Amazon to Revolutionize Textbook Market?

Textbooks are a necessary evil of the college experience.  They’re heavy, and in a single semester a university student can spend hundreds, if not thousands, of dollars just on required textbooks.  University bookstores give students pennies on the dollar to buy back books, while keeping used book prices at 70-85% of new books.   I always tell my students to look for used copies on Half.com, but publishers release new versions regularly to help keep prices high and stifle the used book market.

Well, there is some promising news on the horizon.  Amazon has announced that they are releasing a new version of the Kindle, designed to appeal to academic publishers.  If this works as planned, students will be able keep all their textbooks on a single portable device, just like they already do for music and video.  Obvious features the new Kindle will need are improved highlighting and note taking capabilities.  Cost effective color ePaper is probably still a couple years away, but that would definitely be beneficial for academic eBooks.  I’m curious to see how pricing will work with for this new endeavor, especially since there won’t be a secondary market for used eTextbooks.  Look for the Amazon announcement this Wednesday.

The Business Model of the Modern Maritime Pirate Organization

NPR’s Planet Money podcast did an excellent piece this week on the operations of Somali pirate organizations.  In light of all the pirate news coverage these days, I thought this was one of the most informative and interesting stories on the topic.  You’ll be surprised at how these organizations run as a business, yes there is an interesting business model behind Somali piracy.  These organizations outsource, use professional negotiators, and use financial models to understand the going market ransom rates.   I highly recommend a listen, the pirate segment starts at about the 9:45 mark.  Related, I came across a paper by a fellow GMU professor Peter Leeson (in the Economics department) about the law and economics that governed pirate organizations of yesteryear and probably still apply today (the title is probably the best I’ve seen for an academic paper!).  His website is a hoot, and he has a book called the Invisible Hook: The Hidden Economics of Pirates that was just released.

Is User Generated Content a Financial Albatross?

Connor Kyle pointed me to an interesting article on Slate.com about the very high costs of running a user generated content site.  Not surprisingly, YouTube is blowing through cash and not able to make enough ad-revenue to turn a profit.  In fact the article points out that YouTube’s anticipated $470M 2009 loss is more than 5 times than that of the struggling Boston Globe with an $85M loss.

User generated content sites that depend on ad sales as their primary revenue stream are classic two-sided platform networks.  Typically there is a start-up problem for revenue generation on these sites; the site must have enough users in order to attract big-spending advertisers.  However, once the magical user threshold is reached and advertisers come knocking, so much money has been invested in developing the technological infrastructure and operating costs are so high to maintain the large amounts of content and traffic that the site will need massive amounts of ad revenue to ever turn a profit.  Even the king of on-line advertising, Google, can’t figure out how to turn a profit on the most popular user generated content site on the Web.  What hope does this give to companies like Twitter who are still trying to figure out their revenue model?

MBA 734 Discussion Question – Google’s Prediction Markets

Is it a good idea to encourage ALL employees to trade in these markets?  Should insiders and/or highly uninformed people be allowed to trade?  Do they help or hurt the market?

Zappos’ real-time sales map

Zappos, the successful on-line shoe retailer, has introduced a new feature that displays real-time sales of their products on a map with location based on shipping destination.  You can watch flip-flop, sandal, and sneaker sales pop-up all over the country.  It’s an interesting feature.  I guess the point is to inspire people to buy products by seeing where they are being purchased.  No information about the customer is displayed, just the product sold and the general location to which it is being shipped.   It also doesn’t seem like you can zoom-in to a location, so customer privacy is not an issue.  It’s kind of fun to watch the arrival process of new orders and their geographic dispersion.  [via FlowingData]

MBA 734 – Threadless Discussion Question

In what other industries or areas would Threadless’ community-driven product development model work well?  And not so well?

NYC Church Twittering Story of Jesus

Trinity Church on Wall Street in NYC is using twitter to broadcast the Passion of Chirst play for three hours today beginning at noon.  Apparently the characters of the play will be tweeting their lines and the feed can also be received via email.  I’m not quite sure how I feel about this, on one hand it’s a novel use of technology to reach a wide audience and on the other hand it seems like the church is riding the twitter band wagon to get some publicity.  Either way, I guess if Shaq and Chelsea can use twitter to reach their audiences then why not a church?

Chelsea FC, Arsenal on Twitter

The iconic London football club has expanded their on-line presence with a new twitter account (twitter.com/stamfordthelion), which started on April 2nd.  I’m happy to say, however, that Arsenal FC, a much classier and more talented club :), created a twitter account a full 10 days before the blues; a clear indication that the Gunners are far more technologically savvy than the boys at Stamford Bridge.    This trend points to the obvious value for an organization to use twitter to provide timely updates to their customers, especially in fan-driven industries such as sports and entertainment.  Will twitter supplant gossip magazines as the primary means for fanatics to get information on celebrities and athletes?  Take a quick look at Shaq’s twitter page, he’s got over half a million followers!

MBA 734 – Social Networks Discussion Question

Online social networks have become ubiquitous in the past few years. What forms of value do users get from these services and who is most likely to sign up on LinkedIn versus other sites?

Colbert w/Biz Stone, Twitter co-founder

Biz Stone tells Colbert what the future holds for Twitter.

more about “Colbert w/Biz Stone, Twitter co-founder“, posted with vodpod