Amazon holiday results to show sales tax impact

SAN FRANCISCO (Reuters) – Acting as a tax collector may have hurt Amazon.com, Inc’s holiday sales analysts and industry executives said, but they expect to know more when the internet retailer reports its fourth-quarter results on January 29.

Best Buy Co., an archrival of Amazon in consumer electronics, saw holiday online sales increase in three states where Amazon started collecting sales tax ahead of the period.

“There was a little softness in states where Amazon is now collecting sales tax,” said R.J. Hottovy, an equity analyst at Morningstar. “That isn’t surprising to me. It levels the playing field for brick-and-mortar retailers.”

Critics of Amazon argued it had an unfair advantage because most retailers have had to collect state sales tax on online sales for years because they have stores and other physical operations in these locations.

But many states, hungry for extra tax revenue in the wake of the 2008 financial crisis, introduced new laws requiring that Internet-only retailers also collect sales tax. Brick-and-mortar retailers hope the requirement will reduce Amazon’s price advantage and help them recoup lost sales.

CHANNELADVISOR DATA

Amazon, the world’s biggest Internet retailer, began collecting sales tax of 7.25 percent to 9.75 percent in California on Sept 15, about two weeks before the start of the fourth-quarter. Third-party sellers on Amazon.com saw a drop in sales during the quarter, compared to other states, according to an analysis by e-commerce firm ChannelAdvisor.

It also started collecting sales tax in Pennsylvania in September and in Texas in July.

Amazon’s fourth-quarter results should provide clues on whether consumers changed their shopping habits when faced with higher taxes on their purchases from the company’s website.

ChannelAdvisor, which helps merchants sell more online, analyzed its clients’ sales on Amazon.com in California, and compared them to other states before and after the sales tax kicked in.

Before Amazon began collecting the tax in California, ChannelAdvisor client sales were 5 percent to 10 percent above other states. The week before the September 15 start of the tax, sales spiked as high as 70 percent compared to other states.

“The surge before the tax went into effect was much larger than I thought it would be,” said Scot Wingo, chief executive of ChannelAdvisor. “Californians definitely bought a lot in the three or four days before the tax went into effect.”

After Amazon began collecting tax, its California sales leveled with other states. Then, in early November, they slipped as much as 10 percent below other states, ChannelAdvisor data showed.

During one of the busiest holiday periods, in late November and early December, sales dipped further in California vs other states. Toward the end of the holiday period, client sales in California recovered, the data showed.

“There was a sales impact of about 10 percent at the worst point of the dip,” Wingo said. EBay, another Amazon rival, is an investor in ChannelAdvisor. Wingo also owned Amazon shares, but sold them in the fourth quarter for personal tax-related reasons.

Amazon’s tax collection in California had the most impact on fourth-quarter sales of more expensive items priced at $ 200 to $ 250, Wingo said.

PRICES, PROFIT

Amazon probably lowered prices by 8 percent to 9 percent on items most affected by this, although it is tricky to separate such reductions from the usual holiday season promotions that were also happening, Wingo said.

The extra price competition may dent Amazon’s profitability in the fourth quarter, Morningstar’s Hottovy said.

Amazon is expected to make 52 cents a share in the fourth quarter, on revenue of $ 22.3 billion, according to Thomson Reuters I/B/E/S. In late October, the company forecast operating results ranging from a profit of $ 310 million to a loss of $ 490 million.

Hottovy expects $ 22.4 billion in revenue and an operating loss of $ 210 million, or a $ 135 million loss after excluding stock-based compensation and other operating expenses.

BEST BUY

In California, Texas and Pennsylvania, Best Buy said it saw a 4 percent to 6 percent increase in online sales during the holiday versus the rest of its chain.

The retailer also saw an increase of 6 percent to 9 percent in online orders that are picked up in its stores in those three states compared with the rest of its chain.

Overall, Best Buy reported better-than-expected holiday sales last week, sending its shares up more than 10 percent.

“This makes Amazon equal to everyone else. They no longer have that sales tax advantage,” said Anne Zybowski, vice president of retail insights at Kantar Retail. “If this had happened to Amazon when they were just a bookseller years ago, they may not be as big as they are now.

Despite the tax changes, Amazon’s consumer electronics prices were still at least 5 percent below Best Buy’s during the holiday season, Zybowski said. But Best Buy may have benefited from even a small change in this area.

“Particularly in consumer electronics, any narrowing of Amazon’s price advantage at the margin is important because Best Buy brings service and other shopper benefits to the category,” she said.

Best Buy will take away people’s old TVs when they buy a new one and the company’s Geek Squad service will install devices in shoppers’ homes, services Amazon does not provide, she noted.

An Amazon spokesman declined to comment when asked if the company saw an impact on fourth-quarter sales from the collection of sales taxes in the three states.

In the past, Amazon executives have said there was little or no impact from such changes in other regions.

Several analysts have argued that shoppers use Amazon for its vast product selection and convenient, fast shipping and returns, and not just its low prices.

“While not great for Amazon, it’s just one of many consumer benefits its service offers,” said Ken Sena, an analyst at Evercore Partners. “And while there may be early effects from this change, I still see usage trends remaining in Amazon’s favor.”

(Editing by Leslie Gevirtz)

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Advice Columnist Pauline Friedman Phillips 'Dear Abby' Dies

Longtime newspaper advice columnist Pauline Friedman Phillips -- who wrote Dear Abby under the name Abigail Van Buren -- has died at age 94.

Her publicist confirmed to the Associated Press that Phillips died Wednesday after a long battle with Alzheimer's disease.

PICS: Star Sightings

Since her family revealed in 2002 that Phillips had been diagnosed with Alzheimer's, her daughter, Jeanne Phillips (pictured above), has been the sole author for the syndicated Dear Abby column.

Phillips' column competed for decades with the advice column of Ann Landers, which was written by her twin sister, Esther Friedman Lederer, who died in June 2002. 

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Breaking God: Former Roman Catholic priest busted for selling meth to feds

BRIDGEPORT, Conn. — A former Roman Catholic priest is among five people who have been indicted by a federal grand jury in an alleged drug operation involving shipments of methamphetamine to Connecticut from California.

Federal prosecutors said Kevin Wallin, 61, former pastor at St. Augustine's parish in Bridgeport, received the shipments and sold methamphetamine to an undercover officer six times since last September. Prosecutors say investigators also gathered evidence from court-authorized wiretaps.

The grand jury in Bridgeport indicted the five people Tuesday on charges of conspiring to distribute 500 grams or more of a substance containing methamphetamine and 50 grams of actual methamphetamine. Wallin, of Waterbury, was also charged with six counts of possession with intent to distribute methamphetamine. The conspiracy charges carry 10 years to life in prison upon conviction.

Connecticut Post

Kevin Wallin

All five are detained. It's not clear if they have lawyers.

Also charged are Kenneth Devries, 52, of Waterbury, Michael Nelson, 40, of Manchester, Chad McCluskey, 43, of San Clemente, Calif., and Kristen Laschober, 47, of Laguna Niguel, Calif.

Wallin resigned as St. Augustine's pastor in June 2011 after serving nine years in the post, citing health and personal issues, the Diocese of Bridgeport said in a statement. Diocese officials granted him a sabbatical the following month.

During the sabbatical, diocese officials became concerned about Wallin's well-being and reached out to him, but he has never spoken directly to church officials, the diocese said in the statement, which did not elaborate.

Wallin's faculties for public ministry were suspended in May 2012 and he has not been reassigned, the diocese said.

"News of Msgr. Kevin Wallin's arrest comes with a sense of shock and concern on the part of the diocese and the many people of Fairfield County who have known him as a gifted, accomplished and compassionate priest," the diocese said. "The diocese stands ready to help as it has throughout the past two years. We ask for prayers for Msgr. Wallin during the difficult days ahead for him."

Wallin was a close friend of former Archbishop of New York Edward Egan and advised Egan in the early 2000s when Bishop James McCarthy and Monsignor Charles Kavanagh were forced to resign over sexual improprieties..

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JM Family Enterprises and Baptist Health South Florida make FORTUNE’s list of best companies

Two South Florida companies made the ranking on FORTUNE magazine's 2013 list of the “100 Best Companies to Work For” in America, released on Thursday.

Diversified automotive company JM Family Enterprises, based in Deerfield Beach, was ranked No. 32, marking its 15th consecutive year on the list. Two-thirds of the company’s score is based on responses to an anonymous survey sent to 1,664 randomly selected associates in the United States, and the remainder is determined by an evaluation of the company’s overall culture, JM Family Enterprises said.

Baptist Health South Florida also made FORTUNE’S list, coming in at No. 76. Baptist Health, based in Miami, has 14,145 employees, up 6.8 percent in 2012, according to FORTUNE.

INA PAIVA CORDLE

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Facebook search to generate revenue, no rival to Google: analysts

(Reuters) – Facebook Inc’s new search tool has strong potential to generate revenue for the social networking company, though it is unlikely to challenge Google Inc as the world’s dominant search engine, Wall Street analysts said on Wednesday.

Facebook’s “graph search” tool, rolled out on Tuesday, lets its more than 1 billion users trawl their network of friends to find everything from restaurants to movie recommendations and is the company’s biggest foray into online search.

Graph search contains some category suggestions that can be easily monetized, BofA Merrill Lynch analysts said in a note.

“It should be easy to incorporate commercial search results via Facebook’s partnership with Bing,” they added.

Facebook currently has a partnership with Microsoft Corp, whose Bing search engine provides search results for external websites. Microsoft also integrates certain Facebook results into its Bing search results.

BofA Merrill Lynch analysts estimated Facebook could add $ 500 million in annual revenue if it can generate just one paid click per user per year, and raised its price target on the stock by $ 4 to $ 35.

Facebook’s shares were flat at $ 30.10 in early trading on Wednesday. They have jumped about 50 percent since November to Tuesday’s close after months of weakness following its bungled Nasdaq listing in May.

However, analysts at J.P. Morgan Securities said the lack of a timeline for the possible launch of graph search on mobile devices may weigh on the tool’s prospects.

The success of the graph search, which will rely heavily on local information, depends on Facebook launching a mobile product, the analysts said. Half of all searches on mobile devices seek local information, according to Google.

Graph search also lacks the depth of review content of Yelp Inc, the analysts added.

Pivotal Research Group analyst Brian Wieser said monetization potential would be largely determined by Facebook’s ability to generate a significant portion of search query share volumes and he expects that quantity to be relatively low.

“Consumers are likely to continue prioritizing other sources, i.e. Google. Advertisers would consequently only use search if they can, or are perceived to, satisfy their goals efficiently with Facebook,” Wieser said.

NO GOOGLE KILLER

Analysts mostly agreed that Facebook’s search tool was unlikely to challenge Google’s dominance in web search at least in the near term.

“As of now, we do not see Graph Search as a threat to Google Web search. Looking forward, Facebook Graph searches could be competitive with certain categories of Google searches, such as Places and Maps,” BofA Merrill said.

Internet search, social networking tools and e-commerce are among the biggest weapons that companies such as Facebook, Google and Amazon.com Inc have in their battle for supremacy. A successful combination of the three could win the day for them.

Google has been trying to combine social networking and search for more than a year by integrating Google+ into its search engine.

“Overall, Graph Search offers users a unique view to information not available on Google, but does not replace Google. We view the relationship between Facebook Graph Search and Google as both competitive and complementary,” Piper Jaffray & Co analysts said.

The brokerage said users looking to buy a cellphone, for example, could search for friends’ reviews on Facebook and expert reviews on Google.

(Reporting by Sayantani Ghosh in Bangalore; Editing by Sriraj Kalluvila)

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Beyonce GQ Cover Shoot BRoll

Earlier this week, ETonline revealed that Beyonce had been named Miss Millennium in the February issue of GQ and now we've got some behind-the-scenes video of her steamy photoshoot!

PHOTO - Beyonce Debuts Her Incredible Post-Baby Body

Titled Home Alone with Miss. Millennium, the video chronicles Terry Richardson's sexy shoot with the new mom (although you'd never know it judging from her bangin' bod)!

VIDEO - Beyonce Reveals Blue Ivy's Ultrasound

So go inside Beyonce's filthy (you'll see) photoshoot, and click here to see the other 99 women who were named to GQ's list of The Millennium's Sexiest Women!

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Geriatric Colombo underboss must see out 8 year sentence: court

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Miami Dolphins bill would bring state money to aging stadiums

A bill drafted by the Miami Dolphins would give Florida sports teams $3 million a year in state money to improve older stadiums, provided the owner pays for at least half the cost of a major renovation.

Under the law, the stadium would need to be 20 years old and the team willing to put in at least $125 million for a $250 million renovation. That’s less than the $400 million redo of Sun Life Stadium that Dolphins owner Stephen Ross proposed this week, which he hopes will win state approval thanks to his offer to fund at least $200 million of the effort to modernize the 1987 facility.

Miami-Dade and Florida would fund the rest through a mix of county hotel taxes and state general funds set aside for stadiums. Sun Life currently receives $2 million a year through the program, and the Dolphins want to create a new category that would give them an additional $3 million.

While the Miami Marlins and Miami Heat both play in stadiums subsidized by county hotel taxes, the Dolphins receive no local dollars. The bill would change that by allowing Miami-Dade to increase the tax charged at mainland hotels to 7 percent from 6 percent, and eliminate the current rule that limits the money to publicly owned stadiums. Sun Life Stadium, in Miami Gardens, is privately owned but sits on county land.

The bill pits enthusiasm for one of Florida’s most popular sports teams against a lean budget climate and lingering backlash against the 2009 deal that had Miami and Miami-Dade borrow about $485 million to build a new ballpark for the Marlins. Ross also must navigate a Republican-led Legislature that has twice rebuffed his requests for public dollars.

“I would be surprised if that bill even got a hearing in committee,” said Mike Fasano, a Republican representative from the Tampa area and a critic of tax-funded sports deals. “I’m a big Dolphin fan, and have been for years. But with all due respect, we’ve got people who are struggling throughout this state right now . .. The last thing we should be doing is giving a professional sports team or facility additional tax dollars.”

While the bill would open up the $3 million subsidy to other the teams, the Dolphins see it as unlikely that another owner would be willing to put up as much money for renovations as Ross, a billionaire real estate developer.

If the bill were enacted today, any stadium opened before 1993 would be eligible for the money, provided it could show the proposed renovation would generate an additional $3 million in sales taxes.

Ross and his backers are pitching the renovation as a boon to tourism, with Sun Life a magnet for the Super Bowl, national college football games and other major events. The National Football League is considering South Florida and San Francisco for the 2016 Super Bowl, and the Dolphins say approval of renovation funding is crucial to winning the bid.

Sen. Oscar Braynon, D-Miami Gardens, who sponsored the Senate bill, said the funding makes sense because when Sun Life hosts a Super Bowl, the entire state benefits from both tourism dollars and publicity.

“It’s a small price to pay for economic development, and for all the shine we get from major sporting events,” said Braynon, whose district includes Sun Life. Rep. Eduardo “Eddy” Gonzalez, R-Hialeah, is the sponsor on the House side.

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Gov. Scott scolded by legislative black caucus

TALLAHASSEE --
Gov. Rick Scott heard a litany of complaints Tuesday from the Legislative Black Caucus, on matters ranging from judicial appointments to civil rights for ex-felons. Throughout an hour-long discussion, the Republican governor held his ground in the face of grievances from Democratic lawmakers.

Criticized for making only a handful of black appointments to the judiciary, Scott said he’s limited to the choices given him by nominating panels and won’t appoint judges who believe in “judicial activism.” He said 6.5 percent of his judges are African-American (Florida’s black population is more than twice that). But Scott broke the tension by pointing out that he has appointed the wives of Reps. Darryl Rouson, D-St. Petersburg, and Joe Gibbons, D-Hallandale Beach, to state boards.

Faulted for signing a flawed election law that cut back the days of early voting, Scott said: “We’ve got to make changes, I agree. I didn’t have anything to do with passing it.” Scott’s administration, however, did spend more than $500,000 in legal fees last year successfully defending the law against numerous legal challenges.

Black lawmakers make up about one-fifth of the Legislature’s membership. They remain angry at Scott for one of his first decisions as governor: He and the three Republican Cabinet members imposed a five-year waiting period after ex-felons leave prison before they can apply for restoration of their civil rights.

“Once you’re out as a felon, you should spend time making sure you’re doing the right thing before you get your rights back,” Scott told the group, seated around a large square table.

The meeting ended with a plea that Scott appoint a task force to look at disparities in sentencing that affect young black men. Scott did not directly respond to the request.

“It’s deja vu all over again from last year,” said Sen. Arthenia Joyner, D-Tampa, as the session ended. “He’s still stuck on judicial activism. He wants everyone to think like him. He wants to run the state like a corporation, like it’s Florida, Inc. He’s not flexible on a lot of things.”

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Apple supplier sees big Q4 boost, likely a good sign for iPhone 5 demand

Shares of Apple (AAPL) have been hit hard over the last few days. Investors continue to worry about the company’s profit margins, demand for its popular line of smartphones and tablets, and its future endeavors. With upcoming competition from Research in Motion (RIMM) and Microsoft (MSFT), and an ongoing battle with Google’s (GOOG) Android operating system, analysts fear that Apple’s mobile dominance may be a thing of the past. While we won’t officially know anything until the company reports its holiday earnings on January 23rd, a small German company has painted a calming picture for Apple shareholders.

[More from BGR: HTC One SV review]

Dialog Semiconductor announced last week that it expects to report a significant increase in sales for its December quarter. The company noted that the increase was due to “a stronger than anticipated end of year, underpinned by a strong late surge in demand for smartphone and tablet products.” Dialog Semiconductor now expects to report revenues of $ 268 million, an increase from between $ 215 million and $ 235 million.

[More from BGR: Extensive BlackBerry Z10 demo video posted by German website [video]]

The important thing to note is that, as of this past fall, Apple is Dialog’s largest customer and accounts for 60% of its total revenue.

Logic dictates that solid demand for Apple’s iPhone and iPad during the holidays helped boost Dialog’s performance. This could also mean that the iPhone-maker will report not only a strong December quarter, but a better-than-expected March quarter as well.

It looks like all this talk about customers losing interest in Apple may indeed be premature.

This article was originally published on BGR.com

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