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Amazon’s big stock slide shows strategy’s shaky

Written By Unknown on Sabtu, 26 Juli 2014 | 23.54

Time for Amazon to hit the Mayday Button.

Investors are beginning to wake up and realize that maybe this whole thing about putting long-term profits over short-term profits isn't as enchanting and magical as CEO Jeff Bezos once made it seem.

Amazon's stock plummeted an astonishing 
10 percent in a day after the announcement of a $126 million quarterly loss on Thursday — the latest in a long string of losses for the e-commerce beast.

For consumers, Amazon's prices seem impossibly low. And that's because they are, in fact, impossible. You can't sell items that cheaply. No company could ever make a profit by selling goods at or below cost, and that's exactly what Amazon has done for as long as anyone can remember.

Bezos is a puzzling man. The delivery drones. The atomic clock. The Washington Post. Who can figure this dude out? Some commentators have wondered whether Amazon was set up to function as a de facto consumer charity. I've wondered that myself. I've come to quite the opposite conclusion.

Amazon won't raise its prices until it has achieved a majority of the market that brick-and-mortar retailers currently occupies. An entire generation of locally owned small businesses — and mid- to large-sized businesses — hang in the balance.

"The current investment cycle layers in increased technology and content costs as Amazon seeks to build itself into a complete consumption, payment and advertising platform for physical and digital goods," wrote analyst Colin Gillis of BGC Financial in a note to investors yesterday.

In other words, all this taking over the world ain't cheap!

Currently valued at 
$147 billion, Amazon is the 28th largest publicly traded company in the United States. And in the past 48 hours it lost $15 billion of its market value.

Investors are getting antsy.

I'm all about encouraging that sense of angst. Although Amazon's convenience and prices are hard to beat, I find myself spending a little more offline lately: shopping local, paying a little bit more here and there, and chalking it up to charity. You too can help keep Amazon stockholders worried and a little ticked off. You know what to do.


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Family feud sparks revolt at grocery store chain

WEST BRIDGEWATER, Mass. — It's been called a David vs. Goliath story, a "Tale of Two Arthurs" and even the "ultimate Greek tragedy," but the characters in this drama are not Biblical or literary figures. They're grocery store owners.

A workers' revolt at the Market Basket supermarket chain has led to empty shelves, angry customers and support for a boycott from more than 100 state legislators and mayors.

Industry analysts say worker revolts at non-union companies are rare, but what's happening at Market Basket is particularly unusual because the workers are not asking for higher pay or better benefits. They are demanding the reinstatement of beloved former CEO Arthur T. Demoulas, whom they credit with keeping prices low, treating them well and guiding the company's success.

The New England grocery store chain is embroiled in a family feud featuring two cousins who have been at odds for decades.

While earlier squabbles between Arthur T. Demoulas and Arthur S. Demoulas were fought in courtrooms, this dispute has spilled into the stores.

For the past week, warehouse workers have refused to make deliveries to Market Basket stores, leaving fruit, vegetable, seafood and meat shelves empty. Workers have held huge protest rallies and organized boycott petitions through social media, attracting thousands of supporters.

Customers are defecting to other grocery stores. In some cases, customers have taped receipts from competitors to Market Basket windows.

"We are going to go somewhere else from now on," said Soraya DeBarros, as she walked through a depleted produce department at the Market Basket in West Bridgewater this week. "I'm sad about it because of course I want to keep the low prices, but I want to support the workers."

Despite threats by new management to fire any workers who fail to perform their duties, 300 warehouse workers and 68 drivers have refused to make deliveries. Eight supervisors have been fired.

The new executives have assured workers they are not planning drastic changes in the way the company is operated and have urged them to return to work.

On Friday, the company again appealed to workers to return, saying they won't be punished or face any change in compensation and benefits.

"We welcome back associates who are committed to Market Basket's customers," it said in a statement.

Massachusetts Attorney General Martha Coakley, who is running for governor, and New Hampshire Gov. Maggie Hassan have publicly supported the employees.

"If you had told me that workers at a grocery store would walk out to save the job of a CEO, I would say that's incredible. There is usually such a gulf between the worker and the CEO," said Gary Chaison, a professor of industrial relations at Clark University in Worcester.

Market Basket stores have long been a fixture in Massachusetts. The late Arthur Demoulas — grandfather of Arthur S. and Arthur T. and a Greek immigrant — opened the first store in Lowell nearly a century ago. Gradually, Market Basket became a regional powerhouse, with 25,000 employees and 71 stores in Massachusetts, New Hampshire and Maine.

The feud dates back to the 1970s, but the most recent round of infighting began last year when Arthur S. gained control of the board of directors. Last month, the board fired Arthur T., sparking the current uprising.

Workers are fiercely loyal to Arthur T.

"You know the movie, 'It's a Wonderful Life.' He's George Bailey," said Tom Trainor, a district supervisor who worked for the company for 41 years before being fired last weekend over the protests. "He's just a tremendous human being that puts people above profits. He can walk through a store, and if he's met you once, he knows your name, he knows your wife, your husband, your kids, where they are going to school."

Earlier Friday, board members said they will consider an offer Arthur T. made this week to buy the company.

"Consistent with its fiduciary obligations, the Board will evaluate and seriously consider this proposal, along with any other offers previously received and to be received," the board said.

The board also decried what it called the "negative behavior" of some current and former employees.

"It is now clear that it is in the interests of all members of the Market Basket community for normal business operations to resume immediately," it said.

As the board met, up to 10,000 employees, customers and supporters attended another protest rally at a Market Basket store in Tewksbury.

Employees said they believe the fight between the family members loyal to Arthur T. and Arthur S. is largely over money and the direction of the company. They say Arthur S. and his supporters have pressed for a greater return to shareholders.

Arthur T. and his supporters have focused on keeping prices low.

Many employees are distrustful of Arthur S. and two co-chief executives who were brought in from outside the company: Felicia Thornton, a former executive of the grocery chain Albertsons, and Jim Gooch, former president and chief executive at RadioShack Corp.

The company statement Friday acknowledged "the strain this change of leadership has placed on our associates."

Valerie Burke, a worker in the West Bridgewater store, said she's worried about her job.

"It's a great company to work for now, but we are worried it won't stay that way," she said as she picketed outside the store Tuesday.

Arthur S. has not spoken publicly, while Gooch and Thornton have communicated only through prepared statements.

Steve Paulenka, who started in 1974 as a bag boy and rose to facilities and operations manager before being fired last weekend, said he sees no end to protests unless Arthur T. is reinstated.

"A big part of me doesn't like what's going on — it's like breaking your favorite toy on purpose," he said. "But we'll get through this."


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North Dakota industrial fire cleanup to take weeks

WILLISTON, N.D. — Cleanup efforts at the still-smoking site of an oil field supply company in North Dakota that caught fire earlier this week could take weeks, an Environmental Protection Agency Official said Friday.

EPA On-Scene Coordinator Paul Peronard said it would not surprise him if it took two months to clean up the site in Williston, though workers are hoping it will be quicker.

Officials say the fire started about midnight Monday and burned most of Tuesday. At its height, the blaze sent fireballs hundreds of feet into the air.

The Red River Supply facility stored dozens of chemicals used by oil companies, according to state records. The cause of the fire has yet to be identified.

Peronard said workers had not yet started to clean up the main debris field as they give investigators time to identify the cause of the fire. He said once debris clearing begins, workers expect flare ups because a number of volatile chemicals remain.

On Friday afternoon, burned out semi-trucks could be seen in the debris field alongside charred chemical containers. An acrid smell hung in the air and parts of the site were still smoking.

"It could stay and smolder for months if left to its own devices," Peronard said.

Some contamination found its way into a storm water runoff next to the site, but the runoff was closed off during the incident. A U.S. Fish and Wildlife representative was on scene collecting fish for testing.

Peronard said he believes chemicals may have taken up much of the oxygen in the water, killing the fish. Cleanup workers are injecting oxygen into the storm runoff.


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Google reportedly finalizes deal for live-stream service Twitch

Google Inc. has reportedly finalized a deal to buy game live-streaming service Twitch Interactive Inc. for $1 billion and fold it into its YouTube unit.

By acquiring the San Francisco company, YouTube is making a big bet on the growing audience for watching other people play video games. In just two years, Twitch has tapped into an obsessive fan base that has made it one of the largest live-streaming platforms on the Internet.

But, analysts say, YouTube will also probably use Twitch as a springboard to offer live streams of other categories of entertainment, a place where YouTube's own efforts have failed to catch on. The move underscores how companies are investing in services that reflect the way the Internet is enabling a massive shift in how people create and consume entertainment.

"The way Twitch has built and executed this service has been flawless," said Dan Rayburn, executive vice president of StreamingMedia.com. "This is going to let them take the next step forward."

Talks between Twitch and YouTube were originally reported in May by Variety. This week, technology blog VentureBeat cited sources who said YouTube and Twitch have signed the deal.

Spokesmen for both companies declined to comment on the VentureBeat report.

Since word of the talks originally broke, many observers said the union made sense. YouTube has long been a popular destination for gamers to post highlights and tutorials of their game play.

More recently, many of those gamers have started complementary channels on Twitch. In the three years since Twitch officially launched, its traffic has grown from 3.2 million unique viewers per month to 45 million. More than 1 million video game players broadcast themselves on the platform.

The people who watch are extremely passionate about Twitch. The average viewer watches 106 minutes of Twitch live streams per day. About 58 percent spend more than 20 hours a week watching videos on Twitch, according to statistics from the company.

Those numbers were boosted by deals to build Twitch directly into the latest gaming consoles from Sony and Microsoft.

———

©2014 Los Angeles Times

Visit the Los Angeles Times at www.latimes.com

Distributed by MCT Information Services

_____

Topics: c000214761


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Tamr of Cambridge to add 3 well-known advisers

Tamr, a Google-backed bid data start-up that has raised $16.1 million in venture funding, will add three well-known advisers to the company.

Frank Moss, an entrepreneur and former head of the MIT Media Lab, Dave Girouard, founder and CEO of Upstart, and Christopher Ahlberg, CEO of Recorded Future, will join the Cambridge company as advisers.

"It's an honor to welcome these great leaders as advisers," said Tamr co-founder and CEO Andy Palmer. "Frank, Dave and Christopher are all pioneers in technologies that disrupted traditional industries and opened up new markets — the opportunity we now have with Tamr. They're bringing fresh insights, ideas and energy to our business."

Tamr, funded by Google Ventures and New Enterprise Associates, connects data sources and helps companies analyze the information.

"Fast, accurate data integration is essential," said Ahlberg. "It's great to be in on the ground floor of Tamr, providing advice and experiencing first-hand the tremendous possibilities of this technology."

Moss, who was in charge of the Media Lab from 2006 to 2011, said becoming an advisor was easy for him.

"Deciding to advise Tamr was a no-brainer for me," Moss said.

Girouard said the ability to analyze data has become incredibly important.

"At Upstart, we've learned that using new data sources to make credit lending decisions creates tremendous value," said Girouard. "Tamr enables analysts to integrate new data sources quickly and easily, so that every analytics-driven company can now leverage all their data to improve decisions."


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Bose sues Beats over noise-canceling patents

Audio giant Bose Corp. has sued luxury headphone maker Beats Electronics for allegedly infringing on its patented noise-canceling technology in its headphones.

In a lawsuit filed in federal court and in a complaint to the U.S. International Trade Commission, the Framingham-based Bose says technology protected by patents is being used by Beats in its "Studio" line of headphones.

"We are committed to protecting our investment, protecting our customers and defending the patents we own," Bose said in a statement, while saying the company does not comment specifically on ongoing litigation. "For over 30 years, Bose has made significant investments in the research, development, engineering and design of the proprietary technologies found in our headphones.

Bose is asking for the ITC to bar the import and sale of the headphones in the U.S., and is asking for "damages sufficient to compensate Bose for Beats' infringement."

Bose says Beats Studio and Beats Studio Wireless headphones use a type of noise-canceling technology that uses sound waves to counteract and eliminate unwanted noise.

Bose has filed patent suits in the past, including one in February against Monster Cable Products to block imports of its iSport Intensity earbuds.

Beats has become known for its bright, trendy headphones, while Bose has seen success with its more conservative headphones often used by frequent flyers.

In May, Apple announced that it would buy Beats for $3 billion, its biggest ever acquisition. Beats did not respond to requests for comment.


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California state senator facing additional charge

SAN FRANCISCO — A federal grand jury on Friday charged a California state senator with more felonies in addition to the eight counts he already faced in a sweeping organized crime and public corruption case centered in San Francisco's Chinatown.

A new indictment unsealed in San Francisco federal court charged Sen. Leland Yee with racketeering and conspiracy "to obtain property under the color of official right." Those charges are in addition to the previous bribery, conspiracy and related charges.

Yee pleaded not guilty to the original eight charges. He will have to enter a plea Wednesday to the charges in the new indictment.

The new accusations allege that San Francisco Democrat offered to help pass legislation making it harder for professional football players to obtain workers compensation in California, in exchange for campaign contributions from an unidentified NFL owner.

The new indictment also accuses Yee of taking bribes in exchange for votes in favor of several bills, including one on medical marijuana and another to extend the life of the California State Athletic Commission.

Also charged with racketeering was Raymond "Shrimp Boy" Chow. The grand jury called a Chinese-American association that Chow headed, the Ghee Kung Tong, a racketeering enterprise.

Chow previously pleaded not guilty to money laundering and other charges.

Yee also is accused of accepting bribes and attempting to connect an undercover FBI agent with an arms dealer in exchange for cash. He has pleaded not guilty.

A call to Yee's attorney for comment on the additional charge was not immediately returned. An attorney for Chow, Curtis Briggs, said he was "completely underwhelmed" by the superseding indictment, which he said lacked new investigative findings or new accusations.

"It doesn't hold water, evidenced by the fact that they could have brought the racketeering charge in the first indictment," Briggs said. "We believe that he's innocent, we're still very optimistic about his case, and we look forward to the trial."

Yee was arrested with 19 others in March during coordinated raids throughout the San Francisco Bay Area.

The arrests were the culmination of an FBI investigation started in 2006 after Chow left prison and was elected "dragonhead" of the Ghee Kung Tong. The FBI says undercover agents laundered $2.6 million in cash purportedly garnered through illegal bookmaking through the organization.


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Home Showcase: Cabot mansion unit receives updates

This unit is part of the former mansion of Godfrey Lowell Cabot, founder of the Cabot Corp., that has seen extensive updating over the past several years.

Unit 3 at 242 Beacon St. is one of nine units carved out of the grand mansion. And Unit 3's living/dining area was the home's original receiving parlor.

Recent renovations include two redone bathrooms, updated kitchen, walnut-stained red oak floors throughout, three new HVAC units, new living room windows and built-in shelving for bedroom closets.

The brick exterior of the building and the roof were recently repaired and the front landscaping was redone last year. The marble floor in the building's lobby was replaced in 2012, and a reconditioned elevator and stairways lead up to the condos.

Unit 3 opens into a foyer with a large storage closet. This space is approved for installation of an in-unit washer and dryer. Right now, there is washer/dryer for common use in the building's basement.

Straight ahead is the unit's updated kitchen with oak floors, recessed lighting, 16 white-painted cabinets and dark granite countertops with a tumbled marble backsplash. Stainless-steel appliances include Kitchen Aid and G.E. Profile.

The large living/dining space has a lot of original detailing such as crown molding and a blue tile-faced original wood fireplace. This recessed-lit room has high ceilings, three new front windows in a bay arrangement and cabinet and bookcase built-ins on either side of the fireplace.

The master bedroom suite has a large arched architectural window and a walk-in closet with newly built-in storage. It has a redone en-suite bathroom with black-and-white ceramic tile floors but does not have a tub or shower, although there's space in a corner of the living room to expand.

There's a also fully redone second full bathroom with black-and-white ceramic tile floors, and this bath does have a deep soaking tub/ shower lined with white subway tile.

The second bedroom does not have a window to the outside, but an interior lightwell with storage space. There's also a closet with built-in storage.

There are three new HVAC units, in the living room and in the two bedrooms with new electric thermostats. Heat and hot water is provided as part of the unit's condo fee.

There is a waiting list for parking behind the building for $300 a month. But the owner may be able to get a nearby transferable rental space for $325 a month.

Home Showcase

• Address: 242 Beacon St., Unit 3, Back Bay
• Bedrooms: Two
• Bathrooms: One full, one half
• List price: $899,000
• Square feet: 1,254
• Price per square foot: $717
• Annual taxes: $9,547
• Monthly condo fee: $407 (includes heat and hot water)
• Location: On Beacon Street near the corner of Dartmouth two blocks from retail and restaurants on Newbury Street, three blocks from offerings on Boylston Street.
• Built in: 1884; updated 2011-2014
• Broker: Robb Cohen of Boston Realty Advisors at 617-962-0142

Pros:

  • Large, open living dining area with original details, new built-ins and new windows.
  • New walnut-stained red oak floors throughout
  • Redone bathrooms with black-and-white tile floors
  • Three new HVAC units and electric thermostats

Cons:

  • En-suite master bathroom doesn't have tub or shower
  • Second bedroom doesn't have window to outside
  • In-unit laundry has not been installed
  • Waiting list for parking behind building

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Is Marty right to bunker down?

A day after the state Gaming Commission suggested Boston was "abandoning" Charlestown, neighborhood residents were split yesterday on whether Mayor Martin J. Walsh did the right thing by breaking off talks with Wynn Resorts about how much money the city should get to cope with the company's proposed Everett casino.

"The mayor is not abandoning Charlestown residents. He was a strong ally in arguing for Charlestown to be considered a host community. ... The commission rejected that," said James Matsoukas, who has lived in Charlestown for three years. "There's just so much the mayor can do to negotiate deals that give the city some compensation, when the party he is dealing with is not forthcoming, not approaching the situation in good faith and making a public offer far below what the project requires. What the mayor is saying implicitly is that a decision has already been made."

The offer Wynn made — but Walsh rejected — called for $6 million in one-time payments and $2.6 million annually, compared to the $30 million upfront and minimum annual $18 million pledged to Boston by Mohegan Sun — Wynn's rival for the sole-Boston-area casino license — for a casino on the Revere side of Suffolk Downs.

But Evelyn Addante said she is "incredulous" that Walsh has ceded all dealings with Wynn over to the commission without telling it what the city wants.

"I believe the traffic impacts and safety implications are so important that the mayor should not have missed an opportunity to provide an estimate of the cost of providing road improvements that would ameliorate these impacts," said Addante, 64.

In an email, Walsh spokeswoman Melina Schuler said: "Wynn failed to provide critical information to the city ... We're confident the commission will not have the same issue accessing information from Wynn and expect it will be able to properly assess the project impacts and award Charlestown an appropriate mitigation package."

On Thursday, the commission said it would have its staff continue to urge Boston to negotiate with Wynn and, if that fails, it may appoint someone to serve as the city's advocate.

Its license deliberations will begin Sept. 8, and the commission hopes to make a licensing decision on Sept. 12.


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Car Smart: New Kia Soul offers spirited ride, features

The 2014 Kia Soul 2.0 L is a five-seat wagon with an oddball shape and quirky angular front windows. It looks like anything but a luxury automobile. However, it's equipped like a car twice its cost, boasting some features seen only in high-end models.

This Soul is loaded to the core.

Heated and ventilated seats in this "urban hatchback" keep you the right temperature year-round. The ventilated seats work so well you can even go easy on the air conditioning on a hot day.

The Soul's navigation system has a substantial 8-inch display, but its two-dimensional display will not show a third dimension until a destination is entered.

Also driven by the big touch screen display is the Infinity sound system, which cranks deep rich bass to its eight speakers including a center dash speaker and sub-woofer. The speakers also glow with the music for some mood lighting.

Controls for the audio system are mounted on the leather-wrapped steering wheel as well as on the touch screen.

The Soul has a power panoramic roof with a power sunshade which helps give an open feel to this small car with big features.

Sleek 18" alloy wheels complement its textured front grille and smart- looking headlights.

Kia also equips this car with a backup camera that is among the best. It provides clear detail of the area behind your bumper as you back in and out of those tight parking spots the 13-foot-7-inch Soul can squeeze into.

Rounding out the Soul's nice features is a 6-speed automatic with manual overriding paddle shifters commanding a spirited 2.0-liter inline-4,
164 -horsepower engine.

The Soul sips gas, getting 23 mpg in the city. It is responsive and fun to drive around the city, but the city is where the luxury similarities are left.

While the Soul gets 31 mpg on the highway, I found the 10-way adjustable driver's seats uncomfortable for longer drives. I'd like to see the headrest re-engineered so it is more adjustable and not pushed as far forward as the testers.

Its rigid chassis and tight suspension keep a snug connection to the road, but at higher speeds this car gets bounced around by bumps in the road, possibly because it is so lightweight.

Kia equips this car with a horn that nobody can possibly respect. This is not to suggest that smaller cars should have foghorns, but when other drivers hear such a wimpy sound, it barely gets their attention.

The hands-free phone performance is a major shortcoming, especially these days given the need for full concentration on the road and laws in most other states requiring hands-free cellphone use.

Essentially, the Soul is a well-equipped inexpensive compact wagon that is better for city driving than cruising on the highway in spite of the great mileage it gets.

2014 Kia Soul 2.0 L

  • MSRP: $17,695
  • As tested: $21,295
  • MPG: 23 city, 
31 highway

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