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Business From The Editors

Amazon Gears Up for a 14-Billion-Dollar Buyout of Whole Foods – It’s Biggest Ever

Amazon is all set to take over “Whole Foods Market” by the end of the year for a stupendous sum of $13.7 billion, its largest acquisition by far, surpassing its buyout of online shoe store Zappos in 2009 by a huge margin of $ 12.7 billion – more than 14 times.

As of now, Zappos continues to be Amazon’s biggest acquisition until the Whole Food deal, pending regulatory approval, is closed; it will then become a distant second – way distant.

The tit-for-tat buyout decision is seen by many as a direct faceoff with its long-time rival, Walmart, the largest grocery retailer in the United States.

In a bid to keep up with the internet shopping business, Walmart paid $3.3 billion for Amazon-competitorJet.com last year and made the chief executive of Jet, Marc Lore, the chief of Walmart’s complete e-commerce business. To further shore up its internet retail presence, Friday it announced its decision to acquire Bonobos, the Internet apparel retailer for $310 million.

With this deal going through, Amazon is looking to take a foothold in the $800 billion grocery industry, and a big one at that, what with over 400 stores spread across the United States, Canada, and Britain. If this is not a direct challenge to Walmart, what is?

“This deal should leave no doubt that Amazon is deadly serious about dominating all aspects of retail,” Paul Cuatrecasas, chief executive of Aquaa Partners, a London-based investment banking firm said. “Amazon is effectively saying that if retailers are going to tool themselves up with technology, then they will tool themselves up with a physical presence and high-street brand.”

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As of now, Amazon is rather taciturn about it is plans for Whole Foods. However, the fact that it opened a prototype grocery store/supermarket (Amazon Go Store)in Seattle this year, with droids running the cashier-less store, is indicative of the automation plans Amazon may have for the 400+ Whole Foods stores.

The online giant’s announcement of the takeover does not come as a surprise as it has been testing the waters of the lucrative grocery business for over a decade. “Amazon Fresh” was launched in August 2007 delivering grocery and pantry staples through its fulfillment centers.

Yet, even after a decade, Amazon continues to see great potential in the grocery industry, evident from the massive takeover, to ensure a physical dominance in this area, as well.

Launched in March this year, “AmazonFresh Pickup” is another pointer toward Amazon’s growing interest in the produce business.

Walmart and Kroger have similar modules where a customer orders groceries online, drives to a company-run store, where an employee brings the bag/s right up to the customer’s car. However, they take to 2-4 hours to process an order whereas Amazon does it in fifteen minutes.

Both the business models, Amazon Go, discussed earlier, and AmazonFresh Pickup, are not only novel ways of ensuring a ‘minimum-friction shopping experience’ for customers but effective labor cost cutting tools as well.

“Amazon buying Whole Foods is a good fit with the company’s larger strategy for groceries,” says Jason Goldberg, vice president of commerce at the digital marketing company Razorfish. “Fresh groceries is the biggest category of consumer spending in retail that hasn’t been disrupted by online yet,” as reported by Wired.

Amazon may be all prepped up to give Walmart a run for its money but it must be pointed out that the competition will be restricted to urban areas as Whole Foods doesn’t take Amazon to rural America where Walmart rules the roost.

“Amazon is stronger in bigger cities, and the map of Whole Foods locations shows it is closer to these cities,” says Goldberg. “If this strategy proves out for Amazon, you could well imagine it could be opening a bunch more stores or doing more acquisitions just to cover the US,” says Goldberg. ”

The Friday announcement sent competitor shares crashing as investors tried to come to grips with Amazon’s big time incursion in the grocery industry. SuperValu, running a network of 2,000 stores across America, was the biggest casualty, with a 14 percent drop on Friday while Kroger saw its share value going south by 9 percent.

Shares of Whole Foods, on the other hand, took off by almost 30 percent and Amazon was up by 2.4 percent raising its share value to $987.71, adding a cool $11 billion to its market capitalization – almost covering the cost of the acquisition, in a way.

This is what Mickey Chadha, vice president and senior credit officer at Moody’s Investors Service, had to say about the acquisition:

“Supermarkets will now have to contend with not only competition with each other and non-traditional grocers like Wal-Mart Stores Inc and Target Corp, but with a retailer like Amazon which has the financial capacity to price aggressively.”

In a statement released Friday, Marc Perrone, the president of the United Food and Commercial Workers Union, said: “Amazon’s brutal vision for retail is one where automation replaces good jobs. That is the reality today at Amazon, and it will no doubt become the reality at Whole Foods.”

However, for now, Amazon has assured that the acquisition will not result in any downsizing.

If Brittain Ladd, former senior manager at Amazon, is correct in his assessment, the e-commerce giant may well build out non-grocery areas within the stores, particularly for pharmacy and Amazon devices, reports Reuters.

“There’s no value in Amazon keeping the status quo at Whole Foods. Whole Foods was losing market share to Kroger,” Ladd said, according to Reuters. “It’s pharmacy. It’s having the ability to put stores that are similar to Apple stores inside Whole Foods.”

Being the powerhouse that it is, Amazon is being looked at by some analysts to bring a massive buying strength to Whole Foods, although Amazon’s grip on the food market is not as firm as it is in other areas. Also a high and growing demand for organic food give farmers a bargaining edge.

About Amazon

Jeff Bezos founded Amazon.com on July 5, 1994, initially setting up his business in his garage.

Portfolio.com has very aptly described Bezos as “at once a happy-go-lucky mogul and a notorious micromanager: “an executive who wants to know about everything from contract minutiae to how he is quoted in all Amazon press releases.”

What actually inspired and pushed him into founding Amazon, leaving a lucrative job at a New York City hedge fund, was the “rapid growth in internet use.”

Jeff Bezos referred to it as “regret minimization framework,” which basically means he wanted to capitalize on the internet boom at the right time and not regret the delay in joining in sooner.

However, another factor that propelled him toward the Amazon idea was the U.S. Supreme Court ruling at the time that mail order companies were exempt from collecting taxes in states where they did not have a physical presence, such as offices, warehouses or any other physical property directly or indirectly related to the business.

Headquartered in Seattle, the company was initially named “Cadabra” by Bezos, changing it to “Amazon” a year later. The humor behind the name change is that a lawyer happened to have misheard the name as “Cadaver” which, as we all know, means corpse or a dead body.

The story goes that Amazon was named after the mighty Amazon River, “exotic and different,” which matched Bezos’ vision of making his company different, exotic and the biggest in the world.

From its rather humble beginnings as an online bookstore, Amazon has grown into an “electronic commerce and cloud computing company,” the largest internet retailer in terms of total sales and market capitalization.

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Of course, the growth of Amazon into what it is today went through different stages of diversification – from selling books online to DVDs, CDs, video downloading and streaming, Bluerays, MP3 downloading and streaming, audio books downloading and streaming, electronics, software, video games, furniture, apparel, food, toys, jewellery – you name it and they have it delivered to your doorstep! Amazing Amazon!

It does not end here; Amazon is also into manufacturing consumer electronics such as Amazon Kindle e-books, Fire tablets, and Fire TV, to name a few, in addition to being one of the world’s largest providers of cloud computing infrastructure services.

Amazon’s long history of acquisitions and mergers dates back to 1998 and has continued ever since.

Here’s a look at its acquisitions in the last 5 calendar years (source – Wikipedia).

2013:

* IVONA Software
* Goodreads
* Liquavista

2014:

* Double Helix Games
* comiXology
* Twitch

2015:

* Annapurna Labs
* 2lemetry
* ClusterK
* Shoefit
* Safaba Translation Systems
* Elemental Technologies

2016:

* Amazon increased its overall investment in India to $5 billion, and with that, reduced seller fees to take on its Indian competitor, Flipkart
* NICE
* Curse, Inc.
* Biba Systems

2017 (till date):

* Harvest.a
* Thinkbox Software
* Do.com
* Souq.com
* Whole Foods Market
* And now, it’s grocery!

Categories
From The Editors Technology

Nokia Announces Buyout of Comptel for $370 Million

After granting a ten-year exclusive brand licensing rights to HMD Global to make and market its android phones, Nokia is now looking towards greener pastures of the ever-expanding telecom software industry.

Nokia’s February 2 announcement of an intended buyout of Comptel, a Finnish company like itself, for a whopping $370 million bears testimony to Nokia’s efforts to shore up its software and networking portfolio and its dwindling sales in its networks business.

In its earnings report for the fiscal Quarter ending Dec 2016, made public on February 2, 2017, Nokia showed a 14 percent decline year-over-year in its networking sales. Rajeev Suri, president, and CEO of Nokia, while accepting the slowdown showed positivity toward better results this year in his statement on the financial performance of the company.

Here’s an extract from the CEO’s statement:

“Our ongoing intense focus on execution, cost management, and pricing discipline was critical to offset the impact of challenging market conditions over the course of the year. While I remain disappointed with our top line development in 2016, we continue to expect our performance to improve in 2017 and see the potential for margin expansion in 2017 and beyond, as market conditions improve and our sales transformation programs gain further traction.”

Nokia’s area of expertise has been on the hardware and equipment side but it is looking to change all that now by focussing on capturing a chunk of the telecom software business. Buying out Comptel – a company that specializes in providing telecommunications software and networking solutions to mobile network carriers with a customer base of over three hundred operators in various countries – is a move towards achieving that end.

The Comptel buyout is expected to further consolidate Nokia’s own carrier solutions business. Comptel’s expertise merging with its own will provide a solid platform to launch an aggressive marketing strategy to get the attention of wireless carriers that are looking to optimize their network and business operations and other business capabilities.

“Nokia is committed to building its software business and is backing its commitment with strategic investments. The timing of the Comptel purchase is important as our customers are changing the way they build and operate their networks. They are turning to software to provide more intelligence, automate more of their operations, and realize the efficiency gains that virtualization promises,” said Nokia’s Applications & Analytics business group president, Bhaskar Gorti speaking on the proposed acquisition. “We want to help them by offering one of the industry’s broadest and most advanced portfolios. Comptel helps us do that,” he added.

Independently, both Nokia and Comptel would have had difficulties to continue competing with giants like Ericsson, Cisco, and Amdocs but together they stand a better chance of giving competitors a run for their money. Nokia and Comptel are anticipating the Comptel buyout will level the playing field considerably.

“Together with Nokia we would create an agile and innovative player which can challenge current market leaders head-to-head,” is what Juhani Hintikka, President, and CEO of Comptel, said in a statement in this regard.

In addition to its software technology, Comptel would also be giving Nokia a network of marketing workforce and an existing carrier base for upselling other products and services. “Comptel would bolster Nokia’s software portfolio by adding critical solutions for catalogue-driven service orchestration and fulfillment, intelligent data processing, customer engagement, and agile service monetization,” Nokia observed.

The proposed buyout deal has not been closed yet but Nokia has estimated that shareholders with 48.3 percent of Comptel shares have agreed to sell. The shareholders who are willing to part with their shares at the offered price of £3.04 per share in cash include the Comptel President and CEO and the Board of Directors, Mutual Insurance Company, Kaleva Varma Mutual Pension Insurance Company, Mandatum Life Insurance Company Limited, Ilmarinen Mutual Pension Insurance Company, and Elisa Corporation.

Nokia is expected to provide an update in regards to the buyout proposal on February 24.

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Entertainment From The Editors Humor

Weird Ways To Go Broke

With the rising inflammation in our society, it is normal to hear people say that they have gone “broke”. The word “broke” refers to the idea of having completely run out of money. Many people buy different things from boredom and too much money in your wallet. They buy more and more things that others drew attention to them. With the growing advancements in technology, the amount of stuff we own these days is staggering.

The television has all kinds of ads, which in general aim to keep you from thinking and, instead, make your buying choices based on an emotional response. On average, we see with the growing advancements in technology, the amount of stuff we own these days is staggering. The television has all kinds of ads, which in general aim to keep you from thinking and, instead, make your buying choices based on an emotional response.

On average, we see 5,000 advertisements every day. Every advertisement carries the same message: your life will be better if you buy what we are selling. We begin to hear this messaging so many times and from so many angles, we begin to subtly believe it. This is not a complete condemnation of the marketing industry. This is simply a call to realize their messaging affects us more than we realize.

Consumer broke

Today’s consumers must be more vigilant than ever in the face of clever, and even deceptive, marketing tactics. If you’ve ever looked at someone rich and thought you’d be set for life if you had all that money, maybe you would or you wouldn’t. There’s no such thing as having too much money to ever go broke. Financial security is determined by financial decisions and so, here are some ways that you can save yourself from getting broke.

Today’s consumers must be more vigilant than ever in the face of clever, and even deceptive, marketing tactics. If you’ve ever looked at someone rich and thought you’d be set for life if you had all that money, maybe you would or maybe you wouldn’t.

There’s no such thing as having too much money to ever go broke. Financial security is determined by financial decisions and so, here are some ways that you can save yourself from getting broke.

With money comes the great urge to spend it, and so people start spending it on useless things just because the idea of spending the paper and owning much greater things helps us all feel secure. Our logic goes like this, if owning some material possessions brings us security (a roof, clothing, reliable transportation), owning excess will surely result in even more security. But after meeting our most basic needs, the actual security derived from physical possessions is much less stable than we believe. They all perish, spoil, or fade and can disappear faster than we realize.

Some people who inherit money spend irrationally. They go on shopping sprees, take vacations and immediately start upgrading their lifestyles. Upgrading your lifestyle includes buying a bigger home with which come great expanses. The bigger the house, the more you are required to pay for the maintenance, utilities, and taxes that may rob you off your little bit of savings.

To keep up with the pressure of the luxurious activities that come along with wealth, many get involved in gambling. For some people, gambling is recreation. For others, it starts out that way but turns into a financially crushing addiction. It’s not unusual for gambling addicts to drain savings, paid business accounts, write bad checks and spend their children’s college tuition.

Gambling Broke Finance

On top of that, many skips work to gamble. Habits like gambling then lead a person to deviant acts like drinking which both, health wise and socially looked upon as a devastating habit that leads many in dismay. It has reportedly destroyed many happy homes and leads to divorce between couples and sometimes leaves one or both eyes broke, as they often have less income and higher expenses when living apart.

With the loneliness that comes along with the divorce, people start to spend more to ease themselves of the stress and depression. The need to impress and make others feel jealous is also another reason that persuades a person to spend more and more which leaves him broke.

There have been reports of many financially successful people go broke trying to get richer. They start businesses they don’t need and don’t have the experience to run. Washington Post columnist Michelle Singletary called it “entrepreneur syndrome.”

Coupled with this comes the company of a bad business partner that may cause your Titanic to sing along with his. according to Catherine Cooper, founder of Catherine Cooper Qualitative Research. One partner can run up credit, drain the business and so run it into the ground. When the unsuspecting partner discovers what’s going on, there’s no money and a mountain of debt. Even if you were unsuspecting or deceived, you’re responsible for what your partner does, she said.

Bank Loan Broke

Ultimately, devastated and depressed most of the people in today’s generation seek their escape in drugs. Some people start using cocaine for fun, but it’s highly addictive, the high doesn’t last long and many people escalate to using several grams a day. An eight ball, which is 3.5 grams, costs $150 to $250, or up to $91,250 a year, according to the Pat Moore Foundation, a drug treatment center. That’s clearly a route to going broke, considering the average household income is only $53,657, according to the U.S. Census Bureau. The high cost of these drugs will ultimately leave one homeless and the addiction will then lead them into criminal activities which may lead up their way to the jail. Going to jail definitely, leaves people broke.

Home loans, cars loans, child support and other debts don’t pay themselves, but you still owe. And that outstanding and mounting debt can cause a person to lose everything. And once you are out of jail, the chances to have a change in your financial status are meager.
With not enough money to pay your taxes you can be in trouble: People owe back taxes for many reasons, ranging from honest mistakes and lost paperwork to willful ignorance and tax evasion, said Eckstein.

In most cases, the IRS just wants the money and will work with you. But if you’re blatantly deceptive, don’t stick to payment plans or ignore collection attempts, the IRS can take action that leaves you broke, such as seizing your accounts and garnishing your wages. An attempt to turn the tables around by getting into a relationship with a rich partner is no less than a gamble. Cheating can leave your bank accounts empty.

Depending on how long the affair lasts, the person who is cheating might spend hundreds or thousands on dates, gifts, hotel rooms and flights. Some people even pay their lover’s bills. The average affair lasts six months and costs $444 a month, or $2,664 in total, according to a survey by a U.K. retail company, CNBC reported.

Meanwhile, factor in a suspicious spouse or partner who starts forking over cash to investigate what’s going on a private investigator told CBNC that he charged $100 per hour plus expenses and the costs start to add up. While all this extra spending is occurring, there are still household obligations to cover.

Infidelity is a prime example of how emotion-driven decisions make people go broke. Also, adding an authorized user to your credit cards is risky and could lead you to the poor house. Unlike a joint account holder who is also responsible for repaying debt, an authorized user has the right to spend to the end but isn’t responsible for paying 1 cent. You’re the on the hook for all bills. So the person you are planning to get into a relationship may not be as dumb as you were while on your journey to being broke.

So maybe the next time you go out with your credit card or some cash for shopping you might as well want to remember all the weird ways that can lead you to bring broke and you might want to consider this, Excess material possessions do not enrich our lives.

In fact, buying things we don’t need keeps us from experiencing some wonderful, life-giving benefits. We would be wise to realize the cause and become vigilant in overcoming it. There is more joy to be found in owning less than can ever be discovered in pursuing more.

Frugal living doesn’t have to be a life devoid of fun. In fact, you might be surprised how easy it is to trim your expenses with a little patience and planning. The more you can get out of every dollar you spend, the more money you will have to save for potential emergencies, a college education for your children, vacations to exotic locations, or whatever big ticket item your heart desires.

We are all human and we all sometimes get carried away with our purchases. The key to spending wisely is to cut out as much temptation as you can and test what is important to you. Be prepared, because the process of discovering yourself will take some willpower and you may well end up with some dusty old exercise equipment in the garage. But over time, you’ll learn to stay on track. The next time you want to overspend, you might as well want to reconsider this picture and the reality of life. After all, money does not grow on trees, does it?