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  • techstrategy techstrategy Nov 29, 2012 11:13 PM Flag

    "we make money when people use the Kindle, not when they buy it"

    What's the installed base of Kindles (including Fire) compared to iPads? How has that ratio changed over the past 3 years and 5 years? It was a defensive move people... Start thinking critically and stop buying all the sell side BS (I'll save the cloud critique for another day).

    The idea that a content distributor can earn supranormal profits from non exclusively distributing others' content when competitive distribution channels have broader reach and captive audiences (via iStore and Google Play) is laughable and stupid. But, that what almost every sell side analyst (aside from Gillis, who is the best of the bunch by far) has bought and been reselling. Inane.

    Kudos to Gillis for picking up the shipping cost thread. But, there is much more to it. It will have a much greater adverse impact upon Amazon's business model than anyone is currently recognizing... The are reinforcing feedback loops which will continually and increasingly undermine/degrade the economics of the business model. But, I will cover that another day...

    Sybs, I'm not all in yet. I've learned painfully how extreme these shakeout squeezes can get (though the absurdity here dwarfs NFLX, GMCR and CMG by far).

    Having said that, if I do one thing next year, it will be to end this scam through all legitimate means (e.g. providing critical analysis to the states/pensions/labor unions as how they are undermining their local economies by subsidizing Amazon facilities and by holding direct or indirect investments in Amazon).

    Last year I focused almost exclusively on CMG. The year before GMCR and NFLX. This year, it is all about Amazon for me. It is emblematic of all that is wrong with our capital markets and the funds playing these games have now made it worth my while... My early new year's resolution is to bring all of the collateral damage of scams like this to the attention of the general public, and Amazon is a perfect case study because everyone knows Amazon and everyone knows in their gut that there is something amiss here...

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