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R&D, PR, and not paying taxes. The weird ideas don't really have to work out for Amazon at least for now. There is also internal knowledge and data being cultivated related to these 'flops.' As someone suggested (can't recall who), sometimes a company like Apple starts developing something internally so when they do an acquisition they have a pretty good idea on the model and have an existing team to integrate with. Unlike Apple, Amazon is choosing to put these stories in the news.


"sometimes a company like Apple starts developing something internally so when they do an acquisition they have a pretty good idea on the model and have an existing team to integrate with"

Believe it or not they do that at GoDaddy too.


I wonder how much marijuana is grown indoors in the US? Perhaps there are some parallels not so much with cost of land but cost of transport with that one.


The cost of discovery is what drives marijuana plantations indoors.


I'm hardly the expert to comment on this, but I'll make the response just for future historical reference (may be I am completely wrong.) Certainly there is a bubble in asset prices now, presuming interest rates do not remain zero or negative forever.

The great irony is that at some point extra money can deflate prices rather than increase depending on where that money is applied. E.g. build enough solar panel factories in China and eventually everyone gets to flood the market with cheap solar panels. So it is not clear that more cheap money will increase prices for a very long time. The second irony is if the Fed and other central banks hit their goal of increase prices, the wealthy won't feel anything but it will hit the poor and middle classes very, very hard. As in choosing when to eat meals hard.

The thing most analysts miss is there is all of this 'new' money but we still have huge future liability holes. This is both with debt which requires future cashflows to pay off along with future promises which may not be able to be met. This is very apparent in underfunded pension funds. Despite many different metrics pointing to all time highs in US stock market valuations (many ways to cut this pie) we still have big pensions funds that are 50% funded or less (Illinois & Chicago for one.) That is with expected 7%+ returns year after year in to the future. If their future gains are a lot lower its even worse. Pension fund problems are visible, insurance, annuities, etc are opaque. There could be huge problems there still. Banks aren't even that well capitalized still.

We could imagine quantitative easing, money printing, and cheap money as something that could be shoveled in to huge holes of "negative" money. As long as those huge holes exist, the stimulus is not going to perform as expected. If the stimulus is through more debt its plausible these holes are staying the same or getting larger. Certainly it is possible that all of this money has done a great deal already including preventing wide spread bank failures.

My general thesis is we are in a period of time where technology and monetary policy are in direct and absolute conflict with each other. Monetary policy is totally reliant on inflation to pay off future debt and claims. On the other hand, technology is about delivering more at a much cheaper price. We want a market for $1000 iPhones, not $1 billion iPhones. We want software that delivers 1000x more value to a customer, not that costs 1000x more. Fuck, hn wouldn't be here and we would all be living in a bizarre universe if things were the other way around. May be there would be the global market for 10 supercomputers or whatever was once predicted.


> presuming interest rates do not remain zero or negative forever

Slightly off topic but I don't believe US interest rates can go up without creating a massive issue for the US economy. From the link below: "a 5% increase in interest payments for the federal government would cause the level of federal debt to rise to $85 trillion over the next 20 year". So should the Fed reserve return interest rates to a historically normal level before the government significantly reduces debt (which seems unlikely) they would likely crash the US economy.



These China bubble stories on HN are very amusing. I can remember a few in the past suddenly filled with commenters writing in broken English that there was no bubble for X, Y, Z reasons. While I did not at the time, I now wonder if some of our commenters here are employed by the Chinese government.

I've been following Michael Pettis quite closely. Great analyst, understands and explains the global balance of payments very well, lives in China, etc. His opinion has moved from 'China needs to rebalance' to wording that sounds like he's not sure there is going to be much growth for a long time.

China's growth for some time has been the result of malinvestment on a massive scale. At minimum since 2008, possibly even before that. The factories that we think could be productive and producing things people really want at the right price could be in that position because of very negative inputs (unaccounted for pollution, interest rates being subsidized by someone else, etc.) Fundamentally, when you have an economy growing at a rate above the interest rate, many companies can just overgrow their debt while taking on new debt. Unprofitable operations can be hidden for decades.

It is now within the realm of possibility that China could see 1-2% growth for decades ahead. In short term, I would expect negative GDP growth. Based on what has happened to the price of oil (and other raw materials), and the drop in high end consumption due to a 'corruption crackdown' this could already be underway.

In general this should be a good thing. Certainly it is for the environment and climate change.


> filled with commenters writing in broken English that there was no bubble for X, Y, Z reasons.

This is one of the biggest misconceptions. What we think of as "shills" do not and would not speak in broken English. It would run completely contrary to their ultimate goal of "swaying public opinion". Being unable to communicate efficiently would not be effective propaganda. It would be so obvious and that's precisely what they're trying to avoid.

Hell, A country could (and some probably do) outsource the work to 'reputation management' companies who employ people that are native speakers of a particular language. Subcontracting the work out would also provide a layer of separation if they get caught. The government has plausible deniability, "We didn't know that's what they were doing! We thought they were doing this other thing!".

Digg.com had to send a cease and desist letter to one Chinese propaganda wing to get them to stop mucking up their website. Those individuals were not speaking in broken English. They may not have even been Chinese according to a couple people I knew that worked at digg at the time. One of my friends believed them to be an Australian company (shilling for China for a paycheck). Source on the Digg issue here: http://en.wikipedia.org/wiki/Internet_Water_Army#Legal_probl...


> It would run completely contrary to their ultimate goal of "swaying public opinion".

As the saying goes, nobody's perfect. It could easily be that they hired someone to do this and they did an imperfect job of it before being replaced.


> I now wonder if some of our commenters here are employed by the Chinese government.

Say anything critical of the Chinese government's policy towards Tibet and/or the Dalai Lama, and watch the broken English "rebuttals" pouring in like the flood.


Is this land that is being bought for future subdivisions? Definitely have seen this in areas by suburban areas. Certainly not all farming is being done at a loss?


Farming is a lot like a startup, except maybe drawn out over more years than tech people like to see.

You invest everything you have into a business that will return you very little, at least in the start. As you start to grow you put your profits into growth. Finally, as you reach retirement age the debts are hopefully paid off and you are actually making money for the first time. You're also sitting on millions of dollars worth of assets that are now fully in your name. When you are ready to retire, you sell it all.

In other words: You live in poverty over your working career so that you can cash out later in life, while hopefully not going bust in the meantime. The profitability of the business is dependant on the market and the weather, but even more dependant on what stage your business is at. Early stage businesses are apt to lose money most years, but late stage businesses should make money most years.


> Certainly not all farming is being done at a loss?

A big corp can calculate differently from your small farmers. It's OK to them if the field turns profitable finally in 20 or 30 years because they have enough other sources of income to pay for the mortgage (or buy the field out of pocket).

The small farmer on the other hand would be bankrupt by then.


No, no development anywhere around. I'm not sure why the price went up. I bought my land in the 90's and it was ~$1000/acre. Now its 10X that. Probably a bubble.


I wonder if it will ever make sense for full vertical integration of agriculture? Could one company own the seed DNA, land, all related equipment, and sell the outputted product directly to consumers?

Could technology ever give one company such a great advantage that they could buy land at a price which would be a great loss to everyone else? The answer could be less about technology and more about the subsidized enforcement of intellectual property law and the strength or weakness of anti-trust law.

We look at this from an IP right/wrong standpoint, but a lot of moral questions regarding food production sit outside that realm as long as many people are either not getting enough food or getting too much of food that is damaging their bodies.


Books could be written to answer this.

A contractor could be viewed as a business relationship -- here is the contract, do what it says or don't get paid/the money back from you. Certainly there is value for having work done on a contract. The contractor should be able to do it themselves or subcontract it out.

An employee could be seen as a single individual who shows up on time and is paid for doing so. It is the employer's job to make sure the individual is doing something productive whatever those tasks may be.

That is a very simple separation and not really correct, but certainly there are good reasons for there to be legal separations. Also consider there are so many legal expectations for the two depending on where one is located. A big challenge for startups riding the line.

Personally I am more concerned about basic labor rights & employer abuse rather than guarantees of benefits and minimum wages. One only has to look at migrant labor abroad to get a good idea of just how bad it gets -- slavery alive and well.


The story between the lines here is, if the NYTimes writes a positive piece about you and your doing shady shit, expect a followup.


Lots of valuable data for mapping, local search, and the ad targeting that goes with it. Valuable to Google, Apple, Facebook and a few others. The failure was in growth, blame likely correctly laid on Facebook.


Thankfully we have leaked documents from the US case.

Excerpt from Ben Edelman, whose done a damn good job over the years not only watching Google but also companies involved in abusive adware and spyware practices:

'At the same time, Google systematically applied lesser standards to its own services. Examining Google's launch report for a 2008 algorithm change, FTC staff said that Google elected to show its product search OneBox "regardless of the quality" of that result (footnote 119, citing GOOGLR-00330279-80) and despite "pretty terribly embarrassing failures" in returning low-quality results (footnote 170, citing GOOGWRIG-000041022). Indeed, Google's product search service apparently failed Google's standard criteria for being indexed by Google search (p.80 and footnote 461), yet Google nonetheless put the service in top positions (p.30 and footnote 170, citing GOOG-Texas-0199877-906).'


Were consumers hurt if Google de-ranked content which by even Google's own standards were better than its own? May be not, but it certainly peels away any idea of the integrity of algorithmic search.

Google's business is under attack from all fronts today. As business owners and those employed by internet businesses we are so fortunate as to not have to rely on Google anymore for our audiences. We have have search from two major app stores, and more if you are international. Social can deliver new users at a greater rate than search. There was a day where Google penalized your company, and the next day you fired everyone.

In the next year or so we may start seeing ultra-cheap Chinese smartphones flood the market with Google free Android. Interesting thing commenters here seem to not know, device manufacturers are not allowed to sell any non-Google Android devices if they sell Google Android.

Idealy some lines are drawn so Facebook doesn't engage in similar abusive behavior against its users and customers. I don't have high hopes. If anything, the ability to avoid US penalties and the EU's late reaction time probably emboldens behavior by market leaders everywhere.


I don't understand what you're getting at. The "product search onebox" does not drive traffic to Google, it drives traffic away from it. For instance if I search for "bicycle helmet" the thing at the top of the page is the product search onebox, it contains five prominent links to sites where I can buy a bicycle helmet.

So I don't see what you are getting at. If anything, the product search onebox is the opposite of what the EU seems to be complaining about.


The question would be, how did those links in the OneBox get there? Is there harm in being the #1 search result, but not the first "result" on the page, because there's a OneBox above you with links from a different source?


I don't know. Apparently the merchants provide the information to Google directly in spreadsheets.


As for your other question about being the #1 result but being ranked below paying advertisers, I'm not sure. Nobody deserves the #1 spot, it's not a natural right granted by your creator. In fact "the #1 search result" varies from query to query and from one user to the next based on their own Google account, if they have one.


> Ben Edelman, whose done a damn good job over the years not only watching Google

Ben Edelman is a smart fellow; I've known him for 15 years or so. But he is a paid Microsoft consultant and advisor. Perhaps he's right on some of these points, but I also suspect that if Microsoft would stop writing him checks very quickly if he suddenly started declaring that Google's actions benefited consumers.

You might as well quote a paid Democratic party consultant doing a "damn good job over the years" describing how evil those dastardly Republicans are.


Well if we're making those kind of accusations:

\* Maybe the FTC would not have dropped the investigation despite finding potential evidence of harm [1] if Google hadn't paid to "honor" the chairman during the investigation [2].

\* And maybe the FTC would not have felt politically pressured to drop the investigation of Google didn't pay more millions than any other tech company to "lobby" the government [3].

I notice that whenever Edelman is mentioned Google apologists such as yourself or Googlers like DannyBee resort to ad hominem attacks rather than address any of the actual arguments he puts out. Do you know if anybody has refuted any of his points? Because I'm genuinely curious.

1. http://www.wsj.com/articles/inside-the-u-s-antitrust-probe-o...

2. http://www.bloomberg.com/news/articles/2013-02-28/google-hel...

3. http://www.opensecrets.org/lobby/indusclient.php?id=B12&year...


"Interesting thing commenters here seem to not know, device manufacturers are not allowed to sell any non-Google Android devices if they sell Google Android." - This is one of those MADA terms few Google supporters understand. Samsung, for example, is prohibited from releasing Google-free Android unless they wholesale give up on all Google Apps on every device they sell.


This made it difficult for Amazon to enter the tablet market with Kindle Fire: almost all manufacturers were unwilling to make it for them, because Google would kick them out of the OHA if they did, and they'd be unable to make Google-based Android phones.



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