Amazon to Start its very on Fleet of Boeing Aircrafts

The retail giant will not get packages delivery via its very own freight aircrafts.

After relying on package delivery companies for year, Amazon.com has finally announced plans of starting its own delivery network. Before getting the packages delivered through drones, the retail giant will be taking to the air a much bigger forms of transport. A deal between Amazon and Air Transport Services Group, an air cargo operator has been signed according to which the retailer will be leasing 20 Boeing 767 cargo planes.  

The deal, announced March 9, 2015 will last between five to seven years. The jets that have been leased by the company can carry up to 88 tons of freight across the country. Following the deal, Air Transport Service Group’s stock went up by 16.65%. 

This fleet of freight aircrafts is expected to ‘operate an air cargo network to serve Amazon customers all across the United States’ and with the help of this partnership Amazon will be able to ship as much as 15% of its orders, according to an analyst at Stephens, Jack Atkins. Presently, the retailer already has its own trucking fleet; with the help of these freight aircrafts the company will move further away from FedEx and UPS, and would not need to rely on them.

Joe Hote, the Chief executive officer of ATSG stated that the air cargo operator has been working with the e-commerce giant since last summer in an effort to serve it with a fully customized air cargo network. Amazon is aiming at reducing shipping costs; last year it spent over $11.5 billion on shipping cost which in comparison to the year before that was up by as much as 32% while in a two years’ time, the shipping cost has been up by 74%.

Despite that fact that the online shopping company reported an increase in sales as well as profits for the previous year, shareholders were concerned regarding the significant increase in the shipping costs. It has been looking at alternate ways to reduce shipping costs and speed up its delivery process. As per this effort, the company made an announcement in December, according to which it has introduced a fleet of thousands of trucks to speed up deliveries.

As per the deal signed between the two companies, Amazon will have a right to buy almost 20% of the air cargo operator. Outside package delivery services will still be used by the retailer, along with the U.S. postal service. This deal had a great impact on the shares of two of Amazon’s competitors, FedEx and UPS as their shares went soaring down after the deal was announced on Wednesday.

The reliance between Amazon and package delivery providers such as FedEx Corporation and UPS has been a long one as these companies have helped get packages delivered to the doorstep of the retailer’s customers. However, this reliance between the two have not always had positive results as many a times there have been cases where packages were undelivered especially during the holiday season.

Apple Fined $450 Million In E-Books Case

The U.S Supreme Court rejected Apple's appeal and settled on paying a fine of $450 million to consumers, states and legal fee.

Apple has been fined $450 million to withdraw from an antitrust suit as the U.S Supreme Court has completely retracted from Federal Court’s verdict. The Supreme Court has denied listening to any argument against the fact Apple’s involvement in the manipulation of prices of electronic books.

Apple Inc. had filed an appeal with the Supreme Court against the verdict that stated that the technology company was involved in over-charging its customers for eBooks. This appeal by the iPhone maker was reject by the Court. As per a court filing in 2014, the iPhone maker had agreed to pay the above-mentioned amount to settle the allegations that were made by U.S Justice Department and a number of other consumers.

As per the settlement, the Cupertino, California based organization has to pay $400 million to the customers that it was over-charging for e-books, over $30 million as legal fees while $20 million to the states. The U.S Justice Department said in a statement that consumers of e-books will also get credits for future eBook purchases.

Bill Baer, the assistant attorney general, said in a statement that the tech giant was ‘knowingly’ involved in overcharging the eBook customers with the help of book publishers but this issue is settled once and for all.

The technology company launched the iBook store back in 2010 in an effort to capture Amazon’s bookstore market. In the eBook world, Apple made this entry in an attempt to dethrone the retail giant however it is quite evident that it didn’t manage to live up to its endeavors as now the company is being forced to pay a handsome amount of money as fine for conspiring with book publishers.

At the time when Apple wanted to dominate the e-book market, Amazon Inc. was known as the loss leader in selling books as it was selling them for a price of $9.99 but nonetheless, it dominated the market.

According to this case, the federal judge found out that Apple was conspiring with five of the best publishers in Manhattan; they were shifting to a system according to which the publishers would set the prices instead of the retailers. Denise Cote, the U.S. District Judge stated that due to this strategy, there was a 40% increase in the eBooks best sellers.

Furthermore, the District Judge also mentioned how the late founder and CEO of Apple Inc., Steve Jobs was questioned at an event while introducing the iPad regarding the high prices of eBooks on the iBookstore. He was asked why someone would pay $14.99 when they can buy the same eBook at a price of $9.99 from Amazon. To this, Jobs replied that the prices would be the same and that the publishers were not happy with selling the books at a rate that Amazon was selling the books.

In its defense, the tech company stated that ever since they have entered the market the competition has enhanced and the prices of these eBooks has fallen. 

Microsoft Eyes On Oracle

Microsoft wishes to give a tough time to Oracle

Microsoft Corporation has plans to make its database servers readily available for the Linux Systems. These servers will be offered to big enterprise giants so that it can give a tough time to the Oracle Corporation.  

As reported by Bloomberg, Satya Nadella, the Chief Executive Officer at Microsoft has initiated this scheme so that the sales of its database domain can increase. Microsoft’s databases allows the companies to store and analyze data.

In compliance with the initiative, the major database pieces belonging to MSFT’s SQL server will be shipped to the Linux Systems- an open source customizable operating systems (OS). This plan is likely to become a reality in the mid of the fiscal year of 2017.

All those companies that are interested in this initiative can sign up with Microsoft from Monday. Other than that, consumers can also get a preview of the product that has been launched on the Ubuntu version of Linux. This is not it but the company also has plans to launch it on the software of Red Hat Inc. and is working on it now.

The concept behind this initiative is to compete with Oracle-the company which is solely dominating the database segment all over the globe. According to the data by the International Data Corporation (IDC) published in 2014, Oracle has succeeded in getting the largest market share in the database management software market which is double of the market share of MSFT.

Thus, the company has decided to add Linux to its offerings will increase the chances of the company to emerge out of its staggering position. The company will not just get the opportunity to sell more services to its corporate clientele but will also enable the company them to approach new clients that are relatively more complicated and have access to high end systems.

Satya Nadelal, the CEO of Microsoft is of the opinion that high end computing is one area where the company’s Window’s server has been stumbling in the past. Thus by incorporating the Linux Systems, the company will get a chance to lure a completely new market. Ironically, this segment has never been tapped earlier.

Microsoft wishes to remain prominent in the market, thus for the same reason it has been increasing its cross platform activities and is now rolling out apps and services on the platform of competitors like Google Inc.’s Android and Apple Inc.’s iOS. It has also made acquisitions of the companies the develops product offerings for competitors.

The company is apparently deploying a low total cost strategy through which it will attract other companies to purchase its servers in contrast to buying extremely heftily priced product servers by Oracle.  This particular strategy has been quite successful in gaining consumers over the past three annum and might just prove to be fruitful for other products and services as well in the times to come.

Hence, it will be a major breakthrough for the company if it delivers as per its claims.

Facebook Inc. Fined In Germany

The social media network has managed to do well in a lot of countries but it should understand that it can't function by its own ways everywhere.

Facebook Inc. might be the social media giant with incredible user growth, financials as well as popularity but on the legal side the networking website has been facing trouble in a number of countries. After have legal issues in India, Facebook has issued a fine of $109,330 (€100,000) as it failed to comply with the terms and condition of user content.

On 9 December, 2016 the social media network was criticized by the regional court of Berlin in Germany regarding the terms that involve German users. As per the clause the users were “grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any intellectual property (IP) content that you post on or in connection with Facebook.”

However, the regional court completely disagreed to this clause and asked the social networking site to change it as the clause gives rights to the company to use the content of the German users or whatever they post on the network. Despite the fact that the court has initially requested the organization to remove that clause from the terms, it failed to comply with it and hence was fined because of that negligibility. Additionally, it has decided to remove that specific clause from its terms and condition and has also agreed to pay the fine.

Berlin’s regional court stated during the latest sentence that a similar problem had been faced by the social website back in 2012 as well where it was requested to alter a clause which seemed to be violating the rights of the consumer. However, after an appeal to the court this clause was removed in 2014 which included the “royalty-free” and “in connection with” terms from it from the users residing in Germany.

This is not the first complaint that has been received against in the region; there have been a number of complaints against the social media network in the European Union countries. These countries are specifically concerned about the user’s data as well as their privacy. They value national security as well as the privacy of their citizens due to which they are keeping a close eye on the US internet along with such tech giants.

Furthermore, the most recent legal problem that the tech giant faced was in India with its Free Basics offer. As per the offer, Mark Zuckerberg was going to provide free internet all across India to people who did not have access to it; evidently it was not only for the benefit of the people on the country but also the company itself. Increased accessibility of internet would mean an increase in Facebook users, so the company was not just doing the people of India a favor. However, this offer was negated by the Indian Regulatory as they stated that it was of no good for the people and gave an unfair edge to the company.

The company did not stop at that, there were a number of promotional campaigns but despite of all the efforts that social media company failed to provide the service; mainly because it violated the net neutrality laws of the country. 

Microsoft Corporation Not Interested In Slack Messaging Platform Anymore

The technology corporation has backed out from its acquisition of the messaging app Slack which it had initially decided to acquire for $8 billion.

For a price of $8 billion, Microsoft Corporation showed its interest in acquiring Slack, a messaging platform similar to that of Skype, on Friday. However, according to recent news the technology giant backed out from that acquisition as Qi Lu, the Vice President of Microsoft’s application and services failed to convince the founder Bill Gates, the CEO Satya Nadella along with a number of other board members to go forth with the acquisition.

The company is widely known for its Windows Operating System however it is trying to direct its efforts towards its video and messaging platform, Skype. Slack, the messaging app that Qi Lu wanted to acquire was launched back in 2013 in San Francisco. This application is quite similar to Skype as it offers file sharing, video and text messaging as well. The sole reason as to why Microsoft was drawn towards the app was that it gained tremendous popularity after its release in 2013.

Presently, Slack has over 2.5 million users out which 700,000 are paying users, according to a research conducted by Statistics Brain Research Institute. Due to this reason, many now believe that the company might have made a handsome amount of revenue in the past two years that it has been operational for; this clearly indicates that putting a price tag of $8 billion on the organization was simply now enough.

The increased popularity of the messaging app indicates that soon enough it will be in direct competition with Skype as it also plans to introduce advanced features to the platform soon. The company is aiming at being big and better if it wants to stand next to Skype hence proving that even if the offer was still on the table, it would have given a serious though and might not have immediately agreed on that price.

The acquisition of Slack would not have been the first one on the technology giant’s part; initially it has acquired Skype back in 2011 for a price of $8.5 million along with another application by the name of Yammer for $1.2 billion. This would have been the third acquisition by Microsoft Corporation. However, Yammer wasn’t a profitable acquisition on the company’s part as it was broken down into various parts to make Microsoft 365.

While many people believe that the acquisition was worth the price tag that the tech organization put on it, on the other hand many believe that it was not even close to that. For example: Facebook Inc. had acquired WhatsApp for a price of $22 billion back in 2014 indicating that it paid a price of $55 per user however if Microsoft has gone forward with the acquisition of Slack at the same price, it would be paying at least 45 times more than what the social media giant paid for its messaging app. Ultimately, it’s quite evident that it was a smart move by the technology business as it saved large capital.

The Redmond, Washington based company can now completely focus on making Skype a bigger and better messaging app and it plays to do so by offering its 74 million users with additional features as well.

Yahoo Inc Let the Bidding Begin!

The search engine giant will be meeting with the activist hedge fund Starboard this week to settle important matters.

The last resort to save Yahoo! Inc. was to save it. The CEO, Marissa Mayer is been packaging a secret deal which is not so secret, to sell the core business of the search engine giant. However, Ms. Mayer has been offering this deal provided she remains the CEO of the company, as per a report by The New York Post.

As per the Post’s news, this deal has been pitched by Frank Quattrone, who is a banker hired by Ms. Mayer additionally they still have not disclosed how many people are interested to buy the core business of the search engine corporation but according to the news, over 40 parties had shown interest to buy the core business of the giant.

Furthermore, the board of directors are expected to meet with the activist hedge fund Starboard Value during the current week. This meeting comes as no surprise as both the parties have been having conversation back and forth. The hedge fund has been on Yahoo’s case for a while not to shake-up its management so that the company comes out of this black hole.

According to a recent letter sent by Starboard to Yahoo, it requested for the dismissal of Marissa Mayer and stated to include majority of Starboard people in the board of the company. It was not as much of a request as a threat as they further stated that if the demands of the hedge fund are not met, they might start a proxy battle.

New York Post states that this could be the last nail in the coffin to start a proxy battle by Starboard. In addition to that, the CEO of Starboard Jeffery Smith has clearly stated that the company needs to be sold now. Due to these reasons, the board is not pondering over whether to include two or more people from the hedge fund to Yahoo’s board.

The turmoil in the search engine giant started ever since Marissa Mayer was made the chief executive officer of the company; however she has taken drastic measures to turnaround the fate of the organization ever since her appointment in July 2012. Those measures have always caused much displeasure to the shareholders of the business.

The CEO as part of a revamp plan made public that she had decided to keep the $30 billion stake in Alibaba Group Holding Ltd but had decided to sell the core web business. Furthermore, the plan includes cost-cutting procedures as well which of course include cutting down the workforce. As per the plan, the company has planned to lay off as many as 1,600 employees by the end of the current year.

Apple Needs To Adjust According To Smartphone Market Saturation

Apple has to enter the low-end smartphone manufacturing to avoid the high-end smartphone market saturation.

Over the past few months, Apple’s stock has been in the mid-$90 range which has risen few doubts among the investors and analysts, although the tech giant reported highly commendable profits and sales of its prestigious current generation iPhones last quarter. Industry experts have expressed that the Silicon Valley business is facing this year’s anticipated “marked slowdown in higher-end, higher-cost devices.” CEO Tim Cook confirmed the slowing sales forecasts. Many analysts believe that highly anticipated crunch of global smartphone market has already commenced.

Overall, year 2015 was not that bad for the iPhone sales. The Connecticut-based research firm, Gartner, reported that in 2015, the company sold 225.85 million iPhones that went up from 2014’s 191.43 million. Another glad tiding for the organization is that during last year, it increased its share in the global market to 15.9% from previous year’s 15.4%.

What is alarming in Apple’s sales is how the year ended for it. The sales estimates forwarded by Gartner do not reflect the units shipped by the tech giant to its large number of vendors. If the sales are examined on those parameters, then Apple’s devices have taken a substantial hit in calendar Q4. The tech behemoth noted, during the conference call that, it “sold 74.8 million iPhones in the quarter,” indicating a 300,000 units bump from previous year’s fourth quarter.

The data compiled by the research firm highlight that currently several million iPhones are placed on telecom providers and retailers. Apple, along with its partners, in fourth quarter 2015 sold around 71.5 million smartphones, which were down from the prior year’s 74.8 million. Apart from marking a year-over-year 3.3 million unit sales decline, the market share of the company came down to 17.7% in 2015 from prior year’s 20.4%.

The only smartphone manufacturer who posted a year-over-year improved sales was Apple’s South Korean rival, Samsung, which crawled up to 20.7% after the tech company sold 83.44 million smartphones. It is more than probable that Samsung is likely to fall prey to the growing smartphone market saturation but it has some better strategies for the future.

The edge for Samsung in the market is apart from offering a wide range of electronics is that it produces and sells low-cost smartphones as well. According to Gartner estimates, “basic and lower-end” variety will hold about “two-thirds” of the global smartphone sales in just three years.  

It is prudent for the organization if it even considers manufacturing iPhones, which are a bit lower in cost and affordable, so that it can easily enter the uncharted territory of low-end smartphones.

At the market which closed on Thursday, Apple Inc. stock stood at a price of $101.50. The 52-week range of the stock is expected to be between $92 and $134.54.