I was really intrigued by this story on NPR about Apple’s stock price and Kyle Conroy’s compilation of Apple prices vs. today’s Apple stock value because… I’ve been taking part in exactly this sort of “concept investment”.
Before the iPhone was released, I had looked back at Apple’s stock and noticed that if I had bought Apple stock instead of an iPod, I would have had thousands of dollars instead of an aging (but still working) iPod. This thought gave rise to my “free iPhone” plan, instead of buying an iPhone, I would buy the equivalent in Apple stock. When increase in Apple stock price and decrease in iPhone price converged, I would use my investment gains to buy an iPhone. As an added benefit, Apple would be on the second or third generation of the product by then, and I would be able to get the latest technology.
The iPhone was first available for purchase on June 29, 2007. I didn’t have a trading account at the time, and I missed that day by a couple days while I set up an account, but by July 7, 2007, I had $1000 in an account and purchased 5 shares of stock for $672.80. The larger 8GB version was priced at $599, so that was as close as I could come to the real price without being under.
My project was off to a great start; by September of that year, the price of the 8GB phone was down to $399. I was well on my way to a free iPhone, but the stock didn’t rise as fast as I was hoping:
The stock rose until the end of 2007. At Christmas I had *almost* enough gains to buy an iPhone, but not quite. The stock tanked and by October of the following year, I had lost money. That’s when I got tired of waiting and abandoned the experiment… I bought a 16 GB iPhone 3G.
I should have done this experiment with an iPhone 3G, because the stock doubled in value from October 2008 to October 2009. I still have the investment, and today I have nearly doubled my money. My account has $613 more than it did when I started, so clearly I could have bought an iPhone by now, even without a data plan.
to buy something on eBay? Shouldn’t it just take one or two? Or maybe it shouldn’t take any.
I just ordered Radiohead’s new album, In Rainbows, for about $5. You can only pay in Pounds Sterling, but the price is entirely up to the buyer (so you can choose to pay £0.00 if you so desire). The business model relies on consumers paying for something they can get for free, where I think any motivation to pay nothing is actually driven by inconvenience rather than perceived value. I tend to leave pretty good tips at restaurants, so I have no trouble conceptualizing spending a little extra simply so that someone gets paid a little extra. I do think that the difficulty of making micropayments by typing in credit card numbers and similarly complicated transactions is holding back a lot commerce. I’m always optimistic that things will be more efficient in the future, but check out my third point in my 2003 post on a similar topic.
Hacking Netflix has a video clip of the new Netflix feature that I am not lucky enough to have (yet): streaming movies. Despite what the New York Time’s says, I think Netflix is poised to continue their success. They’re smart enough to have known that DVD-based distribution has a limited life span and that online distribution will be huge. They’ve come to the market early with a huge subscriber base, and there’s no reason they won’t perfect online distribution just as they perfected mail-based DVD distribution.
It was obvious (and preannounced) that Netflix would have some sort of online offering this year, but I do find the pricing format interesting. In the same way that $0.99 gets you a great – or a horrible – song on iTunes, Netflix seems to have streaming minutes that all cost the same. A good minute is the same as a bad one, but a per minute charge is nice you end up disliking a movie. This could even change attitudes about the home movie walk-out. (I have a hard time stopping a bad movie because I feel like I’ve invested something in it. That feeling could be reversed if it was costing me to continue watching.)
I have to wonder whether Netflix royalties will be paid on a per minute basis too. If they were, and the Netflix market was big enough, longer movies would actually be worth more per viewing. I assume the industry currently prefers short movies whenever possible, as they can have more showings in theaters.
For anyone trying to access Law School Discussion today – I’m doing some work and access to the site is on and off. Stay tuned.
Update: It’s Sunday now and I’m still working. After upgrading some applications there is a problem executing php files that use MySQL. If you know about this stuff and want to help, send me a note.
Zillow is the hot new real estate site brought to you by Richard Barton and David Beitel, the founders of Expedia (dot cooommmmm). The concept is to analyze real estate data to generate estimates of property value for any property. Real estate is a industry that has traditionally required expert knowledge and access to specialized resources. Steven Levitt calls this information asymmetry. Real estate brokers have valuation experience and access to private databases; home buyers do not.
Zillow will do for real estate what the major travel sites did for travel. As technology became accessible to the masses, the travel industry could no longer keep the information gateways closed. People got computer training and could punch some travel dates into a computer just as well as a travel agent could. The expertise and access gap between travel agents and everyone else is approaching zero, and it now feels ridiculously inefficient to talk to someone who is entering your information into a computer.
Real estate will undergo the same transition. The popularity of digital cameras and real estate listing sites like craigslist and FSBO sites (NYT Article) are together creating listing databases that contain just as much information as proprietary real estate databases. In Boston, it’s typical to hire a realtor just to rent an apartment. The renter walks into a little run down shop and a guy wearing a Goldshlager shirt runs a query: “let’s see, 3 bedroom apartment in the Fenway area for under $3000… I can show you some places.” That guy gets one month’s rent for hitting “search” and unlocking a couple doors.
In many cases, the buyer (or renter in the example above) will actually have more competence to analyze the potential transaction. For starters, the buyer is more interested than the “expert”. If the information and tools to execute these transactions can also accessed by the buyer, a market-driven system becomes more efficient. Zillow is an important step in the transition.
Zillow will be popular for other reasons. Most significantly, home ownership really is the dream of most US Americans. Those who rent wish they could afford to buy, and those who own want to upgrade (either by improvement or by buying something better). Why does “The Learning Channel” have so much home improvement programming? And why is the Travel Channel always showing shows about “amazing vacation homes”? This is what the public wants – we want to buy homes, improve homes, and obsess over the same. Zillow will help us do that.
Western Union is no longer offering telegram service, although the website still has a little “your message here” picture right next to the announcement that says they don’t offer this service.
I’m too young to have ever sent or received a telegram, and I have to wonder whether what Western Union was calling a “telegram” in recent years had anything to do with a telegraph.
I’m amazed that Western Union was offering anything that even resembled a telegram, but I’m also amazed that people are still using fax machines. A fax machine makes a crude scan of a document, dials-up another fax machine as though it were an analog phone, and then slowly transmits the image to another machine. All this usually happens within ten feet of perfectly functioning computer connected to a high speed global network. This is almost as ridiculous as using a cell phone to call Western Union to order a telegram.
When HitBox and WebTrendsLive ceased offering their free web traffic measuring services several years ago, countless* individual and small business “webmasters” (now an obsolete term I think) had to switch over to Sitemeter to get nice charts of their web traffic. My site is an example.
These are hosted services so they incur expenses, but the prices these companies were charging to analyze server log files were well out of the range of all but corporate brochure-style sites. A site funded by advertising revenue just didn’t generate the hundreds or thousands of dollars of monthly fees to pay for analytics. Only site owners who had higher pageview to profit ratios could afford deluxe tracking software.
Urchin has been offering a great analytics product that I use on my server, but only because my hosting company negotiated a bulk license making it affordable. Google’s acquisition of Urchin meant they would soon be updating the software and lowering the price, as they tend to do. (Keyhole was a couple hundred dollars before it became Google Earth and available for free.)
It’s no surprise then that the former Urchin hosted service is now being offered by Google for free, but it is exciting. What’s most interesting is the integration of website analytics to the Adwords advertising program. Presumably, the increased advertising revenues will subsidize the hosting costs. The web has granted us an amazing amount of data, and we’re still taking baby steps towards making sense of it. It’s worth remembering that not everything can be measured in pageviews, unique visitors, purchases, and ROI. I will be checking my site stats at least daily though.
*I use “countless” in the expressive sense – meaning “many”. Surely a web analytics company has some method of counting their subscribers.
Yahoo! answers Google Maps with their own updated version – very similar to Google’s, with the ability to drag and zoom, and it’s very fast.
Yahoo is also offering an API so that people can integrate other data with the map. One example of this is MashUpComing.com, which plots upcoming shows from upcoming.org (a recent Yahoo! acquisition) onto Yahoo! maps. The result is pretty cool, but – as the name suggests – shows are more about when than where, which is why upcoming.org is organized into metros rather than cities (which also makes it ridiculous that people have created a Cambridge metro when there’s already a perfectly good Boston one).