Tech Review | Amazon $AMZN & Apple $AAPL: 'The TAX Man Cometh'

Tech Review (TR 2017-10-07)--Domain Mondo's weekly review of tech news with commentary, analysis and opinion: Features • 1) Amazon $AMZN & Apple $AAPL: 'The TAX Man Cometh', 2)  The Wrong Kind of Entrepreneurs, 3) Investing: Catalonia to Tech (video), Not a Time to Buy Anything, Portfolio Builder, Junk Bond Bubble, Disintermediation, Q3 2017, 4) ICYMI Tech News.

1) Amazon $AMZN & Apple $AAPL & Facebook $FB & Google $GOOG $GOOGL: The Tax Man Cometh--EU orders Amazon to repay $295 million in Luxembourg back taxes--Reuters.com. EU takes Ireland to court for not claiming Apple tax windfall--Reuters.com (up to 13 billion euros ($15.3 billion) of tax due from Apple Inc.). More in the video and text below:

Amazon hit with EU back taxes bill

Financial Times (FT.com) video published Oct 4, 2017: Brussels (EU) handed Amazon on Wednesday a bill for Luxembourg back taxes of up to €250m in the latest fallout from the EU crackdown on tax avoidance by big multinationals.

Germany, France, Italy, and Spain have proposed an ‘equalisation tax’ under which internet giants Google, Apple, Facebook, and Amazon would be taxed where they generate revenues rather than where they are registered. Right now the companies pay minimal taxes in Europe due to locating subsidiaries in low tax rate countries like Ireland and Luxembourg (profits are currently reported where the subsidiary is located, even if revenues are generated in other countries). Under the virtual permanent establishment concept advanced by Estonia, companies would be taxed ‘where the value is created’ rather than where the companies are registered. Existing tax rules are inadequate for the digital economy, say France, Germany, Italy, and Spain, which also maintain that ‘economic efficiency is at stake, as well as tax fairness and sovereignty’. While supporting existing initiatives at the G20 and OECD, these EU 'big four' countries also want to 'move ahead quickly’ within the EU--see DIG.watch (pdf) Sep 2017.

2) The Wrong Kind of Entrepreneurs--"When economists say “rent,” they mean money that one person extracts from another without producing anything of value ... Robert Litan and Ian Hathaway, writing in Harvard Business Review, have a more dire hypothesis. They surmised that many American entrepreneurs are no longer looking for ways to produce more useful stuff, and are instead looking for new techniques for extracting money from each other and from the government ... crony capitalism may be slowly cannibalizing productive capitalism"--Bloomberg.com. See also Special Pump-and-Dump Scheme Spikes to High Heaven | WolfStreet.com. 

3) Investing

Charts that matter: Catalonia to tech

Financial Times (FT.com) video published Oct 5, 2017: The FT.com's markets team on what to watch for in markets this month: US credit, Catalonia bonds, bond covenants, rotation into energy and what the S&P 500 needs.

a. Quick Notes:

• Hurricane Nate Aims At New Orleans--Category One Landfall Early Sunday.
• Coming: another interest rate hike by the Fed likely this year: U.S. Dollar hits 10-week highs, U.S. yields jump on strong wages data | Reuters.com.
• "This Is Not A Time To Buy Anything" --Sam Zell warns retail real estate market is a "falling knife"--"An area that's in this much disarray, with so many weak players, is not an area where I would want to deploy capital at this time. And I'm generally a contrarian but I think what we're dealing with here is very significant."--ZeroHedge.com Sep 26, 2017. WolfStreet.com: Landlord’s View of the Brick and Mortar Meltdown: “We are faced with weekly tenant bankruptcies, defaults, and requests for rent or space reductions ... even the biggest liars you ever met will admit to challenges facing their portfolios."-- (emphasis added).
• Portfolio builder: How To Profit From The Online Data Boom | SeekingAlpha.com.
• World’s Biggest Ever Junk Bond Bubble in Pictures: What Hath Draghi Wrought?--MishTalk.com. 
• Disintermediation: FedEx $FDX and UPS $UPS DOWN on report of Amazon's $AMZN own delivery service--Reuters.com.
• One man's pain is another's gain--Hurricane Stimulus in Auto Sector: "Hurricane Harvey and highest discounts in US history did the trick--GM, Ford, and Toyota were the biggest winners. Fiat-Chrysler and Hyundai got crushed."--WolfStreet.com.
• JPMorgan Updates By-laws In Case Of "Nuclear Disaster" Or World War III--ZeroHedge.com

b. Q3 2017 Earnings Season

• "Our picks for big winners this earnings season: Tech and Financials"--DataTrekResearch.com
•  Domain Mondo's Q3 2017 earnings coverage list: Alibaba Group | NYSE: BABA; Alphabet | NASDAQ: GOOG / NASDAQ: GOOGL; Amazon | NASDAQ: AMZN; Apple | NASDAQ: AAPL; Facebook | NASDAQ: FB; GoDaddy | NYSE: GDDY; T-Mobile | NASDAQ: TMUS; Tucows | NASDAQ: TCX; Twitter | NYSE: TWTR; Verisign | NASDAQ: VRSN.

4) ICYMI Tech News:

• Why Does Sweden Have So Many Startups? | TheAtlantic.com: Sweden's strong safety net, low corporate taxes, and deregulation of industries to promote competition, have aided its thriving startup community.
•  Amazon-Whole-Foods Already Rattles the Grocery Sector | WolfStreet.com: "...  foot traffic of new customers remained at elevated levels through September 16. On that day – a Saturday – the index of foot traffic spiked to one of its highest levels since the price cuts ..."
• Intel and Intelsat partner on plan to free up 5G airwaves | Axios.com.
• India approves Chinese smartphone manufacturer Oppo retail stores, Apple next?--Reuters.com and Manufacturing Smartphones In India Hits Hurdles--lack of skilled labor and part suppliers along with a complex tax regime--Reuters.com.
• Entitled & Tone-deaf: Mark Zuckerberg wanted Facebook employees to work for his separate personal entity "Chan Zuckerberg Initiative" until senior staff complained to board member Marc Andreessen who passed it along to Zuck--BusinessInsider.com. See also Facebook Lies | iain.learmonth.me: Think you can "escape" from Facebook? Think again.
• Foreign government software code reviews 'problematic' says White House--Reuters.com.
• Uber’s path to win back London: data, fines and fees | Reuters.com
• SEC Exposes Two Initial Coin Offerings (ICOs)--"The Securities and Exchange Commission today charged a businessman and two companies with defrauding investors in a pair of so-called initial coin offerings (ICOs) purportedly backed by investments in real estate and diamonds ..."--SEC.gov
• Swiss regulator probes ICOs: "Ten days after shutting down a fake cryptocurrency scam, the Swiss financial regulator said it is investigating the procedures for setting up new companies in the rapidly expanding sector."--SWI | swissinfo.ch. See also Bitcoin “Probably Worth Zero”--MishTalk.com.
• Blockchain: Commerzbank, other banks join UBS and IBM trade finance blockchain--Reuters.com.
• Google Retooling User Security: "Google is preparing to upgrade its security tools for online accounts to better insulate users from cyberattacks and politically motivated hacks"--Bloomberg.com
• Apple iOS 11’s Misleading “Off-ish” Setting for Bluetooth and Wi-Fi is Bad for User Security--Electronic Frontier Foundation | eff.org.
• OK Google, Get Out of My Face | MIT--TechnologyReview.com.
• Yahoo says all three billion accounts hacked in 2013 data theft--Reuters.com
• ChinaInternetWatch.com: Tencent launches digital bank card--"WeBank Card"--on WeChat. 
• Take the politics out of broadband progress reports: "... many consider the Federal Communications Commission’s existing data to be inaccurate and unreliable. With the FCC now having launched its 13th annual inquiry into the status of broadband deployment in America ..."--rstreet.org
• FCC's market-based solution for toll-free numbers: "RespOrgs solicit toll-free numbers from a master database of available numbers, like registrars do for internet domain names. But RespOrgs have incentives to engage in strategic behavior such as warehousing or hoarding the limited supply of numbers, particularly with regard to valuable numbers such as vanity numbers (like 1-800-LAWYERS) and easy-to-remember numbers ..."--aei.org
• Beyond mainstream media's fake news, false narratives, and daily D.C. dramas, Trump begins to alter American life--Reuters.com 

-- John Poole, Editor, Domain Mondo  

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DISCLAIMER

Google Just Killed The Last Remaining Rationale for New gTLD Domains

Google just disrupted ICANN's new gTLD domains--it's called "innovation" [Update below] 

"... today we’re updating the algorithms that display URLs in the search results to better reflect the names of websites, using the real-world name of the site instead of the domain name, and the URL structure of the sites in a breadcrumbs-like format..."--Google, April 16, 2015 (emphasis added) 

The bad news for ICANN's new gTLDs just keeps piling up. While the domaining-domainer blogosphere was all lit up last week about Google's new search change now rolling out in mobile--the domain name extension (TLD) of the destination URL will not show in the search results--they missed the most important effect of the change: Google just killed the last remaining rationale for new gTLD domain names. Countless promoters, hustlers, speculators and "consultants," have invested their time and treasure in ICANN's new gTLDs based on the premise of the significance and importance of the "right of the dot" word for "branding" purposes! Oops! Never mind--Google is just serving up the website "title" without the TLD ("right of the dot word").

UPDATE: Many are still confused about "what just happened?"--it's called innovation, disintermediation--Google just disintermediated the new gTLDs. Impact on .COM, and ccTLDs? Minimal. They already have dominant "branding" and market share in their respective markets and are the "presumed TLD"--e.g., in the U.S. and global online market, it is a well-known fact that consumers and other users of the Internet will just type the name of the business or website and add .COM when doing direct navigation in a browser or application.

But you believed those new gTLD hucksters when they told you that Google would "ensure" the success of the new gTLDs? That new gTLDs would produce superior SEO results? FALSE. That first year new gTLD registrations would total 33 million or more? FALSE!

Let's add all the above to the other ways that new gTLD domain names have now reportedly failed, including, failing all the most important factors in choosing a domain name extension (top-level domain or "TLD"):

1. New gTLD domain names FAIL to work across the internet and "break stuff" (a/k/a the universal acceptance problem which ICANN has known about since at least 2003);

2. New gTLDs compromise the stability and security of the Internet (a corollary to the above).

3. New gTLD domain names lack pricing predictability--why invest time and money building a website on a new gTLD domain name only to be subject to the possibility of extortionate future price increases for annual registration renewals? Thanks to ICANN, new gTLD registry operators have sole discretion and control for new gTLD domain name pricing, including future increases for registration and renewal fees. A trusted, reliable registry operator with a history, practice, policy and/or requirement of pricing predictability for their TLDs, is a necessary requirement before most prudent registrants will even begin to invest their own hard-earned money in building a website on that TLD! But ICANN, its GNSO, and their "well-paid expert" never thought about that! And these are some of the same people, who, despite the pathetic registration numbers of new gTLDs, are still expecting everyone to start building major websites on these defective, untrustworthy new gTLDS (new generic top-level domains).

[ Note to ICANN: All the above is an example of what happens when you do not have a Registrant Stakeholder Group in ICANN. ]

Add all the above together and there is no doubt that the King was right--ICANN's new gTLD domain names, as a class, are a #FAIL. No wonder new gTLD Registry operators are getting increasingly desperate--giving domain names away for free or selling for only 49 cents each!--which only "trashes" the TLD further, attracting cybersquatters, cyber criminals, and other bad actors.

And to top it all off, Google just delivered the coup de grâce!

Caveat Emptor!


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