Business and Financial News

The Free Press WV

►  Taylor said to impress Trump for Fed chairman as Warsh slips

Stanford University economist John Taylor, a candidate for Federal Reserve chairman, made a favorable impression on Donald Trump after an hour-long interview at the White House last week, several people familiar with the matter said.

Former Fed board governor Kevin Warsh has meanwhile seen his star fade within the White House, three of the people said. They would not say why but Warsh’s academic credentials are not as strong as other candidates, and his tenure on the Fed board has been criticized by a diverse group of economists ranging from Scott Sumner to Nobel laureate Paul Krugman.

Trump gushed about Taylor after his interview, one of the people said. The president has always been prone to hiring people with whom he has a good relationship. However, he told the Wall Street Journal in July that he would “like to see rates stay low,“ and Taylor is the namesake of a well-known monetary policy rule that would generally advocate higher interest rates.

Warsh remains on Trump’s shortlist candidates to lead the central bank along with Taylor, the people said. The others are the current Fed Chair Janet Yellen, Trump’s chief economic adviser Gary Cohn and Fed governor Jerome Powell.

Warsh didn’t respond to a request for comment. Taylor declined to discuss the Fed search when approached at a conference in Boston on Friday.

In addition to Trump’s deliberations on Fed chair, he is considering appointing Treasury Department official David Malpass to a governor’s seat on the Fed board, one person said. Malpass, an economist, was an economic adviser to Trump during his campaign and currently serves as Treasury undersecretary for international affairs.

Trump interviewed Taylor, 70, on Wednesday with his chief of staff John Kelly, one of the people said. The economist checks many of the boxes White House officials are looking for: He served on the Council of Economic Advisers under three presidents, and was an adviser on the presidential campaigns of George W. Bush and John McCain. He was Undersecretary of the Treasury for International Affairs from 2001 to 2005.

Taylor is a monetary policy expert whose equation on policy-rate settings is a standard reference tool used by central banks and economists around the world. He also leans against unbridled Fed discretion and has said the central bank needs to be more transparent about its strategy.

U.S. central bankers are gradually removing economic stimulus under Yellen, a strategy Taylor has said he agrees with. The Fed policy rate is now set at 1 percent to 1.25 percent. How high it should go to achieve a neutral level—a rate that neither stimulates nor crimps the economy—is a matter of debate among economists, including Taylor.

Taylor said in March testimony before a House subcommittee that a long time ago he estimated the neutral rate would be about 4 percent, or 2 percent in real terms after subtracting the Fed’s 2 percent target inflation rate.

Taylor has been a favorite witness for House Republicans critical of Fed discretion. But last week at a Boston Fed conference he said he didn’t think “rules should be used as a way to tie central bankers’ hands.“

“There are reasons to run policy with a strategy,“ he added.

Yellen’s first term expires in February. Trump has complimented her work and could reappoint her, but many of his aides are recommending against it.

Warsh, who holds a law degree, may be falling out of favor as Trump considers candidates like Taylor—a Ph.D. economist—with stronger expertise in monetary policy and institutional leadership, key attributes for the Fed chair. As a Fed governor from 2006 to 2011, during the financial crisis, Warsh leaned hard against providing further monetary stimulus in 2010 with unemployment above 9 percent and inflation decelerating.

Nevertheless, Bernanke, in his 2015 memoir “The Courage to Act” called Warsh’s political and markets savvy “invaluable.“

►  Median weekly earnings of full-time wage and salary workers are $859 in 3rd quarter 2017

Median weekly earnings of the nation’s 114.9 million full-time wage and salary workers were $859 in the third quarter of 2017 (not seasonally adjusted).

This was 3.9 percent higher than a year earlier, compared with a gain of 2.0 percent in the CPI-U.

Business and Financial News

The Free Press WV

►  Shareholders wrestle with control freaks

Scan stock markets around the world, and you’d be forgiven for thinking democracy was under attack.

The principle of one share, one vote has been around since companies started selling shares to the public in the early 17th century. Today its recurring nemesis-dual-class shares, which grant different classes of owners different voting rights-is back, big time. And exchanges that have shunned dual-class share listings are wrestling with an age-old dilemma: Should we or shouldn’t we?

For exchanges, the appeal of such listings is plain enough. Competitive pressures among stock markets are intense. Plus, there are some big technology listings on the horizon, including Dropbox and Mobvoi, an Alphabet-backed Chinese artificial intelligence startup. So Hong Kong, London, and Singapore are weighing whether, like some of their competitors in New York and elsewhere, they should list dual-class shares.

“There is an air of inevitability around it,” says David Smith, Asia head of corporate governance at Aberdeen Standard Investments. “We are mindful of the risk of contagion. Once one regime allows it, others will surely follow.”

The lessons for exchanges that have steered clear of dual-class share listings are equally obvious. Take Hong Kong. Over the past decade, Hong Kong Exchanges & Clearing, a natural listing venue for Mainland Chinese companies, lost out to the U.S. on $34 billion in initial public offerings featuring weighted voting rights, including Alibaba Group Holding, the world’s largest IPO. “A big concern for HKEX is that there will be more really significant companies like Alibaba, and Hong Kong will lose them if it doesn’t do something to accommodate the special governance arrangements they have,” says Robert Cleaver, a corporate lawyer in Hong Kong for global law firm Linklaters. “There is a strong feeling in the market that they have got to do something.”

Dual-class structures have long been seen as the niche province of newspaper barons (the Sulzbergers at the New York Times, for example) and automakers (the Fords, say, at Ford Motor Co.), and drugmakers (Roche Holding). They allow founding families to retain control and raise funds at the same time, wielding outsize powers at the expense of ordinary shareholders. Because of that, they’ve been stirring controversy for decades.

In 1925, Dodge Brothers Motor Car Co. caused a ruckus on the New York Stock Exchange when the family owned 1.7 percent of the company but had total voting control. The imbalance eventually led to a 1940 NYSE rule outlawing new dual-class stock issues. Then, in the 1980s era of corporate raiders, the tables turned as dual-class structures were increasingly used as armor against takeovers. In the end, after some companies threatened to list on the upstart Nasdaq, the Big Board relented and let dual-class listings back in.

Today’s founders of technology startups have followed in the footsteps of industrial and manufacturing magnates of old, embracing a governance model that allows them to tap capital markets yet retain control. In 2004, only six years after it started doing business, Google Inc. went public with an eye-popping $23 billion valuation, a price-earnings ratio of 80-and, through its dual-class share structure, a huge bet on its creators, Larry Page and Sergey Brin.

Other tech companies soon followed: Facebook, Groupon, and, from China,, Baidu, and Alibaba, which gave special voting rights to management partners. One percent of U.S. IPOs had weighted voting rights in 2005, according to Sutter Securities Inc. in San Francisco; a decade later 15 percent did, with technology companies making up more than half the total.

Given the storied but checkered history of dual-class shares, it’s perhaps inevitable that the weight of opposition would shift against them once more. It peaked in March when Snap Inc. went public, offering new shareholders zero voting rights. For many, this was a listing too far. (As of September 15, Snap shares had fallen 10 percent.) “The issue has really been brought to the fore by Snap,” says Mark Makepeace, chief executive officer of FTSE Russell, an index provider owned by the London Stock Exchange Group

The worldwide enthusiasm for dual-class shares isn’t just about money. Nabbing big listings brings prestige and increased trading volumes as well as fees to the winning exchange. “You can argue that in this economy it could be the vision, could be the product, could be the patent, could be a lot of things that are intangible,” says Charles Li, head of Hong Kong’s stock exchange operator. “In this new world, we need to look at that, give credit to that particular power.”

Dual-class shares may be about to make a comeback in Hong Kong. They first appeared in the former colony in the 1970s, only to be scrapped more than a decade later amid a wave of public-interest concern. HKEX currently offers two platforms: the main one, for established profitable companies, and a second, its Growth Enterprise Market. It recently consulted the market about introducing a third board, where dual-class listings would be permitted.

Hong Kong’s push comes amid a shrinking global IPO market. In 2006 more than 2,100 companies raised $293 billion through initial share sales, according to data compiled by Bloomberg. Last year that number tumbled to $144 billion. HKEX’s move could have a domino effect in other regions. Bankers, traders, and the exchanges themselves are all “very powerful forces” in favor of generating new business, says Jamie Allen, secretary general of the Asian Corporate Governance Association in Hong Kong. “Other exchanges have told us that if Hong Kong goes ahead,” he says, “they will have to consider it.”

Singapore Exchange, Southeast Asia’s largest stock market, is poised to join the movement. The Singapore government has backed a dual-class share plan as part of a package to drive economic growth over the next 10 years. Aware of how controversial this issue is, SGX has taken the unusual step of having a two-stage consultation aimed at winning over the market. And in London, the Financial Conduct Authority raised the possibility of relaxing its listing restrictions in a February discussion paper on the effectiveness of its markets.

For a while, says Jay Ritter, a finance professor at the University of Florida, it looked as if dual-class opponents were losing the debate as more companies chose the model and exchanges increasingly considered allowing such listings. Exchanges that missed out, as HKEX did in the case of Alibaba’s mega-IPO, must be kicking themselves, says Kai Li, a professor at the University of British Columbia’s Sauder School of Business. After all, she says, “dual-class firms are a new breed and are creating shareholder value.”

But Maurice Teo, a representative of the CFA Society Singapore, says dual-class shares, with their differently weighted voting rights, are inherently not in investors’ interests. He says exchanges, in their eagerness to gain a competitive edge, might be overlooking this.

What’s more, says Aberdeen’s Smith, a dual-class structure is hardly a prerequisite to corporate prosperity. He says there are many successful tech companies with single-class share structures. Facebook Inc. shares have soared more than 350 percent since their May 2012 debut through September 15. In the same period, the S&P 500 rose 92 percent, Microsoft 153 percent, and 352 percent.

Pressure against weighted voting rights has mounted. In September, just days before a shareholder challenge was coming to trial, Facebook called off plans for a new share class that would have further cemented co-founder Mark Zuckerberg’s control. Partly goaded by investors who associate dual-class shares with weak corporate governance, MSCI, FTSE Russell, and S&P Dow Jones Indices have joined the opposition.

MSCI Chairman and CEO Henry Fernandez calls the rise of dual-class shares a “problem in the world.” In July, FTSE Russell threatened to boot more than 30 companies, including Hyatt Hotels and IT provider VMware, off its indexes unless ordinary shareholders have at least 5 percent of voting rights. Days later, S&P put a block on such shares in future listings on its U.S. indexes.

The stands taken by the index titans were a symbolic win for opponents of dual-class shares. “Companies like to be included in indexes since it usually results in a higher share price,” Ritter says. He says the moves by the index firms will discourage companies from adopting the structure.

Big asset managers-including Norges Bank Investment Management, the world’s biggest sovereign wealth fund, and BlackRock Inc.-have also joined the chorus of dissent. But to what end? The Norwegian fund is among the largest investors in Facebook and Alphabet Inc.; BlackRock owns Snap shares. Pru Bennett, BlackRock’s Hong Kong-based head of investment stewardship for the Asia Pacific region, says the money manager supports one share, one vote and opposes exchanges’ plans to list dual-class shares. When BlackRock invests in companies with weighted voting rights , she says, the structure’s risk is taken into account.

Investors don’t always have a choice. The rise of index-linked passive investing means trillions of dollars are funneled into dual-class stocks automatically, regardless of corporate governance concerns. So who, then, is going to stem the tide? Only the fund management industry is in a position to do that, says George Cooper, chief investment officer at Equitile Investments in London.

“We are hiding behind the index process,” he says. “The industry is abdicating responsibility. The buck stops with us.”

►  American Express fee accusations get U.S. high court hearing

The U.S. Supreme Court accepted a case that could roil the credit-card business, agreeing to consider reviving government allegations that American Express Co. thwarts competition by prohibiting merchants from steering customers to cards with lower fees.

A federal appeals court had thrown out the lawsuit, saying the U.S. government and 11 states failed to prove that the American Express rules harmed cardholders as well as merchants.

The Supreme Court’s decision to take the case offers new hope to retailers trying to reduce the $50 billion in fees they pay to credit-card companies each year. It’s a boost for Discover Card Services, which says the rules undercut its ability to compete with American Express.

AmEx shares dropped 1.3 percent to $91.63 at 9:45 a.m. in New York, the biggest drop since August and the worst performance in the 67-company S&P 500 Financials Index. Discover gained as much as 2 percent, the most since September.

The states asked the Supreme Court to intervene, pointing to the “astronomical number” of credit-card transactions each year—22 billion totaling more than $2 trillion in 2011, according to court documents.

“Whether assessed from the perspective of consumers or from that of merchants, this case’s importance cannot be overstated,“ Ohio officials argued for the group.

While the U.S. Justice Department also sued American Express, it didn’t join the appeal to the Supreme Court. The Trump administration said that, while the appeals court ruling was wrong, the case didn’t meet the Supreme Court’s usual standards for review.

The justices will hear arguments early next year and rule by June.

Antitrust enforcers accused American Express of using its leverage over merchants to thwart competition from cards that would charge retailers lower fees. American Express’s agreements with retailers contain an “anti-steering” provision that bars them from doing anything to encourage the use of competing cards, such as offering discounts.

The Justice Department and states said the effect was to thwart rivals like Discover, which tried in the 1990s to adopt a low-cost business model, and to ensure that retailers would continue to pay high fees.

American Express urged the Supreme Court not to hear the case, saying the appeals court was correct. The company said that merchant fees help pay for cardholder rewards and that antitrust enforcers failed to account for those benefits.

“Amex uses the vast majority of merchant discount fee revenue to pay valuable benefits to cardholders to incentivize them to obtain and use an Amex card at that merchant rather than cards issued on other networks,“ the company argued.

The lawsuits originally targeted Visa and Mastercard over their anti-steering policies as well. Those two companies settled the claims in 2010.

►  Import prices rise 0.7% in September on higher fuel prices; export prices increase 0.8%

U.S. import prices rose 0.7 percent in September after increasing 0.6 percent the previous month; prices increased 2.7 percent over the past year.

U.S. export prices advanced 0.8 percent in September after a 0.7-percent rise in August.

Export prices rose 2.9 percent over the past year.

Business and Financial News

The Free Press WV

►  Electric cars taking off; what’s the problem with an electric pickup truck?

Americans no longer face a lack of choice when choosing an electric car – unless, that is, they want a pickup truck.

Although sales of electric vehicles are soaring, with 105,000 plug-in vehicles sold by August this year – a 35 percent increase on the same period in 2016 – car manufacturers have yet to put an electric truck on the road.

This could be about to change, and it has big implications.

One in every six vehicles bought in the U.S. is a pickup truck. Ford’s F-series truck has been America’s bestselling car for 35 years, shifting 500,000 units so far in 2017. America’s second most popular car is also a pickup truck. And its third.

Tesla’s chief executive Elon Musk announced his intention to launch “a new kind of pickup truck” in July 2016, as part of his master plan for the company. He has tweeted he would unveil the new design by April 2019.

He’s not the only one to get in the game, with several other start-ups announcing plans to launch an electric pickup in the next few years.

Workhorse says it will go into production on its W-15 truck in late 2018, initially selling to fleet operators with a consumer version to launch shortly after. It has 5,000 pre-orders.

Havelaar Canada says its electric pickup, the Bison, will come onto the market in 2020 or 2021. Via Motors anticipates putting an electric pickup on the road in the next two years.

Other companies proposing an electric truck include Bollinger Motors and EV Fleet. Even Ford has said it plans to roll out a hybrid F-150 pickup by 2020, although an all-electric version remains off the radar for now.

“Running on electricity is perfect for pickups. It makes the truck a more complete work station where you can plug in all your tools, including your power tools – even your arc welder. People have been denied the choice of an all-electric pickup truck and we want to make it right,“ Havelaar Canada said in an emailed statement.

So why has the idea been so slow to catch on? Launching an electric pickup truck comes with its own set of difficulties, which manufacturers have attempted to address as they bring the models to market.

Pickup trucks are equipped to deal with heavy loads and tough terrain, and are designed for functionality and reliability. Perhaps the most pressing issue is how far their vehicle can travel before the battery runs out.

“It’s range anxiety on steroids, because suddenly you’re towing something or you’ve got a big load on the back,“ Steve Burns, the chief executive of Workhorse, said in an interview. He’s attempted to assuage these concerns with a gasoline range extender, allowing the truck to continue beyond its 80 to 100 mile electric-only range “so you never have to sweat,“ he said.

Improving batteries so that they can carry large loads for long distances is a challenge. Heavy batteries can take a toll on efficiency, as they have to draw on their own power to move themselves, as well as the vehicle.

Tesla plans on cutting its teeth on this issue by launching its electric semi-truck in September, although experts have questioned how they will achieve this. According to a paper published this year by academics at Carnegie Mellon University, a battery powerful enough to drive a semi-truck 600 miles would require a battery that weighs more than the cargo, due to federal regulations limiting the gross weight of trucks to 40 tons.

On a Tesla news blog, automotive expert Aaron Turpen has pointed to another potential safety issue:

There are safety concerns. Off-road driving becomes difficult when there’s a huge battery under the vehicle.

“With the problems the [Tesla] Model S has had in the past with undercarriage breaches on the highway, it’s easy to see concern when going fully off the road. Even the best of dirt roads are rough. Putting an under-pan, as Tesla has done may or may not work well with a truck,“ Aaron Turpen wrote on Teslarati.

Then there’s the cost. You can currently buy a Ford F-150 truck new for under $30,000. The Workhorse is selling for around $52,000, while the Havelaar Bison is expected to go on sale for $58,000 Canadian. Savings on gasoline over the truck’s lifetime, however, can help to offset the high upfront price tag.

“When you take the long view like that, like fleet managers do, our vehicle is the least expensive pickup truck that you can own,“ Burns added.

This leaves the question of whether truck drivers will be willing to swap their gas-guzzlers for a cleaner model that can’t roll coal.

“Some people dislike electric vehicles because of who likes them. But many people simply appreciate the performance. I think the performance advantage of EVs overcome some of that cultural bias,“ Peter O’Connor, an energy analyst at the Union of Concerned Scientists, said.

The environmental benefits of an electric pickup truck are clear. Pickups are less fuel efficient than the average car, with the most efficient pickup doing 24 miles per gallon compared to 40 mpg for a large car.

Transport is currently the single largest source of emissions in the U.S., overtaking the power sector in 2016.

Increasing the efficiency of these high emitting vehicles could be the best way to reduce transportation emissions, according to a briefing released in May by the Baker Institute for Public Policy at Rice University.

The paper found that, for every 100 miles, improving the fuel efficiency of a single Ford F-150 by 5 mpg would save the same amount of gasoline as a 6 mpg improvement to six Priuses.

It also points out that the vehicle displaced by a truck driver upgrading to a more efficient pickup is likely to be dirtier than that displaced by a new Tesla driver, who probably already drove a pretty efficient car to begin with.

►  White House: $4,000 more for families with business tax cuts

By slashing corporate tax rates, the Trump administration said Monday, the average U.S. household will get an estimated $4,000 more a year.

This stunning 5 percent increase was met with skepticism from tax experts and Democratic lawmakers who said the math was flawed. Spread across every U.S. household, the White House analysis claims it would generate “conservatively” an income jump totaling $504 billion, or about $200 billion more than the revenues currently generated by the corporate income tax.

With this new report, the White House is making a populist argument for its proposal to cut the 35 percent corporate tax rate to 20 percent. Trump has pitched his tax plan as supporting the middle class even though the details point to major companies and the wealthy as the biggest winners. Polls suggest that voters generally frown upon the idea of cutting taxes for businesses — essentially rewarding these firms for avoiding taxes by exploiting loopholes and keeping profits overseas.

“Trump complains about fake news — this fake math is as bad as any of the so-called fake news he has complained about,” said Senate Minority Leader Chuck Schumer, a New York Democrat. “This deliberate manipulation of numbers and facts could lead to messing up the good economy the president inherited.”

The analysis by Kevin Hassett, chairman of the White House Council of Economic Advisers, said that the considerably lower rate would spur more investment by companies, which would then boost hiring and worker productivity. The average income gains from the reduced rate would range from $4,000 to as high as $9,000, the administration said. Those figures, however, rely on research arguing that workers — rather than investors — would primarily benefit from the lower corporate rates.

“I would expect to see an immediate jump in wage growth,” Hassett said in a phone call with reporters, saying that the salary gains would also come in part from companies bringing back profits held overseas to avoid the relatively high U.S. tax rates.

Separate studies, including a 2012 Treasury Department analysis, found that the vast majority of any savings would go to investors, making it unlikely to push up wages as much as the administration has argued. The administration removed the 2012 analysis from the Treasury Department’s website after releasing its tax framework last month with Republican congressional leaders.

Outside economists said the income growth projected by Hassett appears to assume that workers appear to bear more than 100 percent of the burden of U.S. corporate taxes — a mathematical impossibility.

Jason Furman, Hassett’s predecessor under President Barack Obama, said on Twitter that the numbers in the report suggest that workers bear 250 percent of the costs.

Mark Mazur, director of the non-partisan Tax Policy Center, called the estimated income gains “absurd.”

“You’d have to have a tsunami of corporate capital coming into the United States — we’ve never seen that,” Mazur said.

Stocks surged after Trump’s election last year on the prospect of business tax cuts, but wage gains have been relatively tepid. The higher stock prices touted by Trump are a possible sign that investors would reap most of the benefits from lower corporate rates, although Hassett said he expects an increase in wages if the tax overhaul is passed.

For individuals and families, the Trump plan would reduce the number of tax brackets to three from seven and double the standard deduction. But it would also remove the personal exemption and possibly much of the deduction for state and local taxes — changes that could possibly increase taxes for many families. A preliminary analysis by the Tax Policy Center estimated that the proposal would cut business taxes by $2.65 trillion over a decade while increasing the tax burden on families and individuals by $471 billion.

Hassett criticized those findings in a speech this month as a “fiction” that is “scientifically indefensible” because critical details of the proposal remain unknown. But Hassett said enough details are now known about the plan to support his conclusion that it would lead to income gains and stronger economic growth.

Business and Financial News

The Free Press WV

►  Target expands Google Express offer nationwide to counter Amazon

Target, looking to keep pace with Wal-Mart Stores and, is expanding its pact with Google’s shopping service to the entire U.S. and will soon add voice-activated smartphone purchases.

The nationwide home-delivery service broadens an offering that’s been available in New York City and California for the past few years. Soon, shoppers will also be able to buy Target goods like Cat & Jack kids’ apparel and Archer Farms food by voice over some Android and Apple phones.

The move is Target’s latest attempt to attract more online shoppers as the holidays approach. In August, it acquired a software company that manages local and same-day deliveries, and it’s also now offering curbside pickup of online orders in the Twin Cities area. For Google, the deal extends the appeal of its online mall at a time when more shoppers are beginning their online product searches on Amazon.

Target’s online sales rose 32 percent last quarter, well behind the 60 percent jump seen by Wal-Mart, which joined Google’s online mall last month. E-commerce sales across all retailers are expected to swell by 18 percent to 21 percent from November to January, compared with last year’s growth rate of 14 percent, according to Deloitte LLP.

“We’re excited to offer this service nationwide in time for the busy holiday season,“ Mike McNamara, Target’s chief information and digital officer, said in a statement.

Target and Google will also let shoppers buy with Target’s store credit cards next year, which offer a 5 percent discount and free shipping. Purchases from Target made over Google Express include free two-day delivery for orders over $35. Also in 2018, customers will be able to pick up orders in-store and link their accounts to Google for personalized offers.

Google previously charged $10 a month or $95 per year for Express, but recently dropped its membership fee for the service as it struggled to keep pace with Amazon’s growth. Almost two out of three U.S. internet users shopped on Amazon in the second quarter, according to Wells Fargo analysts.

►  Amazon is making it easier for teens to use their parents’ credit cards, already the most popular online retailer among adults, is setting its sights on a new demographic: teenagers.

The company’s newest efforts are aimed at getting shoppers ages 13 to 17 to purchase items on its site – with approval from their parents. Teens can now log into and the company’s app using their own accounts to make purchases and stream videos. Their parents, meanwhile, can approve their purchases by text message or set spending limits per order. (Jeffrey Bezos, the founder and chief executive of Amazon, also owns The Washington Post.)

“As a parent of a teen, I know how they crave independence, but at the same time that has to be balanced with the convenience and trust that parents need,“ Michael Carr, vice president of Amazon Households, said in a statement. “We’ve listened to families and have built a great experience for both teens and parents.“

Analysts say the teenage market could be particularly lucrative for Amazon, as mall staples such as Aeropostale, Wet Seal and rue21 file for bankruptcy protection and shutter hundreds of stores. Many other retailers, such as Claire’s and Abercrombie & Fitch, are also struggling.

“Teenagers are at least as comfortable buying things online as their parents are, so it makes sense to go after them directly,“ said Jan Dawson, chief analyst at technology research and advisory firm Jackdaw. “This is a move that will get families deeper into Amazon, while also cultivating future Prime members.“

The company also said this week that it will begin offering Prime memberships to college students for $5.49 per month. (An annual Amazon Prime Student membership costs $49, compared with $99 for regular members.)

The announcements come as Amazon gains popularity among younger shoppers. Nearly half – 49 percent – of teenagers listed Amazon as their favorite website, a 9 percent increase from a year earlier, according to a survey by financial firm Piper Jaffray. Among other teen favorites: Nike, with 6 percent of the vote, and American Eagle, with 5 percent.

Under Amazon’s new program, teenagers can log into the site using their own credentials. They can shop online, stream videos and tap into the perks of their parents’ Prime memberships. Amazon notifies parents – either by text message or email – of any purchases. Parents can review each item, its cost and the payment method being used before finalizing the transaction.

“By default, parents approve every order,“ Amazon said. “Parents receive itemized notifications for every order and can cancel and return any item in accordance with Amazon’s policies.“

Amazon – which had annual revenue of $136 billion last year – accounts for roughly one-third of all online U.S. sales.

Click Below for More Financial News...

Page 1 of 376 pages  1 2 3 >  Last »

The Gilmer Free Press
Financial & Economy

The Gilmer Free Press

Copyright MMVIII-MMXVII The Gilmer Free Press. All Rights Reserved