As the author points out, comparing Apple and MS isn't quite fair because MS is in the software business and Apple the hardware business (mostly). However, this is misleading:
Why would Apple want to switch from making $100 off the sale of a computer, to $10 off the sale of an OS? Their market- and mind-share would have to instantly increase by ten times just to break even on that move. Linux is downloadable for free -- why would any company deliberately compete with that? Even Microsoft is bailing out into other markets, as fast as it can.
The size of the profit (even if I believe his numbers) is irrelevant without considering both the number of units moved and the size of the profit margin. In MS' case, even if they are only making 10 bucks a copy on XP (which I highly doubt), the marginal cost to make it is like 50 cents, so they can essentially print money. However, he's right about the longterm viability of the operating system business; but if he doesn't think that Apple would switch places with MS from a pure business standpoint, he's wrong.
It seems to me that this can only possibly be a good deal if the game's creators are able to restrain themselves from trying the same thing over and over again. If this guy finds himself unable to unload his land because the company sold 5 plots just like his a few days later, he's gonna be up the creek.
Think of land as money, and the game's creator as the central bank. For a while, you can print money and become rich as long as no one expects inflation; as soon as they start to expect inflation, though, the jig is up.
We'll see if the game is more like the central bank of the US or the central bank of the Weimar Republic over the coming weeks:)
If the only way Google makes money is by investing their IPO cash, the stock would be worth about 10 to 15 bucks a share, tops. Why would you give money to a company if it was planning on lending it (or investing it)? Why not just invest it yourself and save on overhead? You think Google is better at managing money than Fidelity or Morgan Stanley? Of course not!
Google uses the money that we gave them to finance its growth. Its price/earnings multiple is so high because investors have expectations that the company will grow very quickly (although like a pre-bubble internet company, it would need to grow revenues by leaps and bounds to justify the multiple it now commands).
Ironic - that's almost the exact same response that many of the cheaters caught by Lou Bloomfield from my school, the University of Virginia, gave when accused of cheating. "Lots of papers are about the same topic, and there are only so many ways to describe [why the sky is blue/the photoelectric effect/whatever the paper was about]; THAT's why my paper uses the exact same words as my frat brother Tommy's."
I'm too lazy to dig out the slashdot story about the incident, but I do find another instance of denial in the face of obvious plagiarism amusing.
Yeah, or when car companies get sued because their cars, when driven in perfectly ordinary ways, catch fire and explode when bumped from behind, despite the fact that their maker knew about this problem and decided not to correct it.
That's definitely not Ford's fault.
This guy is modded plus five? Are you guys serious?
Samsung came out with an MP3 phone with 64 megs of storage (in the days when 128mb was considered large and 256mb unheard of) many years ago for Sprint, the Uproar. It never seemed to sell well even though it got pretty good reviews. The battery life was decent; 10 hours of playtime off a full charge, and the ring came over the headphones.
I know you probably at least looked at the Prospectus a little bit, but if you read Larry Page's entire letter, you'd realize this isn't true. The IPO is utilizing a two-tiered voting structure, with two types of stock. The types (A and B) are identical except that type B owners have 10 times as many votes per share as type A owners. As Larry mentions, many media companies employ this method. In practice, Larry, Sergey and Eric will hold onto enough Type B stock that even if (say) Microsoft bought all the outstanding Type A stock, it would still have a minority share of voting rights.
Also, one of their essential corporate values (it's in the prospectus!) is "Don't Be Evil." Which is kinda cool.
After thinking a little more, I thought of some arguments this idea would generate:
My Wal-Mart jeans will cost $2.00 more (NOOOOO!)
Job demand will outstrip supply in foreign markets, leading to too many applicants and nonmarket allocation of jobs (as if this doesn't happen in America)
Increased wages will lead to decreased hires, hurting foreign economies (more likely, high cost middle management jobs will be cut before the Indonesian garmet worker now making 16 dollars a day)
American companies will be at a competitive disadvantage to foreign garmet companies (hopefully, this is what our law will partially remedy)
I still think it's a good idea. I wonder what else I missed.
I've had about 30 hours of graduate level economics here at UVA, I had the exact same idea a while back, and I still haven't found anyone who could tell me why it was a bad one, other than the traditional "minimum wage laws cause unemployment" dross from Chicago-school disciples. Of course, there is no way in hell this would ever be passed, as any company that operates internationally would be dead against it and easily buy off enough votes to defeat it. I'm not sure the American minimum wage (which despite the complaints from Republicans has fallen in real terms since the late 70s) need be the standard - two dollars an hour would be far more than what many garmet workers in Southeast Asian sweatshops get, yet perhaps close enough to American wages that the costs of moving operations overseas would overwhelm any benefits of lower wages there.
*shrug* I'm sure some Friedmanites will crawl out of the woodwork to insult us, but I agree with your idea.
At my hometown park of Turner Field, ERA, batting average, etc as displayed on the jumbotron are recalculated after each plate appearance. It was fun to watch Bobby Hernandez' ERA skyrocket in realtime!
In related news, I'm going to see Schilling's first start of the year next Tuesday to catch the O's/Sox game in Camden Yards (driving up from Charlottesville, VA). Should be awesome.
Microsoft offered internet explorer for free not to control the internet browser market, but to maintain its monopoly on the operating system market. it viewed netscape plus java as a threat because it had the ability to launch platform-neutral applications, thus taking over the role that windows was fulfilling. that's what the government thought was illegal and what the trial was about.
Wow - the part at the end, where Disney sued a toy shop for violating a copyright that they don't own, is telling. What greedy pricks. I was looking over a copy of the Encyclopedia Brittanica 2015 edition (which conveniently fell through a time warp into my lap, open at the appropriate page), and it describes the Disney Corporation as "a bunch of mindless jerks who were the first against the wall when the revolution came." Funny, huh?
Washing machines? Mine's a 1954 Maytag. When the spin bearing in the bottom finally let go after 49 years of cleaning dirty underwear, I took apart the transmission to see if it was worth rebuilding.
While it's pretty darn cool that you can fix a 50-year-old washing machine, I'm disappointed that you didn't call the Maytag Man. That bum never seems to get off his ass, from what I see on TV! While I'm sure you could have fixed it better, I think that guy should have to work for his dinner every once in a while.
They're also enriching the stockholders of those companies, most of whom are rich. In the words of the Guinness Cartoon Guys in the new TV spots, Brilliant!
Actually, the contracts can specify selling only at MSRP. Stores can purchase iPods at lower prices, but Apple pulls their supply if it catches them discounting. They do this to assure stores a good profit margin so they spend their own resources advertising the product.
Say Best Buy sells an iPod for 399(MSRP), and Joe's DisKount ElectroniX sells it for 349 next door. Best Buy spends money advertising the availability of iPods, hires salesmen, etc. Joe is a 1-man shop with no ads, except for a big sign on their front window that says "IPODS: 349". They're located right next to Best Buy.
From Apple's perspective, Joe is freeriding off the efforts of Best Buy. Best Buy is pissed off because it loses sales to Joe from keeping it's retail price up, so it stops promoting the product and drops it's price. Apple is pissed off because no one knows about its product except for tech nerds who scour the internet review sites. Therefore, antitrust law tends to allow retail price maintenance in the absence of monopoly.
I think you're exactly right - the reason Nintendo got in trouble was because it colluded. I thought it was about the price of cartridges also, not about systems, but i could be wrong.
Sorry, I think we have a difference in terminology. "Antitrust" in the American legal system refers to laws against unfairly restricting competition, whether by one firm or several. The primary statute is the Sherman Antitrust Act of 1890, so that's where the name comes from. In Europe (maybe in Canada too?), these laws are called "competition" statutes.
I understand the difference between a cartel and a monopoly, thanks:) but they fundamentally act the same economically (if you assume no one cheats on the cartel). They both restrict output and raise price above the competitive level. Cartels are never legal in the US, while monopolies can be legal if gained by legal means (developing a new product, IP laws, etc etc.)
Sure, but because Apple doesn't have a monopoly on MP3 players, it's legal. If apple contacted all the other MP3 player manufacturers, and they agreed (in a smoke-filled room, no less) to fix the price of all MP3 players everywhere, THAT would be illegal.
This is the difference between vertical restrictions on price (i.e. Apple the manufacturer, and downstream retailers) and horizontal restrictions (all oil-producing companies and the price of oil).
This concludes the daily antitrust lesson:)
Re:post i made somewhere else right after i saw it
on
The Matrix: Resolutions
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· Score: 2, Informative
Oh, and here I was thinking the Oracle "allow[ing] her old shell to be destroyed" was because Gloria Foster, the actress who played the Oracle in 1 and 2, died in the middle of filming. But I'm sure the Wachowskis were intending to use a mystical, pseudo-bullsh*t explanation all along, just like with every other aspect of the movie, so that cubicle philosophers could fill in the details for them.
This isn't due to the failure of any particular economic theory; you cannot apply generalized models that assume perfect information onto a practical phenomenon. The theory doesn't fail, it just doesn't apply. For example, one theory of competition asserts that price falls to marginal cost assuming no barriers to entry, perfect information, no transactions costs, etc. However, if in studying any particular market, like the Chicago wheat futures market, one notices that there are in fact substantial transactions costs and hence the price for grain exceeds the marginal cost of producing it for a given farmer, he does not shout, "Aha! I have disproved the theory of perfect competition!" Instead, he realizes that aforesaid "theory" is only conceived in the very special case described, and goes back into his toolbox for another theory with fewer or more generalized assumptions.
Slashdot Mirror
Neal Stephenson works for Blue Origin as a consultant. Reference here.
The size of the profit (even if I believe his numbers) is irrelevant without considering both the number of units moved and the size of the profit margin. In MS' case, even if they are only making 10 bucks a copy on XP (which I highly doubt), the marginal cost to make it is like 50 cents, so they can essentially print money. However, he's right about the longterm viability of the operating system business; but if he doesn't think that Apple would switch places with MS from a pure business standpoint, he's wrong.
It seems to me that this can only possibly be a good deal if the game's creators are able to restrain themselves from trying the same thing over and over again. If this guy finds himself unable to unload his land because the company sold 5 plots just like his a few days later, he's gonna be up the creek.
:)
Think of land as money, and the game's creator as the central bank. For a while, you can print money and become rich as long as no one expects inflation; as soon as they start to expect inflation, though, the jig is up.
We'll see if the game is more like the central bank of the US or the central bank of the Weimar Republic over the coming weeks
If the only way Google makes money is by investing their IPO cash, the stock would be worth about 10 to 15 bucks a share, tops. Why would you give money to a company if it was planning on lending it (or investing it)? Why not just invest it yourself and save on overhead? You think Google is better at managing money than Fidelity or Morgan Stanley? Of course not!
Google uses the money that we gave them to finance its growth. Its price/earnings multiple is so high because investors have expectations that the company will grow very quickly (although like a pre-bubble internet company, it would need to grow revenues by leaps and bounds to justify the multiple it now commands).
Ironic - that's almost the exact same response that many of the cheaters caught by Lou Bloomfield from my school, the University of Virginia, gave when accused of cheating. "Lots of papers are about the same topic, and there are only so many ways to describe [why the sky is blue/the photoelectric effect/whatever the paper was about]; THAT's why my paper uses the exact same words as my frat brother Tommy's."
I'm too lazy to dig out the slashdot story about the incident, but I do find another instance of denial in the face of obvious plagiarism amusing.
Yeah, or when car companies get sued because their cars, when driven in perfectly ordinary ways, catch fire and explode when bumped from behind, despite the fact that their maker knew about this problem and decided not to correct it.
That's definitely not Ford's fault.
This guy is modded plus five? Are you guys serious?
1. "Products that are more highly demanded are sold for higher prices! Film at 11."
2. insert rant on advertising and its harmful affects on consumer welfare
3. submit to slashdot
4. insert hackneyed, trite cliches and catchphrases.
5. ???
6. Profit!
Samsung came out with an MP3 phone with 64 megs of storage (in the days when 128mb was considered large and 256mb unheard of) many years ago for Sprint, the Uproar. It never seemed to sell well even though it got pretty good reviews. The battery life was decent; 10 hours of playtime off a full charge, and the ring came over the headphones.
Here's a link.
Brilliant!
The title is grammatically correct anyway. Rainbows (plural noun) end (verb) - multiple rainbows come to a stop. Heh.
I know you probably at least looked at the Prospectus a little bit, but if you read Larry Page's entire letter, you'd realize this isn't true. The IPO is utilizing a two-tiered voting structure, with two types of stock. The types (A and B) are identical except that type B owners have 10 times as many votes per share as type A owners. As Larry mentions, many media companies employ this method. In practice, Larry, Sergey and Eric will hold onto enough Type B stock that even if (say) Microsoft bought all the outstanding Type A stock, it would still have a minority share of voting rights.
Also, one of their essential corporate values (it's in the prospectus!) is "Don't Be Evil." Which is kinda cool.
I still think it's a good idea. I wonder what else I missed.
I've had about 30 hours of graduate level economics here at UVA, I had the exact same idea a while back, and I still haven't found anyone who could tell me why it was a bad one, other than the traditional "minimum wage laws cause unemployment" dross from Chicago-school disciples. Of course, there is no way in hell this would ever be passed, as any company that operates internationally would be dead against it and easily buy off enough votes to defeat it. I'm not sure the American minimum wage (which despite the complaints from Republicans has fallen in real terms since the late 70s) need be the standard - two dollars an hour would be far more than what many garmet workers in Southeast Asian sweatshops get, yet perhaps close enough to American wages that the costs of moving operations overseas would overwhelm any benefits of lower wages there.
*shrug* I'm sure some Friedmanites will crawl out of the woodwork to insult us, but I agree with your idea.
At my hometown park of Turner Field, ERA, batting average, etc as displayed on the jumbotron are recalculated after each plate appearance. It was fun to watch Bobby Hernandez' ERA skyrocket in realtime!
In related news, I'm going to see Schilling's first start of the year next Tuesday to catch the O's/Sox game in Camden Yards (driving up from Charlottesville, VA). Should be awesome.
Microsoft offered internet explorer for free not to control the internet browser market, but to maintain its monopoly on the operating system market. it viewed netscape plus java as a threat because it had the ability to launch platform-neutral applications, thus taking over the role that windows was fulfilling. that's what the government thought was illegal and what the trial was about.
Wow - the part at the end, where Disney sued a toy shop for violating a copyright that they don't own, is telling. What greedy pricks. I was looking over a copy of the Encyclopedia Brittanica 2015 edition (which conveniently fell through a time warp into my lap, open at the appropriate page), and it describes the Disney Corporation as "a bunch of mindless jerks who were the first against the wall when the revolution came." Funny, huh?
They're also enriching the stockholders of those companies, most of whom are rich. In the words of the Guinness Cartoon Guys in the new TV spots, Brilliant!
Loved the parent's subject heading :) Thanks dude.
Actually, the contracts can specify selling only at MSRP. Stores can purchase iPods at lower prices, but Apple pulls their supply if it catches them discounting. They do this to assure stores a good profit margin so they spend their own resources advertising the product.
Say Best Buy sells an iPod for 399(MSRP), and Joe's DisKount ElectroniX sells it for 349 next door. Best Buy spends money advertising the availability of iPods, hires salesmen, etc. Joe is a 1-man shop with no ads, except for a big sign on their front window that says "IPODS: 349". They're located right next to Best Buy.
From Apple's perspective, Joe is freeriding off the efforts of Best Buy. Best Buy is pissed off because it loses sales to Joe from keeping it's retail price up, so it stops promoting the product and drops it's price. Apple is pissed off because no one knows about its product except for tech nerds who scour the internet review sites. Therefore, antitrust law tends to allow retail price maintenance in the absence of monopoly.
I think you're exactly right - the reason Nintendo got in trouble was because it colluded. I thought it was about the price of cartridges also, not about systems, but i could be wrong.
Sorry, I think we have a difference in terminology. "Antitrust" in the American legal system refers to laws against unfairly restricting competition, whether by one firm or several. The primary statute is the Sherman Antitrust Act of 1890, so that's where the name comes from. In Europe (maybe in Canada too?), these laws are called "competition" statutes.
:) but they fundamentally act the same economically (if you assume no one cheats on the cartel). They both restrict output and raise price above the competitive level. Cartels are never legal in the US, while monopolies can be legal if gained by legal means (developing a new product, IP laws, etc etc.)
I understand the difference between a cartel and a monopoly, thanks
Hope that helps.
Sure, but because Apple doesn't have a monopoly on MP3 players, it's legal. If apple contacted all the other MP3 player manufacturers, and they agreed (in a smoke-filled room, no less) to fix the price of all MP3 players everywhere, THAT would be illegal.
:)
This is the difference between vertical restrictions on price (i.e. Apple the manufacturer, and downstream retailers) and horizontal restrictions (all oil-producing companies and the price of oil).
This concludes the daily antitrust lesson
Oh, and here I was thinking the Oracle "allow[ing] her old shell to be destroyed" was because Gloria Foster, the actress who played the Oracle in 1 and 2, died in the middle of filming. But I'm sure the Wachowskis were intending to use a mystical, pseudo-bullsh*t explanation all along, just like with every other aspect of the movie, so that cubicle philosophers could fill in the details for them.
Yeah, that's probably it.
This isn't due to the failure of any particular economic theory; you cannot apply generalized models that assume perfect information onto a practical phenomenon. The theory doesn't fail, it just doesn't apply. For example, one theory of competition asserts that price falls to marginal cost assuming no barriers to entry, perfect information, no transactions costs, etc. However, if in studying any particular market, like the Chicago wheat futures market, one notices that there are in fact substantial transactions costs and hence the price for grain exceeds the marginal cost of producing it for a given farmer, he does not shout, "Aha! I have disproved the theory of perfect competition!" Instead, he realizes that aforesaid "theory" is only conceived in the very special case described, and goes back into his toolbox for another theory with fewer or more generalized assumptions.