh by forcing people to buy its content.  The phone itself was not bad either with some technology which should have helped it elbow its way into the market. It could display 3D images and graphics and scan certain products and media for additional information and purchasing options.

Where Amazon went wrong was that it did not subsidise the phone in the same way that it had done for its Fire Tablet. Even with an exclusive partnership with wireless carrier AT&T in the US. The phone has failed to make a dent in the market, and after two months, went from $200 to 99 cents with a two-year contract. In the UK it’s free on various contracts from the O2 network.

The exclusive deal with AT&T in the US did not help either. Most high-profile smartphones opt to go with multiple carriers, but Amazon tied itself to AT&T in exchange for more prominent promotional positioning in the carrier’s shops.  However that did not explain why it also tanked in the UK.

Amazon is an illusion claims mystic Ballmer

SteveBallmerMouthAgapeIt seems that since he has left Microsoft, the shy and retiring former Vole Steve “there is a kind of hush” Ballmer has been taking some time out to consider the nature of reality.

Now when Buddha hit the same level in his meditations, he concluded that death and suffering was all an illusion, but Ballmer contemplated his navel, he concluded that the online retailer Amazon is not real.

Sharing his spiritual realisations on the Charlie Rose Show, Ballmer said that he didn’t  know what to say about Amazon before explaining why he’s wary of the company.

He said that the company made no money and in his world, you’re not a real business until you make some money.

“I have a hard time with businesses that don’t make money at some point.”

Amazon came up short of analyst expectations and on Thursday posted a $437 million loss for the third quarter, or a loss of 95 cents a share. That followed a net loss of $126 million during the second quarter. Its stock has fallen eight percent today as a result.

Ballmer said it’s OK for a company not to make money for a few years, but he’s perplexed with Amazon, which had yet to post a profit in two decades.

“If you are worth $150 billion, eventually somebody thinks you’re going to make $15 billion pre tax,” Ballmer said. “They make about zero, and there’s a big gap between zero and 15.”

Ballmer said that every business is expected to have is the capability to make money, and it requires  discipline and a certain kind of mindset.

“As a businessman, if you ask me what I’m proud of, I’m proud of the fact that I made $250 billion under my watch as CEO.”

So St Steve still has a problem working out that materiality is also an illusion.

Algorithms gouge online buyers

smartphone-shoppingA study by a team of researchers at the Northeastern University have discovered that online shops target people based on their profiles and charge some more than others for the same products.

The team said that people regularly receive personalised content, such as specific offers from Amazon.  That, the study shows, can be to a person’s advantage but e-commerce sites manipulate search results and customise prices without anyone knowing.

The researchers looked at 16 popular e-commerce sites, including 10 general shops and six hotel and car rental sites,to measure price discrimination and price steering.

“We have found numerous instances of price steering and discrimination on a variety of top e-commerce site,” they said in a report.

Some sites altered prices by hundreds of dollars and travel sites showed inconsistencies in a higher percentage of cases.

They said Expedia and hotels,com “steered a subset of users towards more expensive hotels”.

The team said that price differences were significant in some of the cases. Amazon and Ebay were excluded from the study and so too were firms like Apple.

Although the researchers said they contacted the sites they surveyed, they did not say how or if the companies replied.

Amazon invests in German datacentres

amazonsMany people might think that Amazon is where you buy your books, your Hue lights and your CDs but behind the scenes it is  becoming a major player in the datacentre business.

And now, according to the Financial Times, Amazon will build several datacentres in Frankfurt in a bid to allay customers’ fears that their data is housed in places where security and privacy are not as high a priority as in Germany.

The FT reports that the EU has much stricter data protection laws than other territories.  And, of the EU countries, Germany has the best privacy control.

A senior VP of Amazon Web Services told the FT that many of its German customers would prefer to have their data held locally. Although a figure hasn’t been placed on the German infrastructure investment, it’s believed that such a project will require a multimillion dollar investment.

US providers like Google, Rackspace and others compete with Amazon but are based in the USA.  Amazon is believed to generate revenues from its cloud business amounting to over $5 billion during 2014.

Google plays Amazon red herring

red herringAs Google continues to be investigated by the European Union, chairman Eric Schmidt has decided to deflect criticism by saying that Amazon is its biggest search rival.

In a speech in Berlin, Schmidt – who has repeatedly denied that Google is a monopolistic player – he also took time to diss rivals Bing and Yahoo, saying they don’t matter at all.

According to the BBC, Schmidt said that people didn’t see Amazon as a search engine but most people go there when they want to buy something, rather than Google.

How Schmidt thinks this kind of argument will have any weight with the European Union is hard to fathom.

He said: “Amazon is answering users’ questions and searches, just as we are.”

Google isn’t the be and end of it all, added Schmidt. In a note of paranoia he suggested that somewhere will be new technology that will topple it from its premier position.

Tablet market is all shook up

ipad3Apple and Samsung are going to have to fight hard to keep their place as leaders of the tablet pack.

Because, according to market intelligence firm ABI Research, other vendors including Asus, Lenovo and Amazon are fighting hard for third place and creeping up on the leaders.

These emerging vendors are set to experience a compound annual growth rate (CAGR) of 22.8 percent between 2014 and 2019.  Lenovo, for example will ship 21 million tablets by 2019.

Samsung saw a 35 percent decline in growth between Q1 2014 and the second quarter, while Apple saw a 19 percent decline.

In the first quarter, Apple and Samsung had a hefty 72 percent of the marketplace but their combined market share dropped to 66 percent and that’s the way things are headed.

In fact, ABI Research thinks that advanced and mature markets are experiencing a stall in growth, partly because tablets don’t need replacing every few years like notebook PCs.