Filed under: Consumer experience, Competitive strategy, Google (GOOG)

Google (NASDAQ: GOOG) has confirmed it will end a 19-month experiment that looked doomed from the start. According to the Wall Street Journal, Google Video, the service that sold and rented the right to watch a wide range of videos for anywhere from a couple of dollars to $20, will stop showing paid programming on Wednesday. The service was expected to underscore Google’s intention to create a revenue-based online video forum, a la YouTube, which Google owns. It obviously didn’t work.

Donna Bogatin of InsiderChatter.com called Google Video a “YouTube wannabe” and jokingly questioned Google’s recent decision to pull the plug on a service where many of their pay-to-see videos were actually YouTube videos on a Google viewer.

To compensate customers who will no longer be able to use the videos they purchased, Google is providing a refund in the form of credits that can be used in conjunction with its online payment service, Google Checkout. Check out the email they sent to users on Cnet news.com. Google declined to reveal exactly how many people purchased videos through Google Video or the total refund amount to its customers, but a spokesman said it would not materially impact the company. With YouTube and hundreds of other websites that provide free clips on the internet, it’s clear that Google didn’t have to cough up a lot of refund credits to the viewing public.

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Filed under: Consumer experience, Competitive strategy, Google (GOOG), eBay (EBAY)

After dealing with Google Inc. (NASDAQ: GOOG)’s “Checkout” online payment and transaction service recently, I came away surprised but not really that impressed. The largest reason? It’s probably in the name — “Checkout.” That’s all Google Checkout allows a customer to do. Is the service comparable to eBay (NASDAQ: EBAY)’s PayPal’s “online bank” look and feel? Not even close.

Now, this is not exactly new news — I realize that. But the comparisons (for about a year now) that have pitted Google Checkout against eBay’s PayPal have made mincemeat out of what does not exist — true competition. PayPal is situated like an online bank. In fact, it operates and lets customers perform bank-like transactions. Sending money, receiving money, using several credit cards for online purchases, printing shipping information to sellers and quite a bit more.

Google Checkout allows paying for online purchases pretty easily, but that’s just about where I see similarities end. I am pretty sure Google Checkout will evolve to take on PayPal, but right now it’s not even in the same league: Checkout’s international limitations (U.S. and UK currencies only) and PayPal’s “bank-like” feel along with a whole gamut of customer-friendly options puts PayPal way (way) ahead of Checkout. Google’s service needs to — has to — do better.

I’m anxious to see what Amazon Inc. (NASDAQ: AMZN)’s recently unveiled Flexible Payments Service will bring to the table. I hope it’s more than Google’s year-old effort.

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Filed under: Consumer experience, Competitive strategy, Google (GOOG)

Google (NASDAQ: GOOG) has confirmed it will end a 19-month experiment that looked doomed from the start. According to the Wall Street Journal, Google Video, the service that sold and rented the right to watch a wide range of videos for anywhere from a couple of dollars to $20, will stop showing paid programming on Wednesday. The service was expected to underscore Google’s intention to create a revenue-based online video forum, a la YouTube, which Google owns. It obviously didn’t work.

Donna Bogatin of InsiderChatter.com called Google Video a “YouTube wannabe” and jokingly questioned Google’s recent decision to pull the plug on a service where many of their pay-to-see videos were actually YouTube videos on a Google viewer.

To compensate customers who will no longer be able to use the videos they purchased, Google is providing a refund in the form of credits that can be used in conjunction with its online payment service, Google Checkout. Check out the email they sent to users on Cnet news.com. Google declined to reveal exactly how many people purchased videos through Google Video or the total refund amount to its customers, but a spokesman said it would not materially impact the company. With YouTube and hundreds of other websites that provide free clips on the internet, it’s clear that Google didn’t have to cough up a lot of refund credits to the viewing public.

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Filed under: Google (GOOG), Politics, Presidential elections

During recent elections, we’ve consistently been told that Google (NYSE: GOOG)’s YouTube is becoming a larger and larger tool for political campaigns and coverage. We heard about the ability to spread a message through viral media and we saw how any poorly performed appearance could come back to haunt a candidate for months.

Recent months, however, have begun to show us the true value of YouTube. Starting with the Democrats’ debate on CNN/YouTube, even the non-geeks and political nerds among us tuned in to watch an important debate. But this wasn’t just a normal debate, it was progressive … to say the least. Everyday people were able to ask questions that were pertinent to their lives, their families, and their money.

Now the Republican party is doing the same. On November 28, Republican candidates will take the stage and debate important issues, again with CNN and YouTube as the primary distribution channels. This is incredibly powerful as it will further establish YouTube as a legitimate website and brand, especially among skeptics who don’t have experience using the site.

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Filed under: Rants and raves, Apple Inc (AAPL), Columns, Crocs Inc (CROX), Stocks to Sell

One of my colleagues at BloggingStocks is Georges Yared, a great growth stock picker who is well-known throughout the investing world. But from reading Mr. Yared’s posts, I’ve found several issues with his thinking as of late.

While he does show discipline to buying below his price targets, I think that some of his ideas don’t make sense for long-term investors and he neglects to explain the risks involved in the potential investments. In a recent post, Yared spoke about two of his favorite ideas: Apple (NASDAQ: AAPL) and Crocs (NASDAQ: CROX).

Apple is indisputably a great company with incredible product momentum. In a recent post, I discussed why I believed Apple is quite exposed to a correction but I had no disputes with the strength of the underlying company. On the other hand, I think that Apple was, and remains, ‘priced to perfection.’ This simply implies that any earnings report or guidance figure which Wall Street interprets negatively will kill the stock. Analysts will be forced to cut earnings per share estimates, thus cutting price targets. To compound the problem, the multiple will be forced to contract due to ‘less operating visibility’ and ’signs of slowing momentum.’ While this certainly isn’t a definite or easily predicted event, the risk remains very viable.

Crocs is a whole different story. The creator of overpriced and ugly rubber beach shoes has been on fire in the last six months, during which it has doubled. While Crocs is similar to Apple in one regard — it’s lofty expectations from the street which it needs to exceed to justify its current price — it’s also very different. Unlike Apple, whose products will do well in any season, especially during Christmas, Crocs remains a one-hit-wonder for the summer months. Although Crocs bulls such as Mr. Yared will argue that Crocs is “the next Nike” and that the company’s new winter shoes will carry the company through Q407 and Q108, I think this is probably wishful thinking.

Similar to every other fad product, proponents argue that this is not a fad and that this product is different. But as Sir John Templeton once said, “This time is different” are among the most costly four words in market history. One needs to look no further than Heelys Inc. (NASDAQ: HLYS) to see a stock that once wore the ‘this time is different’ fad hat.

Unfortunately for Crocs shareholders, when this company breaks it will sink ever-so-quickly. When Crocs buyers realize that their hideous, overpriced beach shoe is no longer the popular thing they will all neglect their Crocs just like they’ve recently done to their sneakers with wheels which were mass produced by Heelys. This problem will be compounded by the fact that Crocs has become increasingly reliant on “Jibbitz” — plug-like themed inserts for Crocs shoes (no, I’m not joking) — for growth. No one will want new Micky Mouse Crocs plugs when their deformed rubber shoes are collecting dust just as quickly as their fanny packs.

Story stocks and growth stocks are fun to invest in and even more fun to write about. It’s nice to know that you are cashing in on the hottest trends in America. But oftentimes there’s the unspoken side story to it all — you’re overpaying for this potential and when these companies cough up you stand to suffer immensely.

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Filed under: Scandals

In addition to numerous misrepresentations about its own company, the management at Usana Health Sciences (NASDAQ: USNA) has also taken to slandering its chief critic, con-man turned gumshoe Barry Minkow. Now Minkow is fighting back.

In a letter to Usana President David Wentz and CFO Gil Fuller also posted on his Fraud Discovery Institute’s website, Minkow writes:

I have struggled over the last several weeks to remain silent in response to the multiple slanderous accusations made by your company in both your SEC filings and public statements. You and your paid supporters have made one false accusation after another, including your
company’s statement in the recent Forbes article:
“We believe everything he [Barry Minkow] says to be false,” Usana spokesman Joseph
Poulos told Forbes.com. “He’s a liar; he’s a criminal — he can’t be trusted.”
Now Mr. Poulos said this on the record to a national magazine knowing it not to be true because even he believes that everything I have said is not a lie or he would have prevented (just to give one example but be assured these examples could be readily multiplied) Mr. Waitley from resigning from the board of directors as our reporting of the non existence of his Masters degree from the Naval Academy was dead on (again just to provide one example).

Of course, anyone following the Usana story knows that Mr. Poulos is, at best, completely out of touch with reality. I recently did a post comparing him to Baghdad Bob. Minkow also shows the first real evidence of accounting fraud at the Salt Lake City multilevel marketing company. Read the letter to see that.

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Filed under: Rants and raves, Apple Inc (AAPL), Columns, Crocs Inc (CROX), Stocks to Sell

One of my colleagues at BloggingStocks is Georges Yared, a great growth stock picker who is well-known throughout the investing world. But from reading Mr. Yared’s posts, I’ve found several issues with his thinking as of late.

While he does show discipline to buying below his price targets, I think that some of his ideas don’t make sense for long-term investors and he neglects to explain the risks involved in the potential investments. In a recent post, Yared spoke about two of his favorite ideas: Apple (NASDAQ: AAPL) and Crocs (NASDAQ: CROX).

Apple is indisputably a great company with incredible product momentum. In a recent post, I discussed why I believed Apple is quite exposed to a correction but I had no disputes with the strength of the underlying company. On the other hand, I think that Apple was, and remains, ‘priced to perfection.’ This simply implies that any earnings report or guidance figure which Wall Street interprets negatively will kill the stock. Analysts will be forced to cut earnings per share estimates, thus cutting price targets. To compound the problem, the multiple will be forced to contract due to ‘less operating visibility’ and ’signs of slowing momentum.’ While this certainly isn’t a definite or easily predicted event, the risk remains very viable.

Crocs is a whole different story. The creator of overpriced and ugly rubber beach shoes has been on fire in the last six months, during which it has doubled. While Crocs is similar to Apple in one regard — it’s lofty expectations from the street which it needs to exceed to justify its current price — it’s also very different. Unlike Apple, whose products will do well in any season, especially during Christmas, Crocs remains a one-hit-wonder for the summer months. Although Crocs bulls such as Mr. Yared will argue that Crocs is “the next Nike” and that the company’s new winter shoes will carry the company through Q407 and Q108, I think this is probably wishful thinking.

Similar to every other fad product, proponents argue that this is not a fad and that this product is different. But as Sir John Templeton once said, “This time is different” are among the most costly four words in market history. One needs to look no further than Heelys Inc. (NASDAQ: HLYS) to see a stock that once wore the ‘this time is different’ fad hat.

Unfortunately for Crocs shareholders, when this company breaks it will sink ever-so-quickly. When Crocs buyers realize that their hideous, overpriced beach shoe is no longer the popular thing they will all neglect their Crocs just like they’ve recently done to their sneakers with wheels which were mass produced by Heelys. This problem will be compounded by the fact that Crocs has become increasingly reliant on “Jibbitz” — plug-like themed inserts for Crocs shoes (no, I’m not joking) — for growth. No one will want new Micky Mouse Crocs plugs when their deformed rubber shoes are collecting dust just as quickly as their fanny packs.

Story stocks and growth stocks are fun to invest in and even more fun to write about. It’s nice to know that you are cashing in on the hottest trends in America. But oftentimes there’s the unspoken side story to it all — you’re overpaying for this potential and when these companies cough up you stand to suffer immensely.

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Filed under: Consumer experience, Competitive strategy, eBay (EBAY)

eBay (NASDAQ: EBAY)’s decision to double its borrowing capacity is being interpreted, for the most part, as a positive move that could be the prelude to a potential material event - a special dividend payout, a share buyback, or merger & acquisition.

But before you run out to place an immediate buy order for EBAY, which traded 47 cents lower to $35.53 late Monday afternoon, here are a few points of caution that encourage one to reflect before parting with one’s earned cash.

-First there is the online auction space: there’s discussion in online and e-commerce circles that the online auction space is approaching saturation - or at least is going through a period of stagnation - in the developed world markets [primarily North America and Europe]. For one, convenient short-hand barometer of this, the reader can scan the covers Time or Newsweek magazine. Q: When was the last time eBay or a comparable auction site was featured as “the rage” on the cover, the way, for example, the iPod has been? Also, can you think of 2 or 3 industry sources who make reference to “the burgeoning / exploding-growth online auction space”? Further, with the developed markets likely to register less-than-moonshot growth results in the immediate years ahead, it remains an open question whether eBay and other sites can replace double-digit growth with Asia-based [particularly China-based] growth.

-Second, and equally significant, there is the current stock market, which those in the Concrete Canyon refer to as “the current equity market climate.” Frequently, share buybacks are interpreted as positive events for companies and shareholders, as they’re often viewed as a company seizing the day to buyback its undervalued shares - shares that are at a bargain price. Still, investors need to keep in mind that a company’s buyback decision looks good only if, in fact, the company’s shares were undervalued. If, in fact, the shares continue to fall, the decision will not look so good.

Have you seen eBay’s price recently, say since mid-2005? It’s not up. That fact, combined with the facts that the U.S. stock market is long overdue for a 10% correction, that correction may have already started, real interest rates and credit risk premiums are rising, oil prices remain at near-record levels despite oil producers’ willingness to sell every drop, the U.S. economy may be slowing, and that the U.S. Federal Reserve shows few signs that it will lower short-term interest rates soon, present an environment that will make it hard for many stocks to rise - headwinds you may wish to contemplate before plunking down that cold, hard cash right now on eBay.

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Filed under: Scandals

In addition to numerous misrepresentations about its own company, the management at Usana Health Sciences (NASDAQ: USNA) has also taken to slandering its chief critic, con-man turned gumshoe Barry Minkow. Now Minkow is fighting back.

In a letter to Usana President David Wentz and CFO Gil Fuller also posted on his Fraud Discovery Institute’s website, Minkow writes:

I have struggled over the last several weeks to remain silent in response to the multiple slanderous accusations made by your company in both your SEC filings and public statements. You and your paid supporters have made one false accusation after another, including your
company’s statement in the recent Forbes article:
“We believe everything he [Barry Minkow] says to be false,” Usana spokesman Joseph
Poulos told Forbes.com. “He’s a liar; he’s a criminal — he can’t be trusted.”
Now Mr. Poulos said this on the record to a national magazine knowing it not to be true because even he believes that everything I have said is not a lie or he would have prevented (just to give one example but be assured these examples could be readily multiplied) Mr. Waitley from resigning from the board of directors as our reporting of the non existence of his Masters degree from the Naval Academy was dead on (again just to provide one example).

Of course, anyone following the Usana story knows that Mr. Poulos is, at best, completely out of touch with reality. I recently did a post comparing him to Baghdad Bob. Minkow also shows the first real evidence of accounting fraud at the Salt Lake City multilevel marketing company. Read the letter to see that.

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Filed under: Bad news, Consumer experience, Economic data, Media World

We are awash in numbers, but as a visual species, we often turn to pictures to convert data into information. The Universities of Sheffield (U.K) and Michigan (U.S.) have partnered to produce a number of maps that clarify many world distributions, including trade, disease, population and income. They reveal in a disturbingly dramatic way the truth hidden in cold statistics.

Their site, Worldmapper, offers maps on subjects such as trade, natural resource distribution, income, education, violence, pollution and transportation. Check it out; the results are quite sobering.

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