The Immigrant Song

MyGallons.com: DO NOT WANT

 

So gas is expensive, right?  wouldn't it be cheaper to buy it at a lower price than it is now?  Yea!  Let's do that! Psfk.com suggests “The only potential downside to this program is if gas prices go down, which is of course, very unlikely.”

That's the basic idea behind MyGallons.com except that as with all miracles of the pocketbook, there's a catch.  Several, actually.  One thing I didn't expect was that there are actually a large number of places that accept the weird "voyager" debit card that powers mygallons.com, so acceptance is not the issue.  What could it be?
Fees.  Lots and lots of fees.  And also, you're not a commodities trader.  I promise to follow up with an investigation of what scenarios would make this work, but I am skeptical that many exist, and even more skeptical that a consumer could detect such scenarios.

So, the Fees and the Problems:

1. The first of many fees is the membership fee: *Cost of annual membership is $29.95 when enrolling in the auto-refill program. Cost of annual membership is $39.95 for the manual refill program.
2. If you go over your balance on the card, it’s an “overdraft” fee of $15. Plus, you have to pay the going rate for the gallons you “overdraw” which means you’re not saving any money
3. They charge you to send them money: $1.95 fee for processing the reload of your MyGallons Card when using a credit card to pre-purchase the fuel.
4. You probably didn’t have the foresight to enroll 6 months ago, so in order to save more than the fees gas has to skyrocket after you purchase fuel. How are your commodities trading skillz?
5. The method for calculating the price gallon at time of purchase (since you load up your card with gallons but they may make adjustments based on the average prices in your 'hood) is a BLACK BOX.  Danger.

Watch out, car-driving America.

Link: Mygallons.com FAQS.

across_the_curve_031808.pdf (application/pdf Object)

This is interesting [pdf].(Written by Bear Stearns economists earlier this week.)

Near the end of the newsletter, “It is only a pity (and from our perspective that is a massive understatement) that the Fed did not hike rates more rapidly in 2004 and 2005, which would likely have headed off the rise in leverage and the boom in mortgage lending.”

It is so strange when a firm with extremely aggressive leverage, who would have claimed at the time, “Leave us alone-markets work!” meets a post-facto desire for regulation. Sigh.

How to Negotiate - Tips for Yahoo!

Found this via twitter.  I think this is entertaining as well as kinda insightful.  I think the best insight its the lesson that this is an interpersonal situation as much as a business situation.   That, and "how do you monetize Liberia?"  Reminds me of an old Dennis Miller Live bit where he would put these photos on the screen and give a caption.  One of them was Bill Gates sitting on the dais at some trade show or another gesturing as he spoke, and the caption was "Canada?  Buy it.  Next question."

 

Blodget now clamoring for Mozilla to go public

As if the C|Net reverse acquimerger posts were not goading us enough, how we have posts arguing in favor of a Mozilla-Firefox IPO on Silicon Alley Insider.  Forgetting the valuation question (because an ethical/moral argument should trump a financial one, anyway), Blodget dismisses the idea of a "public trust"

Yes, it's nice to have a free, high-quality tool that isn't plastered with ads or hooks into other products, but the idea that this is a "public trust" in the same vein as a National Park or Social Security is silly.

It's not silly.  For a generation of hackers, nerds, techies, and wunderkind, profit motive, combined with the public financial market, has not necessarily been the organizing principle of choice.  In fact, the mozilla position is in the spirit of the IETF and the original internet RFCs, UseNet, IANA, or today's Wikipedia. 

Blodget scores when he says Mozilla has been  "investing in user happiness" but if it happens to take a for-profit entity owned by a not-for-profit in order to make it all work, whose fault is that?  Could it possibly be the mess created by the megacorporations of the world?

Maybe I'm being a little idealistic this morning because Obama won the Iowa caucuses, but I support Mozilla's position.

 

SAI has Jumped the Shark

I was sick yesterday and am staying home today, but this is just too hilarious.  Really?  You can just offer tohave a big cmpany buy you and then take it over? 

you heard it here first: SAI has Jumped the Shark.

Link: Announcing Our Friendly Offer For CNET - Silicon Alley Insider.

The End of the Diversified Media Company?

How valuable is is to have assets over a variety of businesses?  Do economies of scale and especially scope really exist?  I think it is interesting what is happening this week.

Previously I blogged about IAC breaking up- essentially this is a vote for "yes" and a vote for "no" because the breakup into five separate companies suggests that the value of the parts individually is higher than the value of the whole.  Barry Diller also said that IAC

needed [the transactional businesses like Ticketmaster] earnings to allow us to invest in emerging Internet businesses. Now that we have real scale in the pure Internet units, it makes nothing but sense to me to reorganize the whole.

So essentially, having TV, internet, real estate, and retail assets all together under one roof wasn't maximizing shareholder value after all.

What are other firms doing?  Try GE. General Electric's NBC Universal unveiled a sweeping campaign last night during the Sunday Night Football broadcast of the Eagles-Cowboys game aimed at  "entertaining, informing and empowering Americans to lead greener lives."  But was anyone watching?

I would be surprised if this was not one of the top games in ratings this season.  The campaign, NBC Green is Universal, will turn the NBC logo on virtually all of its TV channels (cable and broadcast) Internet properties(excluding MSNBC),  green for one week to coincide with eco-awareness programming.  I don;t know what Matt Lauer was doing near the arctic circle, but apparently the earth is getting warmer :)  It's "Green Week" at Claire's high school on Heroes. 

The models on Deal or No Deal will be  wearing recycled parachutes.  Jay Leno shows you how to clean a green sink in an eco-friendly way.  Even as CNBC was reporting that Citigroup stock was probably headed lower, there was Eco-Awareness brought to you by NBCU. GE announced this on October 23, apparently.

It's going to be hard to avoid all of this, as NBC is everywhere, but I think the only thing this proves is unified campaign launches across platforms can be done well, with the added benefit that we decide to tell all our bosses to buy that $2,000,000 GE HVAC unit for the office park because it's 20% more efficient and uses 16% renewable resources (i made those figures up- all of them).  GE  named Ann Klee Vice President for Environmental Programs today!  All this seems more to be happening for corporate PR value and brand equity than any DR/commerce advertising.

Times are just as challenging for other large media companies.  The AOL/TW merger never produced the kinds of scale and scope ecomies and leverage promised to investors. Viacom spun off CBS radio in an apparent loss of faith  in the radio business's  fit with its other assets. 

Maybe all of these are examples of businesses with strong positions but weak strategic frameworks.  Are software/tech companies like Microsoft and Google doing this better than others?  In some sense, it seems like their model isn;t much different- using a cash cow (Windows OS/office software for Microsoft, search for Google) to lever into other lines of business.  Time will tell.

IAC to Split Into Five Businesses

Is this a sign that the super-conglomerate diversified media company?  Or is it just that THIS...is the business we've chosen....

Link: Diller's IAC to Split Into Five Businesses - WSJ.com.

follow up on NextMadison Ave: Book recommendation

At NextMadisonAve Michael Hurt from Microsoft suggested that people take a look at Porter's Strategy, which is largely viewed as a definitive work on corporate strategy.  For a really interesting look at why some strategies succeed and others fail, especially when it comes to new technologies, I would suggest folks check out Michael Raynor's The Strategy Paradox, which includes in particular a discussion of why Microsoft has been so successful over the years.

Mr. Hurt admitted that Microsoft has to struggle with the idea of whether it is a software company or an internet company.  He also used the term "audience company" but I think one still needs to account for the idea of where one thinks the audience is, and many strategy scholars would see successful strategies as being built on a bet about where the audience is: the desktop or the internet, for example. Raynor points out that the beauty of Microsoft has been that senior management (C-level and above) has created opportunities for developing businesses on both online, desktop, (and mobile, and video game consoles) so that they are not betting one one future shift.  A classic hedge.

See Raynor's book for more detail on how creating strategic options at the highest levels of an organization allows individual business units to focus on committing to a strategy and executing their bold ideas.

Raynor's work deserves more coverage; look for more summaries of his insights in future posts.

Hedge Funds

In the NYT today, we learned that $9.2bn hedge fund  Aramanth Advisors took a bath on its investments in Natural gas.  Bad news...for everyone?  It really seems like this was avoidable, based on late spring/early summer movement in natural gas, so that's not good news for fund investors.

I'm sure no investor would want to sit idly by.  So, he runs to the fund and asks to withdraw his investment.  However, there are strings attached.  The NYT correctly describes Aramanth's withdrawal policies as "draconian." 

"[i]nvestors can withdraw money only on the anniversary of their investments and then, only with 90 days’ notice. If they try to withdraw at any point outside that time frame, they face a 2.5 percent penalty. Even more draconian, if investors redeem more than 7.5 percent of the fund’s assets, Amaranth can refuse further withdrawals."

Ouch!

I think maybe I don't have the stomach for that at this point in my life.

Shorting eBay and Amazon

So I just noticed that the Skype protocol has apparently been cracked by engineers in China.  I immediately thought of the post on Mark Pincus's blog where he asks if he should short Ebay and go long on Amazon in equal amounts (swap).  Looks like that might be an even better idea, now.