foreign exchange rates

Amazon Somehow Lost $274 Million Selling $13.8 Billion Worth of Stuff

Source: http://gizmodo.com/5954990/amazon-manages-to-lose-274-million-while-selling-138-billion-worth-of-stuff

Amazon Somehow Lost $274 Million Selling $13.8 Billion Worth of StuffIf you thought Amazon’s prices seemed too good to be true, well, it turns out they might be—for Amazon, at least. The company managed to turn $13.8 billion of revenue into a $274 million loss this past quarter. And while a big chunk of that was due to losses at LivingSocial and foreign-exchange rates, all is clearly not well on Mount Bezos.

Amazon remained silent on just how many Kindle devices it has sold, but reiterated that it doesn’t make any money off of the ones that it has. Said CEO and probably Superman villain Jeff Bezos:

“Our approach is to work hard to charge less. Sell devices near breakeven and you can pack a lot of sophisticated hardware into a very low price point… And our approach is working—the $199 Kindle Fire HD is the #1 bestselling product across Amazon worldwide. Incredibly, this is true even as measured by unit sales.”

The approach may be working in terms of moving units, but that clearly has been translating into less and less profit. But hey, that just means you’re getting every bit the bargain you thought you were.

The biggest killer appears to be that LivingSocial investment; while Amazon doesn’t own the daily deals company outright, it has a major stake in its flailing business. One that amounted to a $169 million hit against its bottom line these last three months alone.

Amazon’s going to be holding a call at 5PM EDT to discuss what happened in more detail; we’ll be updating as necessary. For now, though, clearly Amazon looks like a ship that needs righting. Or maybe it just needs to throw off some of that LivingSocial ballast. [Businesswire]

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Friday, October 26th, 2012 news No Comments

The Scariest Thing About Google’s Earnings (GOOG)

Source: http://www.businessinsider.com/chart-of-the-day-google-cost-per-click-change-2012-4

On Google’s earnings call yesterday, some analysts honed in on a particular trend: declining cost-per-click rates, or CPCs.

Google’s ad revenue is determined largely by two factors: the number of clicks on ads (“paid clicks”) and how much advertisers pay for each click (“CPC”). The first number has been rising fast — it was up 39% in Q1 of 2012, compared with the previous year.

But the second number has started to decline, and was down for the second consecutive quarter (as compared with a year ago).

Google said that the factors driving CPC are very complicated, and include foreign exchange rates, rising mobile usage of Google (where advertisers pay lower prices per click), faster growth in developing countries (where prices are lower), and changes in ad quality all have an effect.

Most analysts seem to agree that CPCs, taken in isolation, are not the best measure of Google’s business. But if you’re looking for a reason why the stock went down today, other than the new class of stock the company announced, this might be it.

chart of the day, google cost-per-click change, april 2012

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Friday, April 13th, 2012 news No Comments

Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.

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