Posted on May 25, 2016 by Jeff Reifman

Update on Amazon’s Impact on a Ballard Street

My post last May about Amazon’s impact on a Ballard neighborhood street proved quite popular, especially on Slashdot’s: Visual Walk Through Amazon’s Impact On One Seattle Neighborhood. You may remember there were two houses sold as lots:

ballard neighborhood development

Two Ballard Houses Sold as Lots

Here’s what those lots look like now, a third house beside the lot will be torn down shortly:

ballard seattle development

A View of Ballard Neighborhood Development

ballard seattle development

Another View of Ballard Neighborhood Development

You can see originals of all the photos on Flickr.

Word is that the townhomes pictured in the earlier story are experiencing numerous defects from the fast-paced construction including leaky roofs.

 

Digital Ocean Referral Program
Posted on May 19, 2016 by Jeff Reifman

My Digital Ocean Affiliate Program Experience

People ask me all the time if it’s possible to earn money by blogging. Well, it’s difficult. However, using carefully selected affiliate programs can be helpful. I’ve actually done quite well with two of my favorite services that I use regularly: the Digital Ocean affiliate program and WPEngine. Digital Ocean is a cloud-based hosting startup that’s one of the fastest growing and emerging as a major player. While, WPEngine is, in my opinion, the best managed hosting service for WordPress; I run Flee the Jungle with it.

Today, I want to share my historical experience with the Digital Ocean referral program. First, let me tell you a bit about the quality of Digital Ocean as a hosting company.

I run all of my self-host WordPress sites with Digital Ocean (like this one) and WPNow, my guide to WordPress management. The service continues improving and I can’t remember any slowdowns or downtime in recent memory. It’s solid. Support too has improved consistently. I am a satisfied customer. I’ve also written about them for Envato Tuts+, check out some of my Digital Ocean tutorials there. It’s nice promoting a company on my site that I believe in.

Furthermore, the Digital Ocean affiliate program has proven financially beneficial. When you refer someone, they earn $10 in credits and once they spend a total of $35 in hosting, you earn $25. This year, I’ve earned an average of $465 monthly. In nearly two years, I’ve earned $6,975 to date.

digital ocean affiliate statistics

Digital Ocean Referral Statistics

 

The most I’ve ever earned was $775 in January and then $650 last month. Digital Ocean sends a PayPal transfer at the beginning of the month for the prior month’s revenue.

I used to keep more careful track of ongoing signups but the chart above and the chart below show the approximate growth of signups and income from the referral program. For recent months, I’ve estimated the monthly sign up rate.

digital ocean affiliate and referral income

Digital Ocean Affiliate Program Income

Last spring there was a short term spike in the rate of click throughs and sign ups. We could never determine where it was coming from and it eventually faded. The best information Digital Ocean gave me is that a popular Google search item may have redirected to my affiliate link.

As you can see in the above statistics table, if all of my referred members eventually reached $35 in spending, I’d earn $52,320. It would be nice if Digital Ocean shared more transparently the age and state of these accounts — which are active and their current progress towards completion.

You can sign up for an account at Digital Ocean here!

Please let me know about your experience below in the comments below.

Note: Sometime in 2014, Digital Ocean switched from cash awards to service credits for new referral program members. However, if you have an existing account, you may have been grandfathered into the cash awards program.

microsoft cumulative revenue
Posted on May 8, 2016 by Jeff Reifman

Microsoft Revenue Quietly Surpasses $1 Trillion

As I was researching Microsoft’s Washington State tax breaks, I realized that the company’s cumulative revenues surpassed $1 trillion this past quarter. You might expect a company to announce a milestone like this and bask in this incredible accomplishment — but not Microsoft. It chose to stay silent as it faces increased public scrutiny for holding $108.3 billion in earnings offshore (an incredible 41% of its all time profit) and its history of tax dodging at home in Washington State.

As Seattle Times columnist Danny Westneat expressed shock that Boeing’s tax breaks saved it $304 million last year, I noted that the legislature’s actions here are saving Microsoft approximately $776 million in 2016 (I’ve been reporting on Microsoft’s Nevada-based tax dodge since 2004.)

According to my data, Apple surpassed $1 trillion in revenue 2015 but selling pricier hardware has given it a historical advantage. Still, Apple’s cumulatively earned only $261.6 billion in profit to Microsoft’s $265.2 billion. Google’s earned $96.3 billion cumulatively.

microsoft cumulative earnings

Cumulative Earnings of MSFT, AAPL, GOOG, AMZN

Amazon, Washington State’s other star, has more than a half trillion in revenue, $545 billion but noticeably only $3.31 billion in profit. From the strictest capitalist standpoint, all its efforts and success have yielded little for shareholders. It’s been kind of a net failure.

Washington State: Libertarian Promised Land

In summary, Washington State’s become a kind of libertarian promised land. Combined, Microsoft and Amazon, its babies, have earned more than $1.5 trillion in revenues and helped create more than 161,220 millionaires but the wealthy here pay the lowest share of taxes in the entire country. As a result, we:

Nicely done Bill and Jeff.

Update: Thank you for the widespread coverage of this story: Slashdot, CNet, Yahoo! Finance, Business Insider, Time, et al. Aside from the alternative Stranger, other Seattle news organizations remain silent: no mention from The Seattle Times, The Seattle Post-Intelligencer, The Seattle Weekly, Crosscut, KUOW, etc.

microsoft boeing tax break
Posted on May 5, 2016 by Jeff Reifman

Forget Boeing, Microsoft’s Tax Break Costs $776 Million

On Tuesday, The Seattle Times’ columnist Danny Westneat expressed shock that Boeing’s tax breaks cost the state $304 million last year. He failed to mention that the legislature’s actions in 2010 allowed Microsoft to save $776 million in taxes this year. And, he probably didn’t mention it because he didn’t know its scope — The Times has left everyone in our community in the dark, having chosen not to report the financial legacy of Microsoft’s twenty year Nevada tax dodge.

Microsoft began its Nevada-based tax dodge back in 1997, ironically as it completed lobbying to reduce the state’s royalty tax rate by two thirds. But last year, the legislature restored the original royalty tax rate to 1.5 percent pushing Microsoft’s effective tax savings for 2016 to approximately $776 million. Cumulatively, Microsoft’s saved $3.39 billion (including interest.) However, if not for the legislature’s 18 year cut to the royalty tax rate, Microsoft ultimately saved $8.6 billion.

At this point, Microsoft’s activities aren’t even illegal. Back in 2010, then Rep. Ross Hunter, a 17 year ex-Microsoft executive, led a redefinition of the state’s royalty tax which covered Microsoft’s global licensing revenue. Hunter’s change shrunk the tax from one on worldwide sales purely to sales to Washington state customers. He promised colleagues the change would generate $20.4 million more annually for the state by 2013 which never materialized. It was a huge tax break for Microsoft. And, just to be safe, Hunter added language to provide amnesty for the company’s past violations.

That fall, I briefed The Seattle Times’ former Editor in Chief, David Boardman, and five other journalists on the story for about two hours. Boardman said he was committed to raising coverage of the issue. The coverage never came but Boardman left Brad Smith, the executive at Microsoft overseeing its Nevada tax operations, one of the paper’s esteemed luminaries. Here’s audio of Smith acknowledging Microsoft’s Nevada tax dodge to me in a 2004 interview:

Meanwhile, sometime in the past five years, Microsoft’s cumulative revenues quietly surpassed $1 trillion. I discovered this as I updated the estimates for the company’s history of tax dodging in Nevada (see footnote 1).

What Could Microsoft’s Tax Savings Have Paid For

Microsoft founder Bill Gates has been an outspoken advocate for education and the less fortunate among us. With Microsoft’s cumulative state tax savings, Washington state could have funded the entire McCleary education settlement for five years, Gates’ own initiative for forty state charter schools and restored almost all of the $961 million cut from the University of Washington’s annual budgets since 2009.

With just a small portion of its tax savings from this year, we could easily double Seattle’s city budget for emergency efforts to address the sharp rises in homelessness, heroin addiction and crime.

Or, the funds could cover 17 percent of the $50 billion cost for Seattle’s 25 year public transit initiative, ST3, saving taxpayers significantly.

Westneat mentions, “our booming aerospace and high-tech sectors combined paid just 3 percent of all state business taxes…the result…of decades of special deals won by lobbyists in Olympia…” and Washington state is the third highest ranked state in the country for tax subsidies. At a federal level, Microsoft holds more than $108 billion offshore, avoiding $35 billion in additional corporate taxes.

So far, there’s no one in Olympia that wants to step up to put an end to Hunter’s duplicitous legacy and Microsoft’s egregious actions that serve only its shareholders.


1. Microsoft stopped reporting its share of revenues from royalties in 2003. Since then, I’ve estimated its licensing revenue. Firstly, in September 2010, Microsoft Nevada ran a job listing on its site “Are you interested in leading the vision and strategy of an organization which processes in excess of $30B annually?” The ad implied that half of the company’s revenue came from licensing. And, more recently, this post reports Microsoft’s 2015 licensing revenue at 59.8 percent of all revenue.

Posted on April 29, 2016 by Jeff Reifman

My Experience with Domain Investing

Domain investing has been a profitable side project for me. It began back in 2007 when I sold a .org domain for nearly a year’s salary. It was an eye-opening experience and inspired me to invest further. Since then, I’ve grossed $35,126 in sales; this year has begun surprisingly well, as I’ve sold two domains for more than $5,000 already. But of course, annual registration renewals reduce the net profit moderately.

I thought I’d openly share historical sales from my domains (aside from the initial .org sale which has a confidentiality agreement associated with it) so you can see the types of returns domain investing can create. I created a for sale landing page for my domains which links to a full inventory listing. You can see it here at PopCloud.com. And, I wrote a how to park, list and sell domains tutorial earlier. But, certainly I’m not the best example. I’d encourage you to browse elsewhere on the web as well for other stories and expertise.

Here’s a history of sales for me since 2008:

You can acquire domains for $10 – $30 if they’re not yet registered, and back then, there was still availability in the market. Over time, my inventory of domains grew to 100. These days, it seems like almost no .com’s are available anymore. The expansion of the domain extension industry with generic top level domains (gTLDs) has opened up new opportunities in some areas without slowing the .com domain inventory very much.

Honestly, as my life has progressed, I’ve stopped buying many new domains and I’m actually trying to gradually liquidate my domain inventory. I’ve dropped renewals on a number of less valuable domains and selling at lower prices occasionally, when opportunities arise. Some of my more valuable domains, like popcloud.com and newscloud.com, I’ll hold for a long time to get the best price.

My most valuable domains aside from the .org sale have been WhistlerPlaces.com, MsGreen.com, MedNotes.com, CustomLife.com, WarmGun.com, Reorder.us and Snowboard.io. I’ve turned down an offer of $16,000 for popcloud.com which would have been my second most valuable sale.

I’ve definitely had the most return from that .org and generally .com domains but .io domains have proven profitable, and I think they are cool! E.g. I think marriage.io (currently for auction at Flippa), cycling.io and gardening.io may turn out to be highly valuable for me.

Here’s a summary of my domain sales to date. It’s turned out to be a nice background investing project that takes only a small to modest amount of time.

2008
mednotes.com: $5,400

2010
warmgun.com: $1,750
reorder.us: $1,350
totaloasis.com: $750

2012
whistlerplaces.com: $7,500

2013
churchbase.com: $250

2014
Snowboard.io: $1,000
Therapy.io: $500
SonicPlanet.com: $499
ZenEye.com: $339
UnitedKids.com: $299
Lead1.com: $275
ActiveChristian.com: $250
Newscloud.net: $239
bitsurf.com: $199
fwb.io: $199
identitycircle.com: $190
surplusretail.com: $190
RadioDna.com: $69

2015
CommonRoad.com: $749
MainStory.com: $719
Acupuncture.io: $479
MaryJane.io: $299
herbs.io: $175
Cloudmail.io: $158

2016
msgreen.com: $6,549
customlife.com: $5,000

Often, people reach me directly via my domain landing pages. But, I’ve also sold domains via Afternic, SEDO and Flippa.

By the way, the most I’ve ever spent on a domain name myself is $1,800 for Geogram.com which I was using for a startup at the time.

I hope you’ve found this useful and intriguing. If you decide to begin domain investing, start slow and best wishes to you!

AmazonFresh Truck Crash
Posted on April 27, 2016 by Jeff Reifman

AmazonFresh Out of Washington State License Plates

amazon fresh california plates

AmazonFresh Delivery Truck with California Plates in Seattle’s FirstHill Neighborhood

When this AmazonFresh truck crashed into a Seattle building in January, one thing that was not a problem was its California state license plates.

Certainly, corporations like Amazon are people but if you’re actually a person and don’t register your personal vehicle within 30 days of moving to Washington State, you face up to a year in jail and more than $1,500 in fines. No such problem for corporate people.

As Seattle residents gear up to vote on a 25 year, $50 billion transportation package to address traffic problems largely driven by Amazon’s recent growth, they may be asking whether it’s fair that they be asked to pay $400 (or as much as $1,000 dollars annually) in indefinite sales, property and vehicle tax increases without commensurate participation by local corporations.

I actually first began to notice the plethora of AmazonFresh delivery trucks with California plates last fall. The company has a history of aggressive tax avoidance and I wondered if this was just one more aspect of this.

Sidenote: only two days left on the StarWars.io domain auction

AmazonFresh California Out of State Plates

AmazonFresh Trucks in Seattle with California License Plates

It turned out to be quite difficult and time consuming to find out whether Amazon is breaking the law. As commonplace, Amazon’s media relations team ignored my request for a simple explanation — another way it neglects its civic role in Seattle.

The state’s Department of Licensing didn’t know and referred me to the Department of Transportation which also didn’t know. They referred me to the state’s Department of Utilities and Transportation which oversees commercial transportation. They didn’t know either and referred me to the Washington State Patrol, who also didn’t know.

I’m told the plates on U-Haul trucks are often out of state because they are part of federal programs for interstate commerce, but AmazonFresh trucks perform local grocery deliveries. Every local FedEx and UPS truck I’ve seen here has in state registrations as did this Safeway home delivery truck. But all the AmazonFresh neighborhood delivery trucks I’ve seen use California plates.

California does offer what it calls an International Registration Program (IRP) which allows interstate trucks to register with them and it shares the proceeds with other states.

California’s Department of Motor Vehicles eventually released documents to me showing that the four AmazonFresh license plates I had at the time were actually Ryder rental trucks, but it replied, “While it’s possible there’s an Amazon IRP fleet, we are not aware of one and these plates are not in one. In IRP, there are limited circumstances where a vehicle that operates in one jurisdiction is allowed to operate as part of an IRP fleet, but that’s not apparently relevant to this…”

Ryder may own these trucks, but they are clearly branded for long term AmazonFresh use and spend the majority, if not all of their time in Washington State. Local home delivery trucks wouldn’t qualify for IRP.

I made a number of calls and e-mail requests to Ryder’s media relations team. They also chose not to respond.

Ultimately, Trooper Chris Webb of the Washington State Patrol looked into the issue and responded, “…the only answer that I can give you is that the trucks are leased from Ryder. Since the business is run through Amazon, they are still responsible for any fees, taxes and other payments to run the business. Ryder is only responsible for the ownership of the vehicle. There are many variables connected to leases and rentals. Since a corporation owns the lease, the trucks are able to use out-of-state plates because the vehicle may end-up in another state as part of the rental or lease agreement.” He later added that the party responsible for registering the vehicle is determined between Ryder and Amazon in their lease agreement.

Last week, I asked the Department of Licensing again why Amazon’s not at least required to register with California’s IRP. They replied, “If you want to talk to someone about enforcement of commercial vehicle licensing, you can contact the Washington State Patrol.” When I asked Trooper Webb why, he replied, “That would fall under the department of licensing. The [state patrol] is only a law enforcement agency and would not have the authority to force businesses to register.”

So, if you’re a corporate person, and not a real one, go ahead and use whatever plates you wish. Having a variety of out of state plates on our highways might restore some of the local diversity we’ve lost with Amazon’s largely white male workforce. Just don’t do this if you’re an actual person, then you might go to jail.

Perhaps Amazon could use some of the money from AmazonFresh’s new $299 annual fee to register its vehicles in our state as its customers are required to.

Honestly, I don’t really care much about vehicle registration or licensing infractions. It’s not really a huge deal in itself for the state or a company the scale of Amazon. But, it’s representative of Amazon’s philosophy towards Seattle and its own employees. Get as much as we can, spend as little as we can — and don’t worry about the impact e.g. massive traffic without any funding for solutions.

(If you’re interested in checking out alternatives to Amazon, I’ve helped set up Flee the Jungle as a categorized directory to other online providers.)

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