Filed under: Industry, Housing

During summer and winter breaks from college, I used to work in a Williams-Sonoma, Inc (NYSE: WSM) store in my local mall. As a moderately eloquent speaker and the only guy in the joint, I managed to make quite a few sales, particularly among the key “25-40 year old, vaguely unsatisfied married female” demographic that made up most of the store’s customers. One day, as my father waited for me to get off work, he watched me talk a wealthy, sour-faced housewife into buying a $49 grape drainer. Shaking his head at my salesmanship, he wondered aloud how I could convince someone to shell out a pocketful of cash for what was essentially a porcelain bowl with holes in the bottom. I couldn’t really answer him and, to this day, I wonder how Williams-Sonoma manages to market its wares, many of which are amazingly useless.

In the fourth quarter of 2007, Williams-Sonoma’s profit rose almost 3%, but its first-quarter same-store 2008 profits are expected to fall by between 6% and 8.5%. The store is blaming its flagging sales on the real-estate slump. While it seems reasonable to anticipate that people would be disinclined to buy home goods when they’re having a hard time covering their mortgage payments, Williams-Sonoma is missing the massive picture. In addition to its position as a major player in the home decor market, W-S is also a luxury brand store and a narrow-focus mall retailer. Both of these types of stores are facing serious problems in the current economy, one for its inflated prices and the other for its lack of diversity. Consumers looking for kitchen implements are probably inclined to go to Lechters, which is a lot cheaper, or Wal-Mart and Target, both of which have a much wider selection of merchandise. If Williams-Sonoma wants to weather this storm, it should probably follow the lead of its Pottery Barn subsidiary and begin slicing its prices. In the current economy, it’s hard to envision someone shelling out $49 for a grape drainer!

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Filed under: Politics, Presidential elections, Housing

At a speech in Manhattan yesterday, Senator Barack Obama blamed lax oversight and deregulation for the housing sector’s woes, saying that “Under Republican and Democratic administrations, we failed to guard against practices that all too often rewarded financial manipulation instead of productivity and sound business practices. The result has been a distorted market that creates bubbles instead of steady sustainable growth, a market that favors Wall Street over Main Street but ends up hurting both.”

He’s right about that — but his solution is to pump $30 billion into the system, in part to help bailout homeowners who were the beneficiary of overly aggressive mortgage lending.

His position makes no sense: If people were able to purchase homes because of a distorted market caused by lax oversight, doesn’t pumping in money to help them keep “their” homes just prolong the problem?

He also lashed out at Senator John McCain’s reasonable, consistent argument that we shouldn’t be bailing out any of these people. Free markets got us into this mess, and free markets should get us out. Obama stated that “While this is consistent with Mr. McCain’s determination to run for George Bush’s third term,m it won’t help families who are suffering.”

Here’s the problem: these families that are suffering with making mortgage payments were the beneficiary of lax lending practices and poor oversight! By bashing the industry/regulators but insisting that people should be given help in keeping their homes, Obama is trying to have it both ways.

But in an election year, that might be the best way to approach it. The Republicans are trying to have it both ways too, supporting plans to help financial institutions avoid paying the piper for years of bad decisions.

The Democrats want to help out homeowners and the Republicans want to help out banks. The right thing to do is to help no one, and let them fix the mess they started themselves.

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Nature is reporting that a new distributed computing application is looking to monitor earthquake data using the accelerometer in many computing devices. In the long run, “Quake-Catcher” will hopefully be fast enough to give warning before major earthquakes. “If it works, it will be the cheapest seismic network on the planet and could operate in any country. It wouldn’t be as sensitive as traditional networks of seismometers, but Lawrence says that’s not the point. ‘If you’ve only two sensors in an area, you’ve to have a perfect system. If you’ve 15 sensors in a system it [can] be less perfect. One hundred, one thousand, ten thousand — your need for the system to be perfect becomes much smaller,’ he says. ‘That’s really our approach — just to have large numbers.’”

Read more of this story at Slashdot.

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BoringNitride writes “Nanotech tool vendors hawked their wares to innovative engineers at the spring meeting of the Materials Research Society this week at San Francisco’s Moscone Center. Wired took a break from presentations on molecular motors and the mechanical properties of human skin to take a walk across the showroom floor. They captured close-ups of some of the most precise molecule-building and measurement tools in the world.”

Read more of this story at Slashdot.

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NewScientist is reporting that while the strength of the tether has long been considered the main problem in building a space elevator, a new study recommends that a hazardous wobbling problem may also be a serious obstacle. “Previous studies have noted that gravitational tugs from the Moon and Sun, as well as pressure from gusts of solar wind, would shake the tether. That could potentially make it veer into space traffic, including satellites and bits of space debris. A collision could cut the tether and wreck the space elevator.”

Read more of this story at Slashdot.

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Wow. More politicians (of all parties) need to be as open and thorough as Steve Novick is here. We selected 10 of the questions you submitted and sent them to him by email, and his responses… let’s just say that if each candidate spoke out like Steve, we’d have a much clearer view of our choices and would be able to cast our votes a lot more rationally.

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eWeekPete writes “Is the pipe half full or half empty? Not surprisingly, the talk at the second annual Tech Policy Summit was decidedly mixed. ‘The US is still the most dynamic broadband economy in the world,’ said Ambassador Richard Russell, the associate director of the White House’s Office on Science and Technology Policy. ‘As opposed to being miles ahead, though, we’re only a tiny ahead.’ But Yale Law School’s Susan Crawford called Russell’s position ‘magical thinking. We’re not doing well at all.’ She proceeded to call the White House’s effort ‘completely inadequate on broadband competition.’”

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Filed under: Products and services, Google (GOOG)

Was YouTube really worth $1.65 billion to Google, Inc. (NASDAQ: GOOG) when the world’s largest search company purchased it a few years ago? By today’s standards, that now seems like a bargain. Think about Yahoo! Inc.’s (NASDAQ: YHOO) impending buy by Microsoft Corp. (NASDAQ: MSFT) and Microsoft’s “small” stake in Facebook that values the social networking site at $15 billion.

YouTube is probably one of the most-used sites I see from friends and family these days. Hours upon hours can be wasted navigating through all the content there, and now that YouTube has launched its YouTube Insight tracking tool, the equivalent of viewership tracking is now available to those who upload videos to the site.

Envision being able to see details like when, where and how often your videos are being viewed. Previously only available to advertisers at YouTube, all YouTube video uploaders can now see this kind of information. To those who think web surfing time may be eating into television-viewing time, this should provide more detail on whether this is actually happening. Nielsen, eat your heart out.

Professionals and amateurs alike will now be able to test the popularity of different kinds of content at different parts of the days across different parts of each country to make the content as customized as possible. This is what Google is famous for — relevancy. No blanket ads here — the company wants its YouTube users to become more successful, which in turns makes it more successful. Rack up another content relevancy win for Google here.

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Filed under: Deals, Products and services, Consumer experience, Coca-Cola (KO), PepsiCo (PEP), Marketing and advertising

Just recently, I talked about a transaction involving PepsiCo (NYSE: PEP) and a foreign juice company. Now, it is Coca-Cola (NYSE: KO) and a foreign coffee venture that are making some noise.

As Melly Alazraki reported Thursday, Coca-Cola, Coca-Cola Hellenic Bottling and Illycafe SpA put together a joint venture to get some ready-to-drink coffees out on the global playing field. The venture, dubbed Ilko Coffee International, will start distribution of its products in April in ten countries. Coffee doesn’t interest me, but this venture does, since I own shares of Coke. Just like PepsiCo, Coke wants to do all it can to supplement its flagship carbonated soda brands with different beverage categories.

While I don’t like coffee, I know that it is a very popular drink around the world; in some respects, consumers are almost religious about coffee (and teas, as well). According to Bloomberg, the value of the ready-for-consumption coffee market is $16 billion, and it is focused in the Asian territory. This international scheme is therefore a great way for American shareholders to capitalize on a weak dollar. Many consumer companies these days are being helped out by currency valuations.

I can only imagine that this market will grow significantly over time, and that Coca-Cola would be smart to aggressively invest in it and leverage its world-class distribution system to grab as much share as it possibly can. Future growth in case-volume is going to be directly dependent on Coke and its capability to work with its bottlers to efficiently exploit opportunities such as these.

With its blue-chip marketing muscle, I have no doubt that Coke will be able to translate many of these kinds of deals, in conjunction with its already deep collection of beverage products, into quality cash flows and further increases in its annual dividend payout, which is the ultimate reason for being a shareholder.

Disclosure: I own shares of Coca-Cola; positions can change at any time.

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holy_calamity writes “Nuclear powered space probes like Pioneer have ‘nuclear batteries’ that (very inefficiently) convert heat from decaying isotopes into electricity. US researchers think a new material that converts radiation directly into power instead could make nuclear batteries 20 times more efficient. (Unfortunately they will likely not be user-replaceable.) The material consists of gold, carbon nanotubes, and lithium hydride.”

Read more of this story at Slashdot.

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