Tag Archives: amzn

Instant Gratification A Hit For Amazon.com With Prime Now

With the lofty goal of delivering vast swaths of his mighty e-commerce firm’s sprawling inventory within one hour, Amazon.com ( AMZN ) CEO Jeff Bezos has struck cybergold — shoppers have flocked to the latest iteration of his Amazon Prime loyalty program, Prime Now. Amazon executives have described rapid delivery as both difficult and expensive — and have acknowledged that customers love it. And Amazon loves its customers, so much that Bezos repeatedly has said the company will forego profits to please them. Cowen & Co. Tuesday released results of its survey of 1,200 Amazon Prime customers that it says shows one in four already have adopted Prime Now. It’s basically free. With order via a mobile app, Prime Now will deliver a large number of Amazon-bought goods within two hours in areas of the nation where the service is available. Customers can use the app for one-hour delivery as well, but there’s a $7.99 charge for that. Prime Now is one Amazon salvo in a multiyear campaign to snatch more of the household budget. Amazon.com stock was up more than 3.5%, near 573, in afternoon trading on the stock market today . The company carries an IBD Composite Rating of 78, where 99 is the highest. Cowen analyst John Blackledge, in the research report, says that Bezos’ approach with Prime Now complements Amazon’s same-day and two-day services, and adds more value to its grocery operations Pantry and Fresh. Wal-Mart Vs. Amazon Heating Up Wal-Mart ( WMT ) — by far the largest brick-and-mortar retailer — makes bank on its grocery business, which accounts for about half of its top line, according to ChannelAdvisor ( ECOM ) Executive Chairman Scot Wingo. But Amazon is encroaching on Wal-Mart’s business. “We view Prime Now as one of the pathways Amazon is using to gain share in the $1 trillion grocery market,” Blackledge wrote. “Our early survey work suggests the strategy is working.” The survey indicated that 70% of those responding bought goods via Prime Now multiple times a month — and about a third of shoppers bought groceries from a local store that elected to list its items on Prime Now. The service is available in 24 markets that account for nearly half of the U.S. gross domestic product, says Blackledge. Food delivery is available in seven markets. Prime Now’s success is also a blow to eBay ( EBAY ), which continues to struggle to maintain relevancy for shoppers. Plagued by problems such as a significant data breach and SEO challenges following a change in Alphabet ( GOOGL ) subsidiary Google’s search engine algorithm, eBay has been unable to match Amazon’s double-digital growth rate. Disagreeing with recent investor sentiment — eBay stock has had a choppy beginning to 2016 — Wells Fargo analyst Matt Nemer says that eBay has potential, albeit as a hedge against a potentially slowing global economy. And for its part, eBay has been making significant bets on restructuring the way it lists items. But as Amazon continues to innovate its way to riches, some say that its position as the dominant e-tailer is impenetrable . That hasn’t stopped rivals, however. Privately held Jet.com is making a stab, also offering two-day shipping, and Alibaba ( BABA )-backed ShopRunner is also taking aim at Amazon. ShopRunner executives have told IBD that the company plans to take on Amazon in categories where the Seattle-based company doesn’t have a strong foothold, such as fashion.

Microsoft Azure Cloud Service Seen Turning Profitable This Year

Microsoft ’s ( MSFT ) Azure cloud computing service is a money-loser for the software giant, but that should change this year, investment bank Goldman Sachs said in a report Sunday. Azure is the second largest cloud platform and infrastructure service, but it trails Amazon.com ( AMZN )-owned Amazon Web Services by a mile. In 2015, Microsoft’s Azure generated $1.81 billion in sales, up 112% from the prior year. But its gross profit margin was -6%. That’s an improvement from the -17.1% gross margin in 2014, Goldman said. By comparison, AWS raked in $7.88 billion in sales last year, up 70% from 2014. Its operating profit margin was 23.7% in 2015, up from 14.2% in 2014. Goldman predicts that Microsoft’s Azure sales growth will continue to outpace AWS this year and turn profitable as well. It forecasts Azure generating $3.46 billion in sales, with a gross margin of 9.2%, in 2016. For 2017, it sees Azure racking up $6.18 billion in sales, with a gross margin of 20.9%. But Amazon is likely to maintain its solid revenue lead. Goldman estimates that AWS sales will jump to $12.50 billion this year and $19.13 billion in 2017. It sees the operating margin for AWS increasing to 29.3% in 2016 and 29.5% in 2017. Goldman predicts that AWS and Azure will take market share from smaller rivals this year and next as smaller rivals struggle, with some exiting the market. AWS boasted 39% market share in the public cloud segment last year, vs. 9% for Azure. AWS is forecast to reap 46% market share this year and 54% in 2017. Meanwhile, Azure is seen growing to 13% market share this year and 17% in 2017. RELATED: Google Seen Slashing Cloud Pricing Vs. Amazon, Microsoft . Image provided by Shutterstock .

Apple Music Rival Spotify Could Get $500 Million Injection: Report

Apple ( AAPL ) Music and Pandora Media ( P ) rival Spotify could get a $500 million injection from TPG Capital, a major U.S.-based private equity firm, according to a British media report. The reported financing of Spotify comes amid continuing growth in the music-streaming sector and follows a share sale last year which valued the privately-held company — which has nearly 30 million paying subscribers — at about $8.5 billion, according to a report by Sky News late Friday. TPG Capital is discussing an investment of as much as $500 million to Spotify, which competes with Apple , Pandora, Alphabet ( GOOGL )-owned Google and other music-streaming services, Sky News said. Sky News reported that the money could be used to fund acquisitions, with talk of a major investment in Spotify coming on the heels of another report, this time from the New York Post, saying Samsung, Spotify and Google all examined a potential takeover of music streaming service Tidal. Spotify has discussed creating an initiative that could produce a Tidal “powered by Spotify” partnership rather than an acquisition, the New York Post said on Thursday. An estimated 41 million people paid for a streaming music subscription services in 2014, according to IFPI, a London-based recording industry trade group that represents more than 1,300 record labels. TPG declined to comment on the report. Apple Music has 11 million paid subscribers, senior vice president Eddy Cue said earlier this month , up from 10 million paying customers at the beginning of the year. Apple Music began in June for Apple iOS users with three-month trial subscriptions, expanding to the Google Android operating system in November. Apple may be attracting members from its rivals, including Pandora, Amazon.com ( AMZN ), Google’s YouTube and Spotify. Apple stock slipped 0.3% in the stock market today , closing at 96.65. Pandora stock closed up 0.5% at 10.22. Image provided by Shutterstock .