Wildcard Wednesday . . .

THE PROBLEM OF ZERO RATED DATA:  Over the past month I’ve mentioned the prospect of the FCC’s current Net Neutrality regulations being modified or reversed under the Trump Administration.  There’s also another twist to this industry issue from something called “zero rated data”.  Several Telcos and Cable providers currently offer delivery of some streaming products without counting it against user’s data.  Think of T-Mobile’s unlimited/free streaming of music services like Pandora as an example.  Right now zero rated content doesn’t fall under the NN regulation, which makes it a loophole.  NN proponents would love to see zero rated delivery go away on the grounds that it creates the type of prioritized access the regulation is supposed to curtail.    On the other hand, if more and more service providers go zero rated it may completely gut NN, even without a formal rule change.  We’ll keep watching this one.  (link)

WALMART GETS ITS DIGITAL ON:  Next up are a pair of articles showcasing Walmart’s progress on the digital front.  First is are Q4 earnings which were reported yesterday.  Overall revenue thumped Wall Street’s expectation on the strength of +29% growth in their online sales.  This increase was driven by last year’s purchase of Jet.com, a major ecommerce site.  The marriage of Walmart and Jet is another positive example of what can happen if you combine the best of B&M and online commerce.  The second article is a glimpse into Walmart’s store of the future.  Like Amazon, Walmart is in the lab trying to perfect the retail experience of tomorrow.  Walmart’s version involves a “check-n-go” concept where customers scan-gun purchases as they put them into bags in their carts – thus eliminating the need for a checkout line.  Will these innovations be enough for Walmart to compete with Amazon for the future of E-tail?  Only time will tell. (link1) (link2)

A NOT SO SNAPPY REACTION TO A PROPOSED IPO:  Snap is making the rounds with investors on its pre-IPO tour.  First up was the UK where London’s financial set got their chance to hear from Snap in person.  The initial reviews have been mixed, with the word “neutral” ruling the day.  Meaning investors don’t see much upside (or downside) on a $14-16 share price and a $20B market cap.  There’s also a broader worry about Snapchat’s decelerating user growth in the back half of 2016, copycat competition from juggernauts Facebook and YouTube who can easily replicate Snapchat’s “story” format, and an over reliance on the here today/gone tomorrow Teen-Young Adult segment – an astounding 70% of US Snapchat users are between 18-24 yo!  All of this creates a proposition for investors where they’re asked to invest near the top of everyone’s valuation model for a nubile product which has yet to prove it can graduate into adulthood. (link)

Have a great Wednesday guys!

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