Tag Archives: amzn

Is Amazon-Backed Web China Grocery Vendor Yummy77 ‘Out Of Cash’?

Amazon.com ( AMZN )-backed Chinese online grocery sales website Yummy77 might have run out of cash, making it the first major casualty of China’s super-competitive online grocery market, according to Young’s China Business blog. The report comes after two major new funding announcements illustrated the potential for online grocers in China. Amazon’s name still appears at the top of Yummy77’s webpage, with the notation that it is a “strategic cooperative partner,” and clicking on the name takes you to a Yummy77 food section on Amazon’s own China website. “But Amazon’s China page also contains its own Amazon-branded food section with extensive offerings. That would seem to indicate that Yummy77 was still operating independently and was only getting marketing assistance from Amazon as a strategic partner,” the report said . China’s Yummy77 is not related to the Los Angeles-based online grocery company Yummy.com, a spokesperson for the U.S. company confirmed to IBD. Yummy77’s troubles highlight the big potential — and the big risks — for online grocers in China, where the market is teeming with new companies rushing to cash in on the trend. The Yummy77 report comes after two other online fresh food sellers raised big bucks in March. Yiguo — backed by China e-commerce giant Alibaba Group ( BABA ) — raised $260 million, the report said. Another China e-commerce leader, JD.com ( JD ), backs Fruitday, a fresh produce electronic retailer which raised $100 million in new funding , said the report. “Entrepreneurs are realizing that Chinese consumers are very willing to buy almost anything over the Internet that used to be sold in traditional brick-and-mortar stores. Even highly perishable items like fruit and meat are following the trend, thanks to recent logistical improvements that are making same-day deliveries common, sometimes just an hour or two after an order is placed,” Young’s China Business said in a prior report in March . Chinese Internet companies are in a sweet spot as the country quickly moves to broadband mobile platforms, fueled by a burgeoning middle class with more disposable income. In May, JD.com launched a grocery delivery service in partnership with stores in select urban areas. It also invested $70 million in Fruitday. JD.com stock was up 1.5% in afternoon trading in the stock market today , while Amazon stock was up a fraction and Alibaba stock down a fraction.

Apple, Facebook Among Top Technology Investment Choices

Facebook ( FB ) received honors as the top Internet investment idea by Credit Suisse, followed by Amazon.com ( AMZN ) and Alphabet ( GOOGL ). In tech hardware, Apple ( AAPL ) is a favorite. Credit Suisse based its picks on a six- to 12-month time horizon. Credit Suisse analyst Stephen Ju says Facebook can drive long-term revenue growth without a material lift in ad loads. Near-term ad growth drivers include Facebook’s video- and photo-sharing site Instagram and its premium video, which brings in high ad rates. He says Wall Street’s projections for Facebook are too conservative and underestimate the long-term moneymaking potential of other products, including Messenger and WhatsApp. Ju has a price target on Facebook stock of 135. Facebook stock was down 2.5%, near 110, in afternoon trading in the stock market today . Amazon, Ju’s No. 2 investment, should provide upside to estimates, he says, in part from ongoing strength in e-commerce. Ju has a price target on Amazon of 800. Amazon stock was up a fraction Friday afternoon, near 593. Ju expects Alphabet to narrow the monetization gap between mobile and desktop, while increasing ad loads. He also expects Alphabet to get strong growth from YouTube and its Google Play app store. His price target on Alphabet stock is 930. Alphabet stock was down a fraction Friday afternoon, near 756. Regarding Apple, Credit Suisse analyst Kulbinder Garcha rates it a top investment idea, saying multiple growth drivers include its strength with the iPhone, iPad and Mac computer and greater adoption of the iOS ecosystem. Another is Apple’s commitment to cash distributions. Garcha has a price target on Apple of 150. Apple stock was trading above 128, up a fraction, Friday afternoon.

Economists Adding Up At Amazon.com, Microsoft, Google

As the tech industry gets ever more data-driven, a “Ph.D. in economics” is more often becoming a job requirement in the sector. Established giants and newer tech firms alike are enlisting economists to help with many crucial tasks. Companies that employ economists include Amazon.com ( AMZN ), Airbnb, IBM ( IBM ), Facebook ( FB ), Microsoft ( MSFT ), eBay ( EBAY ), Yahoo ( YHOO ) and Uber. Hal Varian was a consultant for Google (now part of Alphabet ( GOOGL )) going back to 2002, becoming its chief economist in 2007. And the trend has grown, as tech economists say there’s more demand and appreciation for the work they do. Hal Varian, Google chief economist. Amazon is a leading employer of economists, with “dozens” aboard, says Susan Athey, a professor of the economics of technology at Stanford Graduate School of Business and a longtime consultant to Microsoft. Amazon didn’t respond to a request for comment. Athey says Microsoft is another company with “at least a dozen” economists on staff. She knows of nearly 100 economists employed by tech firms, the big majority joining after 2010. Tech company economists must combine theory with practical application. “We use economic principles and economic theory, but we also use experiments, statistical data and other aspects of the real world to build systems that work and will stand the test of time,” said Preston McAfee, chief economist at Microsoft. These systems can address fundamental business questions, such as setting prices, as well as challenges brought about or exacerbated by the rapid rate of innovation in the tech industry. As firms expand, economists are increasingly working on public policy issues, including privacy issues and intellectual property topics. Economists Must Speak Both Tech And Non-Tech Economists have to analyze large amounts of data. Much of their value to tech firms is in helping to connect the engineering side with the business side. “Economists are trained in the intuition and goals of business, but they are also comfortable with data, statistics and the technical aspects of running a business,” Athey said. “A successful economist is multilingual.” A tech firm today might hire an economist when they struggle to navigate a new marketplace. “You might confront a business problem where you realize there’s no off-the-shelf HBS (Harvard Business School) case study or McKinsey rule of thumb you can apply to manage your unique marketplace,” Athey said. “It’s really an economics research project to figure out the business practices to operate the new platform.” Economists have helped Uber develop its “surge” pricing algorithm — basically, when demand exceeds supply, Uber’s prices rise — and have led Airbnb to offer professional photography services for hosts. While the platforms are new, these problems come down to supply and demand. One of the biggest and most famous contributions of a tech economist is Varian’s work on AdWords. As his first assignment, Varian helped Google develop its auction-based approach to selling ads, still by far the company’s largest source of revenue. Preston McAfee For economists, the fast-paced environment and variety of challenges are among the big draws of working in the tech industry. “I’m in this business because I don’t like routine. I relish having new challenges,” said McAfee. McAfee had been a professor for 28 years before leaving academia to join the tech industry in 2007 as chief economist at Yahoo. At Microsoft, McAfee is working to develop a new business model to sell technology developed by research units directly to customers, among various other tasks. “It’s a new take on a classic research model, and I’m happy to be a part of it,” he said. Google Economist’s One-Year Gig Now In Year 14 Varian had intended to stay at Google for a year while on leave from the University of California, Berkeley, but the excitement of the work at Google drew him away from academia. “We’ve got a great environment here where you have the infrastructure for developing projects and products,” said Varian. “Most of the things we’ve done have been of considerable interest to the company.” Besides AdWords, his other key tasks at Google included helping with its unusual “Dutch auction” style of IPO in 2004, designed to open the process to everyone and not just to favored clients of underwriters. He also collaborates with Google X, the company’s “moonshot” R&D factory, to help develop some of the business models. Michael Bailey, economics research manager at Facebook, looks at academia and tech as a difference between breadth and depth. “In industry, you are working on a larger variety of problems and projects and often need to take more multidisciplinary approaches so you are effectively building more breadth,” Bailey told IBD via email. Bailey, who joined Facebook directly after finishing his Ph.D., said his team is growing and that he expects the tech industry to continue hiring economists at a fast pace. Varian agrees. “A lot of people have developed an appreciation for the kind of economic analysis we do,” he said. The interest is mutual. Within economics, the community of people who study the high-tech economy has grown from a very small number to hundreds across academia, business and government over the last 10 years, Varian says. “We’re developing a new field of practicing economics in the real world,” said Microsoft’s McAfee. “Some of our big successes have been in auctions and pricing, but there are many more of those to come. And I think that’s a very cool thing to be a part of.”