Amazon is planning to launch its own currency called Amazon coins. Matthew Yglesias argued that developmental economics helps provides some insight into why it’s doing this:

• Microsoft, Apple, Google and Amazon are trapped in a war of ecosystems. Apple has the advantage because it launched its app ecosystem before the other players in the game and so developers build apps for that ecosystem.
• In response to this Microsoft offers subsidies to particular developers who will build for its own ecosystems.
• This is similar to a centrally planned system as Microsoft picks the apps that it thinks consumers will demand.
• Amazon, on the other hand, announced with its system of coins that it would be giving out millions of coins for free.
• Thus they will artificially stimulate demand for apps. In anticipation of this demand, app developers have a reason to start building for the Amazon ecosystem.
• And where will Amazon get the money for this? By issuing debt. Its credit rating is so good that it can essentially borrow money for free to give a short term fiscal boost that ultimately turns its ecosystem into one that is self-sustaining.

Yglesias ends by noting that national governments could learn a thing or two from Amazon’s strategy. You should read the entire piece here.

Source: Slate

We have too many online logins. Governments are looking for a way to not only mitigate that problem but also to find a way to verify the people who use the internet. Here’s what they’ve come up with so far:

• Poor countries and several European countries prefer government issued ID cards.
• Those in America, England, and Canada though are suspicious about the government controlling all that information. They’re also skeptical about the cost.
• Instead they prefer to give over identification responsibilities to corporations. The reasoning is that institutions such as banks and mobile operators already have a fair amount of information about us and can use that information to identify us online.
• The way it would work is that there would be one standard adopted by all. You could choose to verify your identity through your bank or your mobile operator. The company behind it would earn a small fee every time your identity is verified through them, and government would save on the costs of running the system themselves.
• The American government has given $9 million to a pilot project that tests this out. The aim is to have half of all Americans using this system by 2016.

Read more about the conundrum that governments face, the privacy issues that this raises, and why this might improve (or hurt depending on your face) your dating prospects over here.

Source: The Economist

Ever wondered how it’s possible to get freshly squeezed orange juice all year round despite the seasonality of orange growing conditions? It’s because the entire process of producing the orange juice is a lot less natural than you would first think writes Duane Stanford:

• Coke – the company behind “Simply Orange Juice” – uses satellites to monitor orange groves to determine the ideal time to pick them.
• The squeezed juice is then kept in giant solos, chilled to about 0 degrees C for up to eight months. In season juice is mixed with out-of-season juice.
• When the juice is ready to be packaged it is sent through a 1.9 kilometer underground pipeline to Coke’s bottling plant.
• Then an algorithm is used to determine the recipe of the orange juice that is bottled.
• This algorithm was designed by the same person who designed Delta’s flight scheduling system. It analyzes up to 1 quintillion variables to determine the optimal orange juice blend.
• This algorithm changes daily as the weather and other conditions change to get the right mix of acidity, sweetness, and other attributes through adjustments to the ratio of ingredients and the addition of natural flavors and fragrances.

Read more about the orange juice production process over here.

Source: Business Week

Via: Kottke

Dell has opted to go private, delisting its shares from the stock exchange with the help of money from Silver Lake Partners, Microsoft, and the founder, Michael Dell. What does all this mean? Chris Umiastowski had some answers:

• Silver Lake Partners have a history of participating in such deals and that’s why they’re involved.
• Microsoft isn’t directly investing any money. Instead it has given the consortium a $2 billion loan. This does not give Microsoft voting power in the company.
• Microsoft might have had some conditions attached to the loan. If it did though those haven’t been announced.
• Dell benefits because it no longer has to worry about day to day fluctuations in the share price and can make long term strategic bets without worrying about investors who want short term payoffs.

You can read more over here. Over at Slate Matthew Yglesias points out that the move also allows Dell’s owners to avoid a large amount of taxes.

Source: WPCentral

Scientists say that they have discovered the remains of Richard III, King of England from 1483 to 1485. Those bones were then used to reconstruct his face to see what he would have looked like. The BBC looked at how this is done and how accurate the process is:

• The position of the teeth and eye sockets show us with a high degree of certainty the shape of the mouth and eyes.
• The nose used to be tough to predict because it’s mostly made of cartilage which quickly decays. However a recently discovered formula accurately predicts the shape of the nose based on the underlying bone structure.
• The ears are hard to get right. It’s possible to tell where they’re positioned and whether or not the individual had ear lobes, their shape can’t be determined.
• The amount of fat on the face, eye colour, skin colour, and hair style all have to be invented.
• There’s a tendency for reconstructed faces to look young. This is because the bones don’t give any indications of the age lines the person had.

Read more about the process, its accuracy, and how one reconstructed face ended up looking like Sir Patrick Stewart over here.

Source: BBC

If you have a few hundred gigabytes of data that you want to send then it’s faster to have FedEx come pick it up rather than trying to transfer it over the internet writes Randall Munroe. When will the internet finally exceed FedEx’s prowess?

• Total internet traffic is currently around 167 terabits per second.
• FedEx can deliver about 26.5 million pounds a day.
• If you were to store data on MicroSD cards then FedEx could transfer about 177 petabits per second – a thousand times more than the internet.
• Based on current growth rates of the internet, the internet’s bandwidth will surpass that of FedEx by 2040.
• However that assumes that we won’t invent an even lighter form of storage than the MicroSD card. When we do FexEx could ship that instead to get even higher throughput rates.
• In fact, because transfer and storage are so deeply linked it is unlikely that transfer over the internet will ever beat the physical shipping of data.

Read Munroe’s entire fascinating and humorous explanation over here.

Source: What If?

In-N-Out Burger, a popular chain of restaurants in the west coast of the United States is an extremely secretive private company. Seth Lubove pieced together information from a variety of sources to paint a fuller picture of the chain:

• While the company is private, based on what little information is available, the chain is valued anywhere between $1.1 and $2 billion.
• The company is wholly owned by the granddaughter of the chain’s founders. She has no college degree yet is thought to be the youngest female American billionaire.
• The company refuses to franchise in an apparent bid to maintain quality control.
• The chain uses fresh beef patties that are delivered to the stores every day from two distribution facilities. The chain only opens in locations that are within a day’s driving distance from the distribution facilities.
• The estimated 20% margin that In-N-Out Burger manages to maintain is in part due to the simplicity of its limited menu.

Read more about the minor family feud that took place in the past, comments from In-N-Out Burger, and what the youngest female billionaire likes to do with her free time over here.

Source: Bloomberg

If you’re anything like us you spent a good part of the week making your way through Netflix’s latest House of Cards. Rebecca Greenfield looked at the economics of the show:

• The show costs Netflix about $50 million a season to produce.
• Netflix intends to have five new shows of a similar scale every year.
• Yet most of its revenue comes from people paying $7.99 a month for a streaming subscription. It doesn’t use ads to top up that revenue.
• If Netflix wants to recoup the costs of producing the shows then the shows need to attract 2.6 million new individuals who subscribe for two years.
• Yet for Netflix this would be an increase of less than 10%. Last year Netflix increased its US membership by about 13%.

Read more about the dynamics of Netflix’s big bet over here.

Source: The Atlantic

Earlier this week the company Research in Motion announced that it was changing its name to Blackberry as it struggles in a marketplace ruled by Android, iOS, and Windows Phone. Brian Palmer explored the history of corporate name changes:

• Studies suggest that corporate name changes usually either have no effect on the subsequent success of the company or a mildly negative effect.
• The few companies that do succeed usually do it because they started off as a small businesses with a local name, and are now so successful they need a global brand. Hence a company called Tsushin Kogyo changed its name to Sony to find success around the world.
• Businesses whose stock prices fell prior to a name change usually see the price continue to fall for the next three years.
• Moreover the former Research in Motion has now linked its reputation to just one product: Blackberry. If the product fails then the whole company will be associated with failure.

Read more about the types of name changes that are successful, companies that have bucked the trend, and why the Blackberry name is already off to a bad start over here.

Source: Slate

The team that wins the Super Bowl tonight will be able to call itself the world champion of American Football. Yet this title is only slightly less misleading than the title of Miss Universe – a competition which we only invite our own solar system to – since no other country really plays American Football. Joshua E. Keating looked at why this was:

• It can’t be because the sport is American. Baseball is American and that has a global fan base. Nor can it be because of how rough it is. Rugby is rougher.
• The biggest reason why other countries don’t play American football is because of cost. With basketball you just need a ball and a hoop. Baseball requires a ball and a bat. American football requires all of the gear and equipment for all the players.
• People might also be put off by the complexity of the rules.
• Efforts to promote American Football across the oceans have mostly failed. This is because players who do well go to the United States, robbing the fan base of other countries of their favourite star – the very same fan base that could make the game popular.

Read more about the various efforts to export American Football over here.

Source: Foreign Policy