T-Mobile and AT&T Merger Called off

T-Mobile will not be bought by AT&T. Sub-headline: Opposition from the Obama administration over competition and job losses proves too big to overcome. The companies say more capacity to handle growing mobile usage is needed. Sprint is a winner; shares jump.

I guess we will never see this product realized:

AT&T and T-Mobile called off their $39-billion merger late today, a move that could cost AT&T $4 billion before taxes in cancellation costs, trim revenues for investment banks by $150 million and give Sprint Nextel another shot at becoming a true player in the mobile market.

The AT&T’s purchase of T-Mobile from Germany’s Deutsche Telekom would have made it the nation’s largest cellphone company. AT&T is now the country’s second-largest wireless carrier; T-Mobile is the fourth-largest. But it’s not going to happen because critics said the deal was anti-competitive.

Sprint shares jumped 6%, or 13 cents, to $2.29 because investors bet the company would be better able to compete against AT&T and Verizon Wireless, the joint venture of Verizon Communications and British telecom giant Vodaphone.

It Pays (literally) to look good

A 20 year study shows that good looking people get paid more:

In his book Beauty Pays, published by Princeton University Press, he claims good looking people enjoyed perks beyond their pay – such as party invites, business travel and office privileges – while less attractive workers are overlooked and can often be victims of discrimination.

Attractive people are more likely to be happier, earn more money, get a bank loan (with a lower interest rate) and marry equally good looking partners.

As a result, attractive employees are more productive, leading to higher sales and potentially higher profit for themselves or the company they work for.

Less cut and dried is what constitutes attractiveness. Far from being merely in the eye of the beholder, Professor Hamermesh points to a few subconscious factors – such as the symmetry of the face, facial expression and popularity factors (if the person looks like someone popular or famous).

Many companies pay no income taxes

I’ve posted about it before in blog and video but I’m just reminding y’all: a lot of corporations don’t pay any income taxes… Now, I think no one should be paying taxes on money they earn cuz that’s stupid (you should be taxed on what you spend, not earn) but thats everyone. Not special breaks for some.

The corporate tax rate is 35%. But an examination of 280 of the nation’s largest corporations suggests that many aren’t paying anything close to that.

The real tax rate paid by a slew of major corporations averages closer to 18.5%, according to a study released Thursday by two liberal tax research groups.

The report issued by Citizens for Tax Justice and the Institute on Taxation and Economic Policy paints the corporate tax code as wildly inefficient, filled with loopholes and subject to the influence of lobbyists who carve out special provisions for the companies they represent.

The study looked at 280 companies in the Fortune 500 that were profitable for all three years between 2008 and 2010.

The results: 111 companies paid effective tax rates of less than 17.5% over the three-year period; 98 paid a rate between 17.5% and 30%; and 71 paid more than 30%.

The average rate? 18.5%.

Some companies paid zero. And 30 actually owed less than nothing in income taxes over the three years.

Lower the tax rate and close the loopholes. Problem solved.

Apple products were overpriced from day 1

Apple Co-founder Steve Wozniak reveals a lot in this interview, but his discomfort with Steve Jobs’ profit plan in the beginning days are specially interesting. Not only because it confirms the price hiking profit plan but because it shows that that was the whole idea from day 1.

“Steve had a background working in computer stores buying stuff cheap and selling it for a lot more. I was shocked when he told me how you could buy something for 6 cents knowing he could sell it for 60 bucks. He felt that was normal and right, and I sort of didn’t. How could you do that? I was not for ripping people off. But then we started Apple and I went with the best advice which is that you should make good profit in order to grow.”

It really illustrates how wealth can be created from thin air. Just like that. There’s nothing, and then some sharp mind comes along and turns it into something. and then a bigger something. and then a billion somethings. Pretty awesome.

Woz talks more about his non-profit state of mind vs Jobs’ profit-centric mindset, which is particularly interesting considering Woz was the one with the tech employment and Jobs’ was the one working with plants in a commune.

I never wanted to run a business. I had a perfect job for life at HP. I went to club meetings every week and I passed out my schematics for the Apple I, no copyright, nothing, just “Hey all you guys here is a cheap way to build a computer.” I would demo it on a TV set.

Then Steve Jobs came in from Oregon, and he saw what the club was about, and he saw the interest in my design. I had the only one that was really affordable. Our first idea was just to make printed circuit boards. We could make them for 20 dollars and sell them for 40 or something like that. I had given the schematics away. But Steve thought it could be a company.

This was actually our fifth product together. We always were 50-50 partners. We were best friends. We first did the blue boxes. The next one I did was I saw Pong at a bowling alley so I built my own Pong with 28 chips. I was at HP designing calculators. Steve saw Pong and ran down to Atari and showed it to them and they hired him. Whether thought he had participated in the design, I don’t know and I could not care less. They offered him a job and put him on the night shift. They said he doesn’t get along with people very well, he’s very independent minded. It rubbed against people. So they put him on the night shift alone.

Our next project was when Steve said that Nolan (Bushnell, head of Atari) wanted a one-player game with bricks that you hit out. He said we could get a lot of money if we could design it with very few chips. So we built that one and got paid by Atari.

I’m allegedly related to Nolan Bushnell, though I forget how the family tree works out in that regard since it was explained to me.

Woz was also asked about the legend that Steve Jobs cheated him out of some money in that first computer deal.

The legend is true. It didn’t matter to me. I had a job. Steve needed money to buy into the commune or something. So we made Breakout and it was a half-man-year job but we did it in four days and nights. It was a very clever design.

The next project we did together was we saw a guy using a big teletype machine that cost as much as a car hooked up to a modem dialing in to the Arpanet. You could get into 12 universities and log in as a guest and do things on a far-away computer. This was unbelievable to me. I knew you could call a local time-sharing company. But to get access to university computers was incredible. So I went home and designed one myself. I designed a video terminal that could go out over the modem to Stanford and then on to the Arpanet and bring up a list of university computers.

The far-away computers would talk in letters on my TV set. Instead of paddles and balls in Pong, I put in a character generator. The terminal was very inexpensively designed. We sold it to a company called Call Computer. They now had a cheap terminal. Steve and I split the money.

When the interviewer raised the seemingly odd partnership between the two Steve’s, Woz said they weren’t all that different in his mind.

We were very similar. We would hunt through stores in Berkeley looking for Dylan bootlegs. Steve was interested in computers, and he really wanted to find a way to build a computer out of these new devices called microprocessors. He thought that someday they could replace big computers and everyone could have their own computer relatively cheap. Steve had a background working in computer stores buying stuff cheap and selling it for a lot more. I was shocked when he told me how you could buy something for 6 cents knowing he could sell it for 60 bucks. He felt that was normal and right, and I sort of didn’t. How could you do that? I was not for ripping people off. But then we started Apple and I went with the best advice which is that you should make good profit in order to grow.

Steve was willing to jump right into that. Mike Markkula was the mentor who told Steve what his role would be in Apple, and told me mine. He was the mentor who taught us how to run a company. He’s very low-key. He stays out of the press and he’s not that well-known. But he saw the genius in Steve. The passion, the excitement, the kind of thinking that makes someone a success in the world. He saw that in Steve.

Mike Markkula had worked at Intel in engineering and marketing. He really believed in marketing. He decided that Apple would be a marketing driven company. He was introduced to us by Don Valentine. Don had come to the garage and I ran the Apple II through its paces and he said, “What is the market?” I said, “A million units.” He asked me why that was and I sad, “There’s a million ham radio operators and computers are bigger than ham radio.” We didn’t quite get the formula. Steve Jobs and I had no business experience. We had taken no business classes. We didn’t have savings accounts. We had no bank accounts. I paid cash at my apartment — I had to, because of bounced checks.

Woz left Apple in the mid 80s to start his own company but remained an Apple employee all these years and receives a salary of 200 bucks every two weeks.

It will never happen, but I would like to see him replace Tim Cook (Apple CEO) as the event host rolling out new products. Cook didn’t look like he’s into it or wanted to be there in that role in his first try while Steve Jobs was alive but recently resigned. Woz could do it and could breathe new life into it.

Steve Jobs: Hipster but Capitalist

Mr. Jobs, the adopted son of a family in Palo Alto, Calif., was born on Feb. 24, 1955. A college dropout, he established his reputation early on as a tech innovator when at 21 years old, he and friend Steve Wozniak founded Apple Computer Inc. in the Jobs family garage in 1976. Mr. Jobs chose the name, in part, because he was a Beatles fan and admired the group’s Apple records label.

I am glad he at least lived long enough to see The Beatles on iTunes. I thought it was silly that they made such a big deal out of it until I learned that it was a long struggling goal of Steve’s for many years and why.

Steve Jobs was Apple. He left Apple and Apple floundered. He came back in 1997 and made Apple boom. The company now produces $65.2 billion a year in revenue compared with $7.1 billion in its business year ending September 1997.

The prediction was just made on my Facebook that the Occupy Wall Street protest for socialism currently under way will probably include Steve Jobs memorializing since many of the protestors use and love his products. This would be wildly hypocritical.

I will be hugely insulted if those Occupy Wall Street protesters turn their anti-capitalism of rich people protest into a “oh, but not the one we deemed as being okay” addendum. fuck them. Steve Jobs spent his money better than any “Progressive” government has – and that includes his many donations to Progressive causes and candidates.

He made the products that hippies and hipster socialists use and love by the means that they protest: being non-union, utilizing corporate tax breaks and moving large operations overseas because it’s cheaper to manufacture and operate there.
His employees loved the hell out of him and he wasn’t evil and he wasn’t “greedy” just like the majority of the other CEOs and corporation founders who are responsible for the products and services we use and love.

Its because of people like them and non-“progressive” business practice like that that middle class income earners have the option of buying a hand held computer and telephone that can capture, store and send through the air high definition pictures and video all on a higher resolution screen than any television their parents ever owned growing up for $200 + a phone service contract.

It will be wildly hypocritical and insulting if anyone participating in the Occupy Wall Street protests publicly memorializes Steve Jobs. It would be nothing but flaunting their elitist douchebaggery. “we miss and love THIS billionaire whom we all benefitted from – but not the rest of you pigs! now join me, brothers and sisters in our fight to stop the next Steve Jobs from growing his business!”

Occupy Wall Street is a protest to prevent the Steve Jobs’ of the world from benefiting by serving humanity – which is what capitalism is. It’s the only philosophy that says (to quote myself):

Do what you want. do nothing if you want and the government won’t force you into action. but if you want nice things… you can’t just steal them from other people. if you want services from other people you can’t just force or enslave them – you must give them something they want to GET something you want. SO… if you want these wonderful advantages in life and if you want to be able to have the stuff and experiences your heart and mind desire: you can only do it by serving your fellow human being. Only by creating or providing something that someone wants can you amass wealth. Only by taking risks with your capital to make more of it can you become wealthy.

You have a choice. There are no guarantee’s except in your freedom to try.
Except when you DO try, you’ll find how true the wisdom of Yoda was:
Do. or do not. There is no “try”.

UPDATE: Judge Napolitano on Steve Jobs, Free Market Hero

Netflix plays Soloman and cuts their baby in half. Wisdom? or Disaster?

Why is Netflix pulling open the wound they created by increasing their prices? The company announced that they will be splitting Netflix.com into two separate services that are completely independent of each other despite sharing a parent owner: Netflix.com will be for watching streaming media only and the new Qwikster.com will be for DVD’s by mail and will also include video games for the first time.

On the Youtube page for the video, user CtrlAltDan says:

“So let me get this straight. Now I have to manage two separate queues on two different websites, my DVD queue won’t tell me when something becomes available on instant, I get two different lines on my CC bill from two different companies, my ratings of a movie on my DVD queue won’t influence recommendations on my instant queue, have to update my CC information in two different places, and keep track of two different logins. On the plus side, I get to pay more!!”

The only part I like about this is the branding, because I have a thing about brand names reflecting their product and “Netflix” never quite fit a DVD by mail service, so I thought it was brilliant when they started the online streaming. It was as if that was the plan all along. hmmm…. But Qwikster? Wtf is that? Netflix = Internet Movies. Qwikster = fast…things. huh? Good thing no one besides me cares.

In an apology video, the founder and some-other-guy say sorry for “the way” they told everyone about the price increases. Super bizarre since no one complained about the delivery – it was the actual price hike that was the problem. This video says that if only they explained it better then it would have gone over better but they still don’t explain anything. They just use vague terms, pretty much saying “this will be a good thing because it’s good. don’t worry about it”. Not helpful.

TheOatmeal sums up the split pretty accurately, but it raises more questions than it answers. It seems obvious to me that there is more going on behind the scenes here, but I don’t know exactly what yet, though here is an interesting theory from Bill Gurley:

So here is what I think happened with Netflix’s recent price change (for the record, I have no inside data here, this is just an educated guess). Netflix has for the past several years been negotiating with Hollywood for the digital rights to stream movies and TV series as a single price subscription to users. Their first few deals were simply $X million dollars for one year of rights to stream this particular library of films. As the years passed, the deals became more elaborate, and the studios began to ask for a % of the revenues. This likely started with a “percentage-rake” type discussion, but then evolved into a simple $/user discussion (just like the cable business). Hollywood wanted a price/month/user.

This is the point where Netflix tried to argue that you should only count users that actually connect digitally and actually watch a film. While they originally offered digital streaming bundled with DVD rental, many of the rural customers likely never actually “connect” to the digital product. This argument may have worked for a while, but eventually Hollywood said, “No way. Here is how it is going to work. You will pay us a $/user/month for anyone that has the ‘right’ to connect to our content – regardless of whether they view it or not.” This was the term that changed Netflix pricing.

With this new term, Netflix could not afford to pay for digital content for someone who wasn’t watching it. This forced the separation, so that the digital business model would exist on it’s own free and clear. Could Netflix have simply paid the digital fee for all its customers (those that watched and not)? One has to believe they modeled this scenario, and it looked worse financially (implied severe gross margin erosion) than the model they chose. It is what it is.

It’s interesting…but if it’s true, why wouldn’t THIS be the content of that lame video above? Why wouldn’t Netflix explain that this is the case so everyone can get pissed off at Hollywood studios instead of porr Netflix trying to meet their demands while continue a great service? Something doesn’t add up here…

Is Blockbuster really the answer? I recieved this mailer yesterday and have been seeing similar ads to this online:

(details of price and services on the other side)

From PRNewswire:

Blockbuster L.L.C. today began rescuing upset Netflix® customers by launching a limited time, nationwide promotion for all Netflix customers who switch to Blockbuster Total Access™.

Blockbuster Total Access provides benefits Netflix doesn’t offer: availability of many new releases 28 days before Netflix; unlimited in-store exchanges; games for XBOX 360®, Playstation3™, and Nintendo Wii™, and no additional charge for Blu-ray™ movies.

As part of Blockbuster’s ongoing efforts to provide the ultimate in convenience, choice and value, Netflix customers who switch to one of Blockbuster’s two most popular Total Access plans will receive a 30-day free trial. After the free trial, customers will continue to receive Total Access for a new everyday price of only $9.99 per month for “1 Disc” at a time or $14.99 per month for “2 Discs” at a time.

“Blockbuster quickly responded to the cries of Netflix customers,” said Michael Kelly, president of Blockbuster. “Blockbuster Total Access is Netflix ‘without the wait.’ The combination of DVDs by mail and unlimited in-store exchanges provides more than 100 million people living near Blockbuster stores immediate convenience and unparalleled choice.”

Many Netflix customers have voiced their frustration about the Netflix price increase on Twitter by posting “Goodbye Netflix, Hello Blockbuster!”

“We find it shocking that anyone would raise rates as high as 60 percent,” Kelly added. “In contrast, Blockbuster has worked hard over the past few months to deliver value in entertainment to consumers in this economy and has even reduced in-store movie rentals to as low as 49 cents.”

This special offer for Netflix customers is available through Sept. 15, 2011, in participating stores and at Blockbuster’s website.

Glenn Beck is both Huge and Tiny

Glenn Beck has taken his television show to the internetz and is showing early success and a shitload of expansion. Deadline New York warns with this headline saying “Analyst: Media Execs ‘Should Be Very Afraid’ of Glenn Beck’s Web TV Launch.”
Should they really? First, a pictorial:
In the media images for GBTV on Becks news site TheBlaze, they show his set is a mix of his 2 Fox News sets (he switched studios during the time his show was on the air there) combining the newsroom theme with the living room “fire side chat” theme.

The only thing is that that monitor is only obviously a monitor at first glance in the picture above. The rest of the images messed with my mind as they showed a giant Beck, Godzilla-stomping among regular sized people while in another he appears to be tiny, sitting on a table in front of normal humans in the background, since it’s not immediately clear that one is an image on a large screen.

I found the pictures to be metaphorical since it is true that in a celebrity and public influence and following sense, Beck is both huge and tiny.

Consider a comparison to Oprah, who also left her popular daily television broadcast to start her own network (titled OWN, as it were): On the one hand, Beck is no where near the celebrity that Oprah is – however… This Wall Street Journal article says that GBTV already has more paid subscribers than OWN has total viewers… whoah..

Because Mr. Beck owns the show and the network, he could make substantially more than the $2.5 million salary he got each year at Fox. GBTV is on track to take in more than $20 million in revenue in its debut year, according to a person close to the company.

The television industry will be watching closely to see whether the TV host can preserve his popularity while migrating to the Web, where efforts to get consumers to pay to watch online-only channels are just beginning.

When Mr. Beck announced GBTV in June, the network had 80,000 subscribers. In the months since, GBTV subscribers have swelled to more than 230,000, according to people close to the network, even though Mr. Beck‘s show hasn’t yet begun.

The audience is far less than the more than 2.2 million daily viewers his program on Fox drew, on average, over its 27-month run, which ended in June after clashes with the network’s management.

But it is more than the average 156,000 people who were watching the Oprah Winfrey Network in June.

The thing to consider however, as any Youtube personality like myself can confirm, is that the number of subscribers does not equal the number of viewers. How to compute the difference between the two, I don’t know, but if they’re paying it is kindov secondary to ask “are they actually watching?”. And boy are they paying…

Analyst Rich Greenfield of BTIG Research estimates that GBTV is already generating revenues of $27 million a year from subscription fees by monetizing a mere 1 percent of the total audience for his Fox show, his radio show, his websites (glennbeck.com and theblaze.com) and other outlets.

Mediate sums it up this way:

While Beck’s online venture is still relatively new, it’ll continue to be interesting to observe the different trajectories GBTV and OWN take as they forge their way. Here are two networks, albeit on different platforms, begun by two individuals who are themselves highly recognizable mega-brands. One is gradually building an audience as another is still hoping to find its place on television, and both depend highly on the trust viewers place on their respective founding personalities. Could you imagine what an episode devoted to Beck’s “favorite things” might pan out? Sales of chalk could go through the roof.

Glenn Beck… the tiniest giant in media?…

Amazon terminates California based Affiliates in response to proposed California tax

I’ve been an Amazon.com Affiliate (making money from Amazon ads) since 1997. This morning I received an email that I would no longer be part of the program because I live in California and Californians are assholes. More specifically: Californians are hippie Socialist assholes who elect hippie Socialists to every level of government and look to fix their failed economic system by taxing the people who work so they can give more to those that don’t. In response to what has been called the “Amazon tax”, taxing purchases made online, Amazon.com has decided to terminate all California Affiliate advertising.

Instead cutting the ridiculous entitlements that I have witnessed at least a dozen people take complete illegitimate advantage of or encouraging economic growth, the state is sticking to it’s guns on punishing workers.

It may not completely affect me because I registered my LLC in Texas precisely because of California’s anti-business tax policies so I will just switch my Amazon account to the Texas address – HOWEVER… Texas is currently negotiating the same law. Whaaaat? chyea… It’s been delayed and an alternate deal proposed and there looks like there is hope..maybe…but not definite. Still though: what the f#ck about everyone else who DOESN’T have an option to reassign the state in their accounts? California doesn’t have the same hope that Texas has of this getting reformatted. Californians are screwed. California screwed. Cali-fornicated. Thanks a lot California Liberals. You guys suck.

Here’s the message:


For well over a decade, the Amazon Associates Program has worked with thousands of California residents. Unfortunately, a potential new law that may be signed by Governor Brown compels us to terminate this program for California-based participants. It specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited to those referred by California-based marketing affiliates like you – even if those retailers have no physical presence in the state.

We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.

As a result, we will terminate contracts with all California residents that are participants in the Amazon Associates Program as of the date (if any) that the California law becomes effective. We will send a follow-up notice to you confirming the termination date if the California law is enacted. In the event that the California law does not become effective before September 30, 2011, we withdraw this notice. As of the termination date, California residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com. Please be assured that all qualifying advertising fees earned on or before the termination date will be processed and paid in full in accordance with the regular payment schedule.

You are receiving this email because our records indicate that you are a resident of California. If you are not currently a resident of California, or if you are relocating to another state in the near future, you can manage the details of your Associates account here. And if you relocate to another state in the near future please contact us for reinstatement into the Amazon Associates Program.

To avoid confusion, we would like to clarify that this development will only impact our ability to offer the Associates Program to California residents and will not affect their ability to purchase from Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com.

We have enjoyed working with you and other California-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to California residents. We are also working on alternative ways to help California residents monetize their websites and we will be sure to contact you when these become available.


The Amazon Associates Team