David Kirkpatrick

July 12, 2010

Taxing internet sales is still a bad idea

Filed under: Business, Technology — Tags: , , , , , — David Kirkpatrick @ 11:28 am

This PC World article disagrees with me.

From the link (ignore the atrocious grammar in the first sentence):

The Main Street Fairness Act, introduced this month by Rep. Bill Delahunt (D-Mass.), would end the exemption for big Web retailers like Amazon.com and eBay that fear the change would be a body blow to their business. The Web sales tax issue has been debated and litigated for years, and it is hardly a popular cause, but with state and local governments deeply in debt, the chance to add a massive revenue stream may outweigh the political risks.

The seven-term Delahunt will not be running for re-election, but it would be unfair to see the timing as opportunistic. Delahunt sponsored a similar bill in 2008. I don’t enjoy paying taxes any more than the next guy, but Delahunt was right then and he’s right now. The Internet is no longer a baby that needs to be cosseted and protected from the real world, and favoring Internet business over brick-and-mortar ones via a tax exemption is not fair

The author inadvertently makes a point that severely hurts the pro-internet tax argument here:

On the other side are the big Internet retailers, such as Amazon.com and eBay, which have fought hard to maintain a status quo that gives them a marked advantage over local brick-and-mortar merchants. Amazon.com, the largest and best-known Web retailer, has fought efforts to collect sales tax from customers. The company argues that the crazy quilt of taxing jurisdictions — there are approximately 8,500 in the United States — makes doing so impractical.

Nonsense — an industry that can deliver tailored ads to buyers in a fraction of a second could surely solve whatever technical problems exist. And it already has: Reed Hastings, the chief executive of Netflix, told the New York Times, “We collect and provide to each of the states the correct sales tax. There are vendors that specialize in this (we use Vertex). It’s not very hard.” Plus, national brick-and-mortar stores have done this for years.

Um, delivering targeted ads is a top-down affair where the entity serving the ads determines the criteria, runs its algorithms and, hopefully, serves a relevant ad to the site visitor. Meeting the demands of thousands of tax jurisdictions is a bottom-up process where the retailer has to become informed on the exact requirement of each individual tax jurisdiction, meet those requirements with every single transaction and conduct very regular audits to ensure the requirements haven’t changed. The penalty for misapplying any step of the process could be potentially severe. The penalty for not serving a relevant ad? Not much more than a very fleeting missed opportunity.

So meeting the demands of eight thousand-plus tax jurisdictions is nothing like serving targeted ads. Bad analogy and an even worse argument for taxing internet sales.

March 18, 2010

States looking for their cut of e-tailing

Filed under: Business, Politics, Technology — Tags: , , , , — David Kirkpatrick @ 6:20 pm

It’s a terrible idea for a lot of reasons, but this bit from the link pretty much sums up why individual states forcing out-of-state e-tailers to cough up taxes just is not feasible:

Mary Osako, a spokeswoman for Amazon.com Inc., the largest online retailer by revenue, said state-by-state laws are creating a “very complex sales tax regime,” and that the company would only support a “simplified system, fairly applied to all business models.” Amazon is in favor a national streamlined sale-tax effort that would mandate sales tax collection by out-of-state retailers in 23 states that have voluntarily signed on to the program. “We aren’t opposed to collecting sales tax within a constitutionally permissible system applied even-handedly,” Ms. Osako said.

A 1992 Supreme Court ruling prohibits states from forcing retailers without a physical presence in the state to collect sales tax on their behalf. Many states technically require local residents to pay so-called use tax on such purchases, but most taxpayers ignore those rules.

February 4, 2010

Is Amazon in an e-book panic?

Filed under: Arts, Business, Media, Technology — Tags: , , , , , , , — David Kirkpatrick @ 4:12 pm

Yes is a very fair answer. Last week it got into, and lost, a scrap with Macmillan, one of the largest English  language publishers. Possibly because of Apple’s iPad announcement and demo.

From the second link:

It all started last week when Apple CEO Steve Jobs trotted out the iPad, dubbed by some as a Kindle killer. Major publishers voiced their support for the iPad, including Penguin, HarperCollins, Simon & Schuster, Hachette Group, and Macmillan.

Then Jobs showed off one of the iPad’s critical apps, the iBook e-reader, and flashed prices for e-books at around $15. It was a swipe at Amazon.com because publishers (Macmillan being one of them) had been trying to get Amazon.com to raise its e-book price from $10.

And:

On Friday, Amazon.com stunned the publishing world by pulling Macmillan books, both Kindle editions and printed books, from its shelves in an apparent strong-arm tactic to show Macmillan that Amazon.com continues to set the rules. At the very least, Amazon.com wanted to show that Macmillan, which is among the biggest publishers in the U.S., still needs Amazon.com.

One would have hoped that Amazon.com had spent considerable time weighing this decision. Instead, it looked like a giant company suddenly deciding to play chicken with another giant company—and Amazon.com flinched. On Sunday, only two days after pulling Macmillan books, Amazon.com relented.

Now there’s this news from the seemingly flailing e-tailer:

Is Amazon Building a Superkindle?
New York Times, Feb. 3, 2010

Amazon has acquired Touchco, a New York start-up that was developing flexible, transparent, force-sensitive multitouch panels.

The acquisition indicates what Amazon might try to do next in response to Apple’s iPad announcement: a future full-color, more-rugged multitouch Kindle.


Read Original Article>>

January 31, 2010

E-book price issues already cropping up at Amazon

The e-book space should get really interesting over the next year or so. Amazon is dumping Macmillan’s hard copy and e-books over an e-book pricing issue. Right now all e-books are $9.99 at Amazon and Macmillan wants to charge more for e-books at the outset before lowering prices.

This move is pretty significant because here’s part of Macmillan’s roster: “Macmillan is one of the world’s largest English-language publishers. Its divisions include St. Martin’s Press, itself one of the largest publishers in the U.S.; Henry Holt & Co., one of the oldest publishers in America; Farrar, Straus & Giroux; and Tor, the leading science-fiction publisher.” That’s a lot of quality books that Amazon is willing to lose over a couple of bucks.

Is Amazon running scared from looming competition a bit? I’d say yes.

From the link:

Macmillan CEO John Sargent said he was told Friday that its books would be removed from Amazon.com, as would e-books for Amazon’s Kindle e-reader. Books will be available on Amazon.com through private sellers and other third parties, Sargent said.

Sargent met with Amazon officials Thursday to discuss the publisher’s new pricing model for e-books. He wrote in a letter to Macmillan authors and literary agents Saturday that the plan would allow Amazon to make more money selling Macmillan books and that Macmillan would make less. He characterized the dispute as a disagreement over “the long-term viability and stability of the digital book market.”

Also:

But, he wrote, the digital book industry needs to create a business model that provides equal opportunities for retailers. Under Macmillan’s model, to be put in place in March, e-books will be priced from $12.99 to $14.99 when first released and prices will change over time.

For its part, Amazon wants to keep a lid on prices as competitors line up to challenge its dominant position in a rapidly expanding market. The company did not immediately return messages seeking comment Saturday.

Barnes & Noble’s Nook and Sony Corp.’s e-book readers are already on sale. But the latest and most talked about challenger is Apple Inc., which just introduced the long-awaited iPad tablet computer and a new online book store modeled on iTunes. Apple CEO Steve Jobs, in an interview with The Wall Street Journal, suggested publishers may offer some e-titles to Apple before they are allowed to go on sale at Amazon.com

January 28, 2010

Watch out Kindle …

Filed under: Business, Media, Technology — Tags: , , , , , , — David Kirkpatrick @ 1:09 am

the iPad is about to start breathing down your neck.

From the link:

The Kindle DX is the same size as the iPad. It has a black and white E-Ink screen, 4 gigabytes of internal storage, 3G access and costs $489. Meanwhile, the cheapest version of the iPad has a full-color touch screen, a powerful processor and graphics chip, 16 gigabytes of flash storage, Wi-Fi and sells for $499.

The cheaper iPad might not have 3G or the same battery life as the Kindle DX (up to 4 days), but on every other count it wins. It has both a gorgeous screen and vastly more functionality. And, while Amazon has established an excellent, easy way to buy books, iTunes, which already has some 125 million customers, will give it a run for its money.

October 1, 2009

Cloud computing and security

Filed under: Business, Technology — Tags: , , , , — David Kirkpatrick @ 4:16 pm

An interesting overview from Bill Brenner at CIO.com.

From the link, the conclusion:

Having said that, I also agree with Mike Versace that we should offer some basic approaches that ease the learning curve and ask some basic questions. The approach that I’ve been using is what I coined RAIN, which is just a plain old tried-and-true planning and analysis approach with emphasis on interfacing.

  • (R)equirement: understand your business requirements, and derive technical, non-technical, regulatory and security requirements.
  • (A)nalysis: from your requirements, analyze what tasks or services you want to or can outsource, and clearly define which party is responsible for which tasks, to reduce confusion and conflict later; perform risk analysis, especially with respect to cloud connectivity, mutli-tenancy, local data privacy regulations (of your providers), and business continuity.
  • (I)nterface: clearly define system and human interfaces. Who and how to contact providers for services or problems? What API or webpages to use and how, what the returned result should look like? The more interfaces/touch points, the higher the risk for breakages or problems.
  • e(N)sure – verify and ensure services are performed according to agreements. (Validate and boundary) Test the results sent from providers to ensure that they are in the correct formats and are what you expected; audit or pen test services; perform practice runs with your providers.

This is nothing new or fancy, but I’ve witnessed light-bulb moments without glassy eyes when I explained cloud computing challenges with this approach.

In more cloud computing news today, here’s Technology Review and CIO.com on Amazon’s cloud services.

July 1, 2009

Amazon and cloud computing

Filed under: Business, Technology — Tags: , , , , — David Kirkpatrick @ 2:15 pm

Did you know Amazon is in the cloud computing outsourcing business? Me either. Looks like the books and products e-tailer is now offering outsourcing for “a storage service, a compute service, a database service, a messaging service and a payment service.”

Overreach away from a core competency or a great business idea to leverage internal knowledge?