Wednesday, July 31, 2019

Frostbite Chapter 9

Nine I DIDN'T SEE DIMITRI FOR a while after that. He'd sent a message later that day saying that he thought we should cancel our next two sessions because of the rapidly approaching plans to leave campus. Classes were about to end anyway, he said; taking a break from practice seemed like the reasonable thing. It was a lame excuse, and I knew that wasn't the reason he was canceling. If he wanted to avoid me, I would have preferred he made up something about how he and the other guardians had to up Moroi security or practice top-secret ninja moves. Regardless of his story, I knew he was avoiding me because of the kiss. That damned kiss. I didn't regret it, not exactly. God only knew how much I'd been wanting to kiss him. But I'd done it for the wrong reasons. I'd done it because I was upset and frustrated and had simply wanted to prove that I could. I was so tired of doing the right thing, the smart thing. I was trying to be more in control lately, but I seemed to be slipping. I hadn't forgotten the warning that he'd once given me- that us being together wasn't just about age. It would interfere with our jobs. Pushing him into the kiss†¦well, I'd fanned the flames of a problem that could eventually hurt Lissa. I shouldn't have done it. Yesterday, I'd been unable to stop myself. Today I could see more clearly and couldn't believe what I'd done. Mason met me on Christmas morning, and we went to go hang out with the others. It provided a good opportunity to push Dimitri out of my head. I liked Mason- a lot. And it wasn't like I had to run off and marry him. Like Lissa had said, it would be healthy for me to just date someone again. Tasha was hosting our Christmas brunch in an elegant parlor in the Academy's guest quarters. Lots of group activities and parties were occurring throughout the school, but I'd quickly noticed that Tasha's presence always created a disturbance. People either secretly stared or went out of their way to avoid her. Sometimes she would challenge them. Sometimes she would just lie low. Today, she'd chosen to stay out of the other royals' way and simply enjoy this small, private party of those who didn't shun her. Dimitri had been invited to the gathering, and a bit of my resolve faltered when I saw him. He'd actually dressed up for the occasion. Okay, â€Å"dressed up† might have been an exaggeration, but it was the closest I'd ever seen him come to that. Usually he just looked a little rough†¦like he could spring into battle at any given moment. Today, his dark hair was tied at the back of his neck, as though he'd actually tried to make it neat. He wore his usual jeans and leather boots, but instead of a T-shirt or thermal shirt, he had on a finely knit black sweater. It was just an ordinary sweater, nothing designer or expensive, but it added a touch of polish I didn't usually see, and good God, did it fit him well. Dimitri wasn't mean to me or anything, but he certainly didn't go out of his way to make conversation with me. He did talk to Tasha, however, and I watched with fascination as they conversed in that easy way of theirs. I'd since learned that a good friend of his was a distant cousin of Tasha's family; that was how the two of them knew each other. â€Å"Five?† asked Dimitri in surprise. They were discussing the friend's children. â€Å"I hadn't heard that.† Tasha nodded. â€Å"It's insane. I swear, I don't think his wife's had more than six months off between kids. She's short, too- so she just gets wider and wider.† â€Å"When I first met him, he swore he didn't even want kids.† Her eyes widened excitedly. â€Å"I know! I can't believe it. You should see him now. He just melts around them. I can't even understand him half the time. I swear, he speaks more baby talk than English.† Dimitri smiled his rare smile. â€Å"Well†¦children do that to people.† â€Å"I can't imagine it happening to you,† she laughed. â€Å"You're always so stoic. Of course †¦ I suppose you'd be doing baby talk in Russian, so no one would ever know.† They both laughed at that, and I turned away, grateful Mason was there to talk to. He was a good distraction from everything, because in addition to Dimitri ignoring me, Lissa and Christian were chatting on in their own little world too. Sex appeared to have made them that much more in love, and I wondered if I'd get to spend any time with her at all on the ski trip. She did eventually break away from him to give me my Christmas present. I opened the box and stared inside. I saw a string of maroon-colored beads, and the scent of roses floated out. â€Å"What the †¦Ã¢â‚¬  I lifted the beads out, and a heavy gold crucifix swung from the end of them. She'd given me a chotki. It was similar to a rosary, only smaller. Bracelet-size. â€Å"Are you trying to convert me?† I asked wryly. Lissa wasn't a religious nut or anything, but she believed in God and attended church regularly. Like many Moroi families who'd come from Russia and Eastern Europe, she was an Orthodox Christian. Me? I was pretty much an Orthodox Agnostic. I figured God probably existed, but I didn't have the time or energy to investigate. Lissa respected that and never tried to push her faith on me, which made the gift that much weirder. â€Å"Flip it over,† she said, clearly amused at my shock. I did. On the back of the cross, a dragon wreathed in flowers had been carved into the gold. The Dragomir crest. I looked up at her, puzzled. â€Å"It's a family heirloom,† she said. â€Å"One of my dad's good friends has been saving boxes of his stuff. This was in it. It belonged to my great-grandmother's guardian.† â€Å"Liss †¦Ã¢â‚¬  I said. The chotki took on a whole new meaning. â€Å"I can't†¦ you can't give me something like this.† â€Å"Well, I certainly can't keep it. It's meant for a guardian. My guardian.† I wound the beads around one wrist. The cross felt cool against my skin. â€Å"You know,† I teased, â€Å"there's a good possibility I'll get kicked out of school before I can become your guardian.† She grinned. â€Å"Well, then you can give it back.† Everyone laughed. Tasha started to say something, then stopped when she looked up at the door. â€Å"Janine!† My mother stood there, looking as stiff and impassive as ever. â€Å"Sorry I'm late,† she said. â€Å"I had business to take care of.† Business. As always. Even on Christmas. I felt my stomach turn and heat rise to my cheeks as the details of our fight came rushing back to my mind. She'd never sent one word of communication since it had happened two days ago, not even when I was in the infirmary. No apologies. Nothing. I gritted my teeth. She sat down with us and soon joined in the conversation. I'd long since discovered she could really only talk about one subject: guardian business. I wondered if she had any hobbies. The Badica attack was on everyone's mind, and this drove her into a conversation about some similar fight she'd been in. To my horror, Mason was riveted by her every word. â€Å"Well, decapitations aren't as easy as they seem,† she said in her matter-of-fact way. I'd never thought they were easy at all, but her tone suggested that she believed everyone thought they were cake. â€Å"You've got to get through the spinal cord and tendons.† Through the bond, I felt Lissa grow queasy. She wasn't one for gruesome talk. Mason's eyes lit up. â€Å"What's the best weapon to do it with?† My mother considered. â€Å"An axe. You can get more weight behind it.† She made a swinging motion by way of illustration. â€Å"Cool,† he said. â€Å"Man, I hope they let me carry an axe.† It was a comical and ludicrous idea, since axes were hardly convenient weapons to carry around. For half a second, the thought of Mason walking down the street with an axe over his shoulder lightened my mood a little. The moment quickly passed. I honestly couldn't believe we were having this conversation on Christmas. Her presence had soured everything. Fortunately, the gathering eventually dispersed. Christian and Lissa went off to do their own thing, and Dimitri and Tasha apparently had more catching up to do. Mason and I were well on our way to the dhampir dorm when my mother joined us. None of us said anything. Stars cluttered the black sky, sharp and bright, their glitter matched in the ice and snow around us. I wore my ivory parka with fake fur trimming. It did a good job keeping my body warm, even though it did nothing against the chilly gusts that seared my face. The whole time we walked, I kept expecting my mother to turn off toward the other guardian areas, but she came right inside the dorm with us. â€Å"I've been wanting to talk to you,† she finally said. My alarms clicked on. What had I done now? That was all she said, but Mason picked up on the hint immediately. He was neither stupid nor oblivious to social cues, though at that moment, I kind of wished he was. I also found it ironic that he wanted to fight every Strigoi in the world but was afraid of my mother. He glanced at me apologetically, shrugged, and said, â€Å"Hey, I've got to get, um, somewhere. I'll see you later.† I watched with regret as he left, wishing I could run after him. Probably my mom would only tackle me and punch my other eye if I tried to escape. Better to do things her way and get this over with. Shifting uncomfortably, I looked everywhere but at her and waited for her to speak. Out of the corner of my eye, I noticed a few people glancing over at us. Recalling how everyone in the world seemed to know about her giving me the black eye, I suddenly decided I didn't want witnesses around for whatever lecture she was about to unleash on me. â€Å"You want to, um, go to my room?† I asked. She looked surprised, almost uncertain. â€Å"Sure.† I led her upstairs, keeping a safe distance away as we walked. Awkward tension built between us. She didn't say anything when we reached my room, but I saw her examine every detail carefully, as though a Strigoi might be lurking in there. I sat on the bed and waited while she paced, unsure what I should do. She ran her fingers over a stack of books on animal behavior and evolution. â€Å"Are these for a report?† she asked. â€Å"No. I'm just interested in it, that's all.† Her eyebrows rose. She hadn't known that. But how would she? She didn't know anything about me. She continued her appraisal, stopping to study little things that apparently surprised her about me. A picture of Lissa and me dressed up like fairies for Halloween. A bag of SweeTarts. It was as though my mother were meeting me for the first time. Abruptly, she turned and extended her hand toward me. â€Å"Here.† Startled, I leaned forward and held my palm out underneath hers. Something small and cool dropped into my hand. It was a round pendant, a small one- not much bigger than a dime in diameter. A base of silver held a flat disc of colored glass circles. Frowning, I ran my thumb over its surface. It was strange, but the circles almost made it look like an eye. The inner one was small, just like a pupil. It was so dark blue that it looked black. Surrounding it was a larger circle of pale blue, which was in turn surrounded by a circle of white. A very, very thin ring of that dark blue color circled the outside. â€Å"Thanks,† I said. I hadn't expected anything from her. The gift was weird- why the hell would she give me an eye?- but it was a gift. â€Å"I†¦ I didn't get you anything.† My mom nodded, face blank and unconcerned once more. â€Å"It's fine. I don't need anything.† She turned away again and started walking around the room. She didn't have a lot of space to do it, but her shorter height gave her a smaller stride. Each time she passed in front of the window over my bed, the light would catch her auburn hair and light it up. I watched her curiously and realized she was as nervous as me. She halted in her pacing and glanced back toward me. â€Å"How's your eye?† â€Å"Getting better.† â€Å"Good.† She opened her mouth, and I had a feeling she was on the verge of apologizing. But she didn't. When she started pacing again, I decided I couldn't stand the inactivity. I began putting my presents away. I'd gotten a pretty nice haul of stuff this morning. One of them was a silk dress from Tasha, red and embroidered with flowers. My mother watched me hang it in the room's tiny closet. â€Å"That was very nice of Tasha.† â€Å"Yeah,† I agreed. â€Å"I didn't know she was going to get me anything. I really like her.† â€Å"Me too.† I turned from the closet in surprise and stared at my mom. Her astonishment mirrored mine. If I hadn't known any better, I'd have said we'd just agreed on something. Maybe Christmas miracles did happen. â€Å"Guardian Belikov will be a good match for her.† â€Å"I- † I blinked, not entirely sure what she was talking about. â€Å"Dimitri?† â€Å"Guardian Belikov,† she corrected sternly, still not approving of my casual way of addressing him. â€Å"What†¦ what kind of match?† I asked. She raised an eyebrow. â€Å"You haven't heard? She's asked him to be her guardian- since she doesn't have one.† I felt like I'd been punched again. â€Å"But he's†¦assigned here. And to Lissa.† â€Å"Arrangements can be made. And regardless of the Ozera reputation†¦she's still royal. If she pushes, she can get her way.† I stared bleakly into space. â€Å"Well, I guess they are friends and everything.† â€Å"More than that- or possibly could be.† Bam! Punched again. â€Å"What?† â€Å"Hmm? Oh. She's†¦interested in him.† By my mother's tone, it was clear that romantic matters actually held no interest for her. â€Å"She's willing to have dhampir children, so it's possible they might eventually make an, um, arrangement if he were her guardian.† Oh. My. God. Time froze. My heart stopped beating. I realized my mother was waiting for a response. She was leaning against my desk, watching me. She might be able to hunt down Strigoi, but she was oblivious to my feelings. â€Å"Is †¦ is he going to do it? Be her guardian?† I asked weakly. My mom shrugged. â€Å"I don't think he's agreed to it yet, but of course he will. It's a great opportunity.† â€Å"Of course,† I echoed. Why would Dimitri turn down the chance to be a guardian to a friend of his and to have a baby? I think my mom said something else after that, but I didn't hear it. I didn't hear anything. I kept thinking about Dimitri leaving the Academy, leaving me. I thought about the way he and Tasha had gotten along with each other so well. And then, after those recollections, my imagination started improvising future scenarios. Tasha and Dimitri together. Touching. Kissing. Naked. Other things †¦ I squeezed my eyes shut for half a second and then opened them. â€Å"I'm really tired.† My mom stopped mid-sentence. I had no idea what she'd been saying before I interrupted her. â€Å"I'm really tired,† I repeated. I could hear the hollowness in my own voice. Empty. No emotion. â€Å"Thanks for the eye†¦um, thing, but if you don't mind †¦Ã¢â‚¬  My mother stared at me in surprise, her features open and confused. Then, just like that, her usual wall of cool professionalism slammed back into place. Until that moment, I hadn't realized how much she'd let it up. But she had. For just a brief time, she'd made herself vulnerable with me. That vulnerability was now gone. â€Å"Of course,† she said stiffly. â€Å"I don't want to bother you.† I wanted to tell her it wasn't that. I wanted to tell her I wasn't kicking her out for any personal reason. And I wanted to tell her that I wished she were the kind of loving, understanding mother you always hear about, one I could confide in. Maybe even a mother I could discuss my troubled love life with. God. I wished I could tell anyone about that, actually. Especially right now. But I was too caught up in my own personal drama to say a word. I felt like someone had ripped my heart out and tossed it across the other side of the room. There was a burning, agonizing pain in my chest, and I had no idea how it could ever be filled. It was one thing to accept that I couldn't have Dimitri. It was something entirely different to realize someone else could. I didn't say anything else to her because my speech capabilities no longer existed. Fury glinted in her eyes, and her lips flattened out into that tight expression of displeasure she so often wore. Without another word, she turned around and left, slamming the door behind her. That door slam was something I would have done too, actually. I guess we really did share some genes. But I forgot about her almost immediately. I just kept sitting there and thinking. Thinking and imagining. I spent the rest of the day doing little more than that. I skipped dinner. I shed a few tears. But mostly, I just sat on my bed thinking and growing more and more depressed. I also discovered that the only thing worse than imagining Dimitri and Tasha together was remembering when he and I had been together. He would never touch me again like that, never kiss me again†¦ This was the worst Christmas ever.

Credit Card and Paypal

In this report, we focus on all aspects of the PayPal business. PayPal Basics PayPal is quickly establishing itself as a global payment processor with scale, facilitating nearly $60B in Total Payment Volume in 2008. It remains the largest player focused solely on online payments; however when compared to the total volume of large global players, such as Visa and MasterCard, PayPal’s volume remains fairly small: its $60B TPV was just over 1% of the total volume of payments processed last year by Visa and MasterCard combined. Figure 1: PayPal’s Volume Dwarfed by Incumbents in billions 2,000 1,500 1,757 1,548 969 1,000 500 0 Visa (Credit) Visa (Debit) MasterCard (Credit) Source: Company reports, J. P. Morgan estimates. Note: Parts of PayPal volume may be processed using Visa or MasterCard’s network; Visa volume excludes Visa Europe 406 60 MasterCard (Debit) Pay Pal PayPal is an Established Payment Network and Brand – A Rare Commodity PayPal is in rare company , successfully creating itself into a formidable payment network and brand alongside dominant payment brands in Visa, MasterCard, American Express and Discover.Payment networks sit at the top of the value chain in payments, collecting high-margin fees for facilitating payments from participants seeking access to a network of trusted merchants and consumers. PayPal overcame the classic chicken-and-egg dilemma and now has a critical mass of users in its network, differentiated as a trusted brand for facilitating online payments with the potential to extend its presence into offline opportunities longer-term.One driver of PayPal’s growth is that, unlike traditional payment methods which developed in an offline world and have been overlaid onto eCommerce, PayPal’s platform was built with eCommerce in mind. As such, PayPal has developed tools and risk management measures to address the unique complexities of handling card not present payments over the web – one of th e fastest growth categories in payments. Moreover, PayPal is elegantly structured to simplify the web of connections required in a traditional payment system, making it well positioned to penetrate the small business payments market. Imran Khan (1-212) 622-6693 imran. t. [email  protected] com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009 Figure 2: PayPal Simplifies the Payment Process Traditional payment structure Merchant Payment gateway provider Merchant bank Source: J. P. Morgan. PayPal payment structure Merchant Consumer Consumer Card issuer processor Card-issuing bank Merchant bank Consumer bank We think the online marketplace, and sellers in particular, benefit from this simplification in several ways: †¢ Ease of Use.PayPal gives virtually anyone the capacity to accept payments, enabling a merchant to operate even at an initial scale that would otherwise be uneconomical (i. e. , there are no minimum requirements for payment volume in order to use PayPal. ) Higher level of trust. The payments system is not very transparent, and not all aspects were intended for mass use. A trusted central clearinghouse like PayPal can encourage use of online payments by lowering users’ safety concerns and raising their willingness to send money online. †¢PayPal Is Differentiated beyond Just Online Commerce PayPal is different from other payment brands (e. g. MasterCard, Visa) in that it is a vertically integrated payment provider. In other words, PayPal is a single source provider of payment services. By contracting directly with PayPal Merchant Services, small merchants can get all of their payment needs, and do not necessarily need a separate merchant bank account or payment gateway services provider. PayPal is gradually expanding its presence off eBay by promoting itself as an integrated payment offering along side other payment brands (e. . MasterCard, Visa), supported by PayPal ’s own merchant services offering and alliances with payment vendors like CyberSource (payment gateway) and Chase Paymentech (largest merchant acquirer in the U. S. ). PayPal’s Product Offerings for Online Sellers PayPal offers several different products for payment acceptance, based on the size and needs of the merchant: †¢ Email product. This is the offering used largely by smaller eBay merchants, who receive payments entirely via e-mail, with no site of their own on which they need to integrate PayPal. Website Payments Standard.This product allows merchants to place a PayPal button on their site, and when a user is ready to check out, the user hits the button and is taken to the PayPal site where the actual checkout occurs. †¢ 4 Imran Khan (1-212) 622-6693 imran. t. [email  protected] com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009 †¢ Website Payments Pro. With an incremental $ 30 monthly fee, the Pro product is better integrated into a seller’s site. The product is intended for small- to medium-size sellers, and requires the seller to be using a compatible hopping cart vendor (most are compatible). Express Checkout. Intended for larger merchants (those already accepting include Dell and Barnes & Noble). Express Checkout is incremental to the payment acceptance service used by a vendor – it gives users an additional checkout option. When a shopper uses Express Checkout, s/he logs into PayPal, and PayPal then forwards address and other info to the merchant. This allows an existing PayPal user to bypass entering personal and shipping information again, even if it is the user’s first time using the specific merchant. †¢ Strong Growth in Active UsersBy continuing to add users across multiple platforms, PayPal has been able to post strong user growth in recent quarters, even despite the slowdown in on-eBay growth and low-single-digit u ser growth on the eBay site itself: Figure 3: PayPal Active User Growth Strong in Recent Quarters Users in Millions 150 100 50 26. 7% 23. 7% 20. 7% 19. 6% 18. 6% 19. 2% 17. 7% 16. 3% 16. 1% 16. 0% 17. 3% 22. 9% 21. 4% 30% 20% 10% 73 70 65 63 60 57 53 55 51 47 49 45 44 0 0% 1Q'06 2Q'06 3Q'06 4Q'06 1Q'07 2Q'07 3Q'07 4Q'07 1Q'08 2Q'08 3Q'08 4Q'08 1Q'09 Pay Pal Activ e Accounts Y/Y Grow th Source: Company reports, J.P. Morgan Payment Business Basics For a primer on the payments industry, please see Payment Processing: Payments Market Share Handbook published on June 5, 2009 by J. P. Morgan's Computer Services & IT Consulting analyst, Tien-tsin Huang When a buyer hands cash to a seller, the transaction is self-contained. If a credit (or debit) card is involved, however, several other parties become involved in the transaction, which we describe below: †¢ Issuer (Cardholder’s Bank). Card transactions start with a card issued by an issuing bank (e. g. Bank of America, Chase, et c. ) to a consumer.In terms of economics, the bank that issued the consumer’s credit card takes the purchase price, collects its interchange fee (in the US, ~170 -225 bps depending on the type of card), and passes the remainder to the†¦ Acquirer (Commonly the Merchant’s Bank). The acquirer provides merchant services to the merchant, handling all the card and/or electronic payment acceptance needs of the merchant. The merchant’s acquiring bank 5 †¢ Imran Khan (1-212) 622-6693 imran. t. [email  protected] com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009 ccepts the payment, collects a merchant discount (generally in the 30-50 bps range in the US), and forwards the balance to the seller/merchant. Both the Issuer and the Acquirer pay a small (~7-9 bps each) fee to the Payment Network (see next entry). Merchant acquirer functions include: †¢ †¢ †¢ †¢ †¢ †¢ Sign up merchants to enable them to accept card payments. Enable merchants to authorize card payments via the network. Pay all network and associated fees for a merchant’s transactions Facilitate clearing and settlement of card payments Provide incremental services, e. g. , sending out statements, etc. Payment network (e. g.Visa, MasterCard). As the backbone to the payments industry, networks connect various banks that need to process credit card payments with merchants and provide authorization, clearing and settlement services. Networks also set rules and interchange rates (earned by the issuing bank). Payment gateway. In the offline world, the payment gateway is the equivalent of a point-of-sale terminal that accepts the payment type (e. g. credit, debit card) and translates it into a format that can be accepted by the merchant acquirer. In the online world, the gateway generally connects an eCommerce site with the merchant acquirer.PayPal already functions as a Payment G ateway, largely as a result of its acquisition of VeriSign’s payment business, which had 144,000 customers when acquired in 4Q’05. †¢ 6 Imran Khan (1-212) 622-6693 imran. t. [email  protected] com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009 Figure 4: Example of a Credit Card Payment Processing Cycle Source: J. P. Morgan. How Does PayPal fit in? In most cases, when a PayPal user pays with a credit or debit card, PayPal functions as the Merchant (in Fig. 4).PayPal relies upon its merchant acquirer (usually Wells Fargo) to facilitate the transaction. PayPal the charges the merchant its fees, which on average represent a spread over what the acquirer charges PayPal. In addition, if merchants want, PayPal offers certain merchant acquiring services such as the means to authorize valid card transactions and facilitating the clearing and settlement of the transaction through the payment network. At this point, we estimate that PayPal’s merchant acquiring business comprises less than 5% of PayPal’s TPV. 7 Imran Khan (1-212) 622-6693 imran. t. [email  protected] om Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009 PayPal Revenue Model Transactional Revenue PayPal’s business model involves collecting a percentage of revenue from each payment made on the system; this percentage has remained in the 3. 75%-4. 0% range since F’05. In F’08, PayPal collected 3. 86% of TPV as revenue. The following table summarizes the contributors to take rate: Table 1: Contributors to PayPal’s Transactional Revenue Take Rate Type Cross-border transactions (â€Å"CBT†) US sellers, non-CBT Int'l sellers, non-CBT Payment Gateway Website Payments Pro Source: J.P. Morgan estimates % of revenue ~35% ~33% ~25% ~3-5% ~2-5% Comment PayPal charges up to 100 bps higher rates for CB transactions; charges an additional 250 bps for currency conversion Sliding scale from 1. 9% based on volume Country-specific pricing; generally higher rates than US Acquired from Verisign in 4Q'05; limited growth since Monthly $30 fee for WPP product Figure 5: Our Estimates of Contributors to PayPal’s Transactional Revenue Int'l rev enue Pay ment Gatew ay Website Pay ments Pro Monthly Fees Cross-border rev enue US rev enue Source: J. P. Morgan estimatesMarketing Services and Other Revenue Several items are counted as a part of Marketing Services and Other revenue. These include: †¢ Interest earned on some customer balances. PayPal earns revenue as it receives interest on the balances of some non-US account holders. Note that US customer balances are held in FDIC-insured accounts or in a money market account; PayPal does not receive interest on these accounts. BillMeLater interest and fees. Interest and fees earned on existing BML client balances are classified as Marketing Services and Other revenue. †¢ Comparing PayPal Fees to Online CompetitorsPayPal’s fee structure is similar to those of its online-only competitors; both Google Checkout and Checkout by Amazon offer a similar package of fees depending on a merchant’s monthly sales volume; Amazon differs in charging a slightly different fee level for transactions under $10 as well as minimal cross-border support: both buyer and seller must have a US-based financial instrument to use the service. Both Google 8 Imran Khan (1-212) 622-6693 imran. t. [email  protected] com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009 nd PayPal charge roughly (in Google’s case, exactly) 1% more for cross-border transactions. See Table 2 for a summary. As a point of reference, we believe offline fees for accepting cards (aka merchant discount rate) average around 1. 9-2. 0% in the U. S. In March of 2009, Google announced that it woul d no longer offer a discount on payment processing on Google Checkout for Google AdWords advertisers. Table 2: Fees for PayPal, Google, Amazon Remain Similar Transaction Type/Volume Transactions under $10 Up to $3,000 / month Between $3K-$10K Between $10K-$100K $100K and above Cross-border PayPal Same as below 2. % of transaction + 30 cents 2. 5% of transaction + 30 cents 2. 2% of transaction + 30 cents 1. 9% of transaction + 30 cents Varies by currency but ~1% extra; payments with currency conversion add 2. 5% charge Google Checkout Same as below 2. 9% of transaction + 30 cents 2. 5% of transaction + 30 cents 2. 2% of transaction + 30 cents 1. 9% of transaction + 30 cents 1% of transaction Checkout by Amazon 5. 0% of transaction + 5 cents 2. 9% of transaction + 30 cents 2. 5% of transaction + 30 cents 2. 2% of transaction + 30 cents 1. 9% of transaction + 30 cents US only (seller and buyer must have US-based account)Source: Company websites PayPal’s Transaction Costs Set aga inst the ~3. 9% revenue take rate, the business faces two key expense lines that drive its transactional margins: transaction processing cost and fraud losses: Figure 6: F’08 Revenue and Expense Drivers for Aggregate PayPal Payment Volume % of Total Payment Volume, Aggregated across all TPV and Funding Methods 4% 3% 2% 1% 0% 100% of PP rev enue 30. 9% of rev enue 1. 19% 7. 4% of rev enue 0. 28% 61. 8% of rev enue 3. 86% 2. 67% 2. 38% 2. 38% Rev enue Take Rate – Processing Ex pense – Transaction Losses = Transaction ProfitSource: Company reports, J. P. Morgan estimates Processing expense is driven by funding mix PayPal’s profitability is driven in large part by the mix of sources from which customers draw funds in order to pay on PayPal. In particular, when customers pay using a credit card, PayPal incurs a significantly higher cost of funds than when customers fund a purchase using their PayPal balance or an ACH transfer. 9 Imran Khan (1-212) 622-6693 imr an. t. [email  protected] com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009Specifically, PayPal, similar to any merchant that accepts credit cards, is charged a variety of fees (the largest of these is interchange, which is the fee charged by the cardholder’s bank). For PayPal, we believe these fees amount to ~220-250 bps of payments funded with a credit card, with the range representing different types of cards and different geographies (interchange fees are generally higher in the US than across parts of the world, including Europe and Australia). Fees are slightly lower, but still in the 150200 bps range, if users choose a debit card rather than a credit card.By comparison, a payment funded from money already in a user’s PayPal account carries virtually no cost to PayPal. A payment funded though ACH carries a flat processing fee, usually less than 25c; this represents less than 40 bps on an ave rage PayPal transaction of $62. Figure 7: PayPal’s Funding Mix Merchant PayPal collects take rate (~1. 9% to as much as 5%), based on merchant volume and location (significantly higher if currencies converted) PayPal If funded via If funded from user’s PayPal balance, cost to PayPal is negligible Credit card, cost to PayPal is ~220-250 bps; PayPal then functions as Merchant in Fig. above. If funded via If funded via ACH, cost to PayPal is ~$0. 10-$0. 25 Debit card, cost to PayPal is ~150-200 bps PayPal’s cost of funds becomes more favorable Source: J. P. Morgan 10 Imran Khan (1-212) 622-6693 imran. t. [email  protected] com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009 Drivers of Funding Mix PayPal allows users to pay with both a credit/debit card and ACH; however, PayPal defaults to using an existing balance or ACH, and users must actively select to pay via a credit/debit card every time t hey use the service.The company has noted that customers generally shift toward a more favorable funding mix over time. Additionally, as PayPal adds new merchant sites, users of those sites begin with a heavier mix of credit card use. The mix for a merchant site begins to resemble that for PayPal overall as users’ familiarity with PayPal grows – generally, 12-18 months. Additionally, we believe BillMeLater, which is funded entirely through checks and ACH, can help improve funding mix for PayPal down the road. Other Margin Drivers PayPal margins have historically been in the 20% range, excluding corporate expenses.We believe several factors drive the variance between the 60%+ transaction margins and the high-teens overall profitability. Primary among these are: †¢ Customer service costs. Call centers as well as a variety of employees needed to manage any problems that arise in the payments process. We do not expect these expenses to show meaningful economies of sca le as the business continues to grow. Sales and Marketing. As PayPal has invested in growing its Merchant Services business, we believe that segment’s growth has been fueled by higher Sales spend. When the business matures, we believe there should be some scale economies in Sales. BillMeLater Basics PayPal acquired BillMeLater in 4Q’08. The service allows users to request transactional credit, rather than a revolving credit line as is the case with a credit card. BML offers consumers rapid credit decisioning on the basis of less detailed information (date of birth and last four digits of a Social Security Number) than necessary for more traditional financing. The majority of BML’s revenue is derived from consumer interest payments and fees, as shown below: 11 Imran Khan (1-212) 622-6693 imran. t. [email  protected] com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009 Figure 8: BillMeLater Econ omics as of Time of Acquisition % of TPV 12% 10% 8% 6% 4% 2% 0% 2. 4% Merchant Fees + 6. 5% 3. 6% 2. 9% 3. 4% 2. 1% 4. 1% Cust. Interest Cust. Fees – Acquisition ; Income + Credit ; Cost of Funds = Transaction Profit Serv icing – Fraud Loss – Source: Company presentation, J. P. Morgan estimates Note: Cost of funds includes an implied cost of financing consumer receivables; transaction expense for processing funds is minimal due to funds being sourced primarily via ACHAt this point, BillMeLater’s presence on the eBay site itself remains minimal; the company has placed a 3Q’09 target for better integration of the business with PayPal, and we believe that, after fuller integration, eBay may choose to drive higher BML penetration on the Marketplaces business through, e. g. , promotional or interest-free financing. Complete integration of BML into all aspects of the PayPal solution is expected in 1Q’10. Charge-offs BillMeLater reports its net cha rge-offs as a percentage of the average receivables balance over the course of the quarter; in Q1’09 net charge-offs rose to 8. 95%, compared to 8. 5% during the part of the fourth quarter after the acquisition. Due to the transactional nature of the business, we believe BML has the capacity to continue keeping loan losses at a reasonable level; additionally, the company has expressed that it plans to focus on being more conservative with offers of credit in the near term, even at the expense of TPV growth. Nevertheless, we expect charge-offs to continue rising somewhat. Historically, credit card charge-offs have been correlated with the unemployment rate, as seen below. 12 Imran Khan (1-212) 622-6693 imran. t. [email  protected] com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009 Figure 9: Historically, Credit Card Charge-offs Rise when Unemployment Rises 10% 8% 6% 4% 2% 0% Q1'95 Q1'96 Q1'97 Q1'98 Q1'99 Q 1'00 Q1'01 Q1'02 Q1'03 Q1'04 Q1'05 Q1'06 Q1'07 Q1'08 Q1'09 Unemploy ment Rate Source: Federal Reserve, J. P. Morgan Credit Card Net Charge-off Ratio While we believe charge-offs at BML can be managed better, due to the transactional nature of BML’s exposure, we think rising unemployment is unlikely to leave the business untouched. Thus, if unemployment keeps going up, we would expect continued upward drift in charge-offs.PayPal’s Growth Strategy PayPal’s original growth engine was the marriage between PayPal and eBay, and the ability to drive higher penetration on the eBay site. We believe the low-hanging fruit in this regard has largely been gathered, but room for growth still exists along several areas of opportunity. 1. Growth Opportunities for PayPal on eBay Continued Geographic Expansion Can Drive Growth One of the biggest factors driving higher PayPal penetration on eBay has been geographic expansion in territories where the business is less mature than in the US.PayPal has had approximately five years of operating history in much of continental Europe, compared to nearly a decade in the United States. Table 3: PayPal Penetration as % of Addressable TPV continues to Grow % of addressable TPV Country US Canada United Kingdom Australia France Spain Italy Germany 2004 64% 60% 49% 7% 8% 5% 7% 2% 2008 80% 79% 74% 47% 43% 37% 36% 15% 2011(E) 84% 82% 81% 72% 61% 57% 56% 39% Comment Could see add’l boost from BML Penetration already nearly 60%; see below In terms of online activity, much of continental Europe is following in the footsteps of the UK, but several years behind.Penetration nearly doubled in F’08 alone Source: eBay Presentation, J. P. Morgan estimates We believe the 2008 experience in Australia, where PayPal penetration went from under 40% to nearly 60% over the course of a year, is reflective of eBay’s capacity to grow penetration via rule changes: the company rolled out rules mandating most sellers to offer PayPal as an option in 2008, and penetration grew by more than half over the course of the year. 13 Imran Khan (1-212) 622-6693 imran. t. [email  protected] com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009Figure 10: Australia Demonstrates PayPal’s Capacity to Quickly Boost Penetration 60% 50% 40% 30% Q1'08 Q2'08 Q3'08 Q4'08 Source: Company presentation, J. P. Morgan estimates Additionally, several continental European countries have seen growth roughly in parallel since the rollout of PayPal in much of continental Europe in summer 2004. We See Limited Opportunity for Domestic on-eBay Growth Having already achieved notable levels of penetration on established sites, we don’t think PayPal will see significant additional increases in on-eBay penetration from current levels, especially in the US.However, as eBay increases the amount of buyer protections and begins to offer credit through BML, we thi nk the percentage of GMV that is addressable by PayPal can rise. Figure 11: PayPal volume as a % of Addressable GMV, 2008 GMV in $B 30 20 $29B $24B 10 0 79% 41% US Source: Company reports, J. P. Morgan Pay Pal Non-Pay Pal International One additional way to increase penetration on the site is for the company to offer increased incentives for sellers and buyers to choose PayPal as the payment method.These incentives can take the form of carrots (coupons, higher levels of protection) or sticks (e. g. , rules making other forms of payment more difficult to accept). PayPal has continually increased buyer protections on eBay for uses who pay with PayPal, with the levels rising from $1,000 to $2,000 in January 2007 and going up again to offer unlimited coverage in June 2008. We think offering higher levels of buyer protection – but only when paying with PayPal – remains a useful lever for increasing the penetration of PayPal on the eBay site. 14Imran Khan (1-212) 622-6693 im ran. t. [email  protected] com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009 PayPal on eBay: Challenges Weak Marketplaces Growth Will Negatively Impact TPV Growth In line with recent declines in GMV, the percentage of PayPal’s TPV that is driven by on-eBay activity has been steadily declining in recent quarters, with 3Q’08 having represented the first quarter in PayPal’s history that saw a majority of TPV come from the Merchant Services part of the Payments business.Figure 12: On-eBay TPV Continues to Decline as a Percentage of Total 70% 60% 50% 40% 30% 20% 10% 0% 62% 58% 56% 56% 54% 51% 49% 49% 46% Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Percentage of TPV deriv ed on eBay Source: Company reports, J. P. Morgan estimates As eBay has struggled to improve GMV growth and faced headwinds from FX, the on-eBay portion of TPV has seen nominal growth turn negative in recent quarters, a s shown in the chart below; adjusted for FX the last two quarters have seen on-eBay TPV grow 5% and 3%, respectively.Figure 13: On-eBay TPV Growth Continues to Lag Off-eBay TPV Y/Y change 80% 60% 40% 20% 0% -20% 1Q'07 50% 19% 57% 62% 66% 61% 57% 49% 35% 26% -7% 18% 18% 17% 17% 19% 12% -3% 2Q'07 3Q'07 4Q'07 1Q'08 2Q'08 3Q'08 4Q'08 1Q'09 On-eBay TPV, Y/Y Source: Company reports, J. P. Morgan estimates Off-eBay TPV, Y/Y We are currently modeling GMV to shrink by 14% in F’09, returning to slight growth in F’10 with a 1% rise. Even when looking only at non-Vehicles GMV, our model calls for an 11% decline this year, followed by a 1% growth in the next year.While we think eBay has taken many correct steps in improving the competitiveness of its Marketplaces segment, we remain concerned that the competitive environment 15 Imran Khan (1-212) 622-6693 imran. t. [email  protected] com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009 will make it difficult for eBay to reaccelerate growth and reclaim market share in future years. Additionally, we believe the shift to a frictionless eCommerce model is driving buyers to choose fixed-price formats over an auction approach.As this has the effect of moving from a space eBay controls into a much more competitive, multi-channel environment, we think it creates an additional headwind to growth. Cultural Headwinds in Some Geographies In addition to the above, two specific geographic regions have presented challenges for growing PayPal penetration: †¢ In Germany (and Austria, combined, estimated at ~15% of GMV), the majority of online payments are made using bank transfers, and PayPal has had limited success displacing this system. However, as Table 3 (above) indicates, PayPal’s penetration in Germany has been rising.In Korea (we estimate ~5% of GMV), where eBay recently announced plans to acquire GMarket and combine it with its current a uction. co. kr site, the predominant mode of payments is using escrow accounts. As in Germany, we believe penetration can rise over time as users become more comfortable with PayPal. †¢ Given the challenges in these two areas, which comprise approximately one fifth of eBay’s GMV, we believe it could be difficult for eBay to go significantly past the ~70% penetration threshold in the next five years. Bottom Line: We see ~$36B in F’11 on-eBay TPVBased on our current model of F’10 GMV (excluding Vehicles) of $43B, and an assumption of accelerating GMV growth to 10% Y/Y in F’11, we think PayPal’s oneBay TPV could hit $36B in F’11 (implying a 6% 3-year CAGR), with a range of $33B-$40B depending on more or less favorable assumptions. Figure 14: On current trends, on-eBay portion of PayPal would contribute ~$36B in F’11 TPV On-eBay TPV, $ in billions 40 35 30 25 2008 2009E Optimistic Current Model 2010E Pessimistic 2011E Source: Company reports, J. P. Morgan estimates 16 Imran Khan (1-212) 622-6693 imran. t. [email  protected] com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009 2. Growth Opportunities for PayPal off eBay PayPal’s growth through increasing penetration of off-eBay online commerce has been a key component of the business’s growth in recent years. We think the company retains significant runway to add customers. Historically, Focus on Smaller Sellers Due to its roots as a solution for payments on the eBay platform, PayPal has generally seen a higher penetration among smaller and mid-size sellers.This is partly due to the fact that PayPal has no fixed costs to a merchant, whereas accepting credit cards carries fixed costs. For a seller generating $100K in annual revenue, a $60$70/month cost for accepting credit cards amounts to nearly 1% of sales. Table 4: Economics of PayPal compelling for SMB market PayPal Setup fees Monthly Service Fee Monthly Gateway Fee Transaction fee Monthly Minimums $0 $0 $0 1. 9%-2. 9% + $0. 30 None Merchant Processor $0-$300 $20-$50 $10-$30 2. 0%-3. 0% + $0. 10-$0. 50/transaction $0-$30Source: Company reports, processor websites and J. P. Morgan estimates Figure 15: Payment Solutions P a y m e nt s o lu tion s †¢ †¢ †¢ D is a d va n ta ge s re la tiv e to P ay P al Buyer S eller C an n ot b e tra cked L im ite d p rote ction ag a in st lo ss/th eft R estricte d to virtu a l w orld †¢ †¢ L im ite d p ro te ction a g a in st lo ss/th eft R e stricte d to virtu a l w orld †¢ †¢ S lo w se ttle m en t/fu lfillm e n t tim e C ost/tim e of w ritin g che cks †¢ †¢ S lo w se ttle m en t tim e F ra ud riskC red it C ard Joh n Q Pu b lic 5012 345 6 7890 1234 †¢ †¢ †¢ †¢ †¢ †¢ S ecu rity unce rta in ty of sm a ll b usin e ss site C re d it lim its In te re st co sts †¢ †¢ †¢ †¢ †¢ H ig h tra n sa ctio n fee s – p ro hib itive fo r sm a ll m erch a n ts R e qu ire s m e rcha n t b ank a ccoun t F ra ud risk (card no t p rese n t) P ro ce ssin g tim e /co st S e tup co sts W ire (e . g. , W e ste rn U n io n ) F ee s U su a lly re qu ire s p h ysica l visit to ve n do r L im ite d a cce p ta n ce Source: J. P. MorganPenetration among Large Businesses Small, but Growing Whereas smaller sellers were PayPal’s bread-and-butter in the early days, the greater part of online commerce now occurs at larger sellers. This is especially true when one includes online travel, a category PayPal has pursued aggressively: whereas eCommerce has a fairly long tail of sites, the great majority of online travel is transacted at the large providers and OTAs. 17 Imran Khan (1-212) 622-6693 imran. t. [email  protected] com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009Table 5: Penetration at top 50 onl ine merchants, by geography As of March 2009 Country USA UK Germany France Australia Penetration 42% 28% 16% 36% 60% Source: Company presentation and J. P. Morgan estimates Internet Retailer Data: PayPal’s Penetration Higher with Smaller Merchants Based on data from Internet Retailer, we estimate that 26% of the total sales volume on the top 50 online retailers in F’08 came on sites that accept PayPal. Consistent with PayPal’s past focus on smaller sellers, PayPal penetration among sites outside the top 50 is 39%, nearly 1. x the penetration among the top 50. Figure 16: Smaller Merchants More Likely to Accept PayPal % of internet retailers accepting PayPal, weighted by 2008 online sales Internet Retailer Top 50 I. R. Top 50, ex cluding Amazon Rest of I. R. Top 500 (##51-500) 0% Source: Internet Retailer, J. P. Morgan estimates 26% 33% 39% 10% 20% 30% 40% Note: Internet Retailer does not include travel sites in its rankings The following table summarizes PayPalâ €™s presence (including previously existing BillMeLater relationships) on the top 50 retail sites as ranked by Internet Retailer. 8 Imran Khan (1-212) 622-6693 imran. t. [email  protected] com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009 Table 6: 26% of Revenue at top 50 US eCommerce Sites is Addressable by PayPal 2008 Sales in $ millions Site Amazon. com Inc. Staples Inc. Dell Inc. Office Depot Inc. Apple Inc. OfficeMax Inc. Sears Holdings Corp. CDW Corp. Newegg Inc. Best Buy Co. QVC Inc. SonyStyle. com Walmart. com Costco Wholesale Corp. J. C. Penney Co. Inc. HP Home & Home Office Store Circuit City Stores Inc.Netflix Inc. Victoria's Secret Target Corp. Systemax Inc. L. L. Bean Inc. Macy’s Inc. Williams-Sonoma Inc. Gap Inc. Direct HSN Inc. Zappos. com Inc. Amway Global Overstock. com Inc. Avon Products Inc. 1-800-Flowers. com Inc. Nordstrom Inc. Buy. com Inc. Redcats USA The Neiman Marcus Group In c. Musician's Friend Inc. Blockbuster Inc. PC Connection Inc. Toys ‘R' Us Inc. Cabela's Inc. BarnesandNoble. com Inc. Scholastic Inc. The Home Depot Inc. VistaPrint Ltd. Saks Direct Nutrisystem Inc. Peapod LLC drugstore. com Inc. Nike Inc. Kohl's Corp.Verticals Multiple Office Supplies Computers Office Supplies Computers, Digital Sales Office Supplies Department Store Computers Computers Electronics Multiple Electronics Multiple Multiple Department Store Electronics Electronics Video Rental Apparel Multiple Electronics Apparel Department Store Home Apparel Multiple Apparel Multiple Multiple Health & Beauty Flowers Apparel Multiple Multiple Department Store Musical Equipment Video Rental Computers Toys Sporting Goods Media Media Home Office Supplies Department Store Food Groceries Health & Beauty Apparel Department Store 2008 Online Sales $19,170 $7,700 $4,830 $4,800 $3,642 $3,084 $2,693 $2,600 $2,100 $2,015 $1,993 $1,828 $1,740 $1,700 $1,500 $1,497 $1,414 $1,365 $1,333 $1,209 $1,072 $1,044 $1,040 $1,033 $1,030 $1,016 $1,014 $904 $834 $754 $750 $686 $657 $617 $565 $531 $526 $516 $500 $497 $466 $455 $437 $401 $381 $376 $373 $367 $366 $356 PayPal? No No Yes No No Yes No No Yes No No Yes Yes No No Yes No No No No Yes No No No No No Yes Yes Yes Yes Yes No Yes No No Yes No No Yes No Yes No No No No No No Yes No No BML?No No No No Yes Yes No Yes Yes No Yes No Yes No No No No No No No Yes No No No No No Yes Yes Yes No Yes No Yes Yes No Yes No No Yes Yes No Yes No No No Yes No Yes No No Comment Ended BML relationship after PayPal Acquisition Could leverage BML relationship Could leverage BML relationship Site now owned by Systemax, a PayPal customer Could leverage BML relationship Could leverage BML relationship Could leverage BML relationship Could leverage BML relationship Source: Internet Retailer, J. P. Morgan estimates 19 Imran Khan (1-212) 622-6693 imran. t. [email  protected] com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com N orth America Equity Research 26 June 2009 Off-eBay market share of 4. % in F’08 We estimate that PayPal’s $29. 5B Merchant Services TPV in F’08 (excluding BML) represented 4. 2% of the combined volume of eCommerce and Travel spend in that year. Our current estimates call for that number to rise to nearly 4. 9% of the total in F’09. Table 7: J. P. Morgan eCommerce and Travel Market estimates $ in billions Category Off-eBay eCommerce Travel Total off-eBay volume PayPal off-eBay TPV PayPal penetration F’07 311. 4 271. 9 583. 3 19. 9 3. 4% F’08 379. 0 329. 2 708. 2 29. 5 4. 2% F’09E 412. 0 342. 2 754. 2 37. 0 4. 9% F’10E 490. 8 405. 1 895. 9 50. 2 5. 6% F’11E 561. 4 458. 0 1019. 3 64. 2 6. 3% Source: Company reports and J. P.Morgan estimates We estimate that combined global online spend on eCommerce and Travel will exceed $1 trillion in F’11. By our estimate, PayPal’s Merchant services would need to access over 6. 0% of this volume in order to hit the low end of the target $4B-$5B PayPal revenue range indicated by the company. 3. Growth through BillMeLater We see several key effects on PayPal of the 4Q’08 acquisition of BillMeLater. In the near term, we think the addition could hurt profitability, while longer-term, we believe it can become a contributor to PayPal growth both on- and off-eBay. †¢ Minimal near-term TPV impact. BML accounted for 1. 2% of total 1Q’09 TPV.As such, we think it is important to note that the current impact of BML on PayPal results is likely to be somewhat small. Near-term growth likely slow. The company has stated that it intends to be very conservative in its approach to the tradeoff between growing BML volume and maintaining healthy credit metrics. Given the current environment, we believe this will significantly dampen growth in BML TPV through at least the end of F’09. Integration, portfolio losses to impact profits. PayPal’s segment margin in the last two quarters was 500 bps lower than in the same two quarters a year ago. The company has attributed this decline to the impact of integrating BML as well as charge-offs related to the unit’s loan portfolio.Medium-term, synergies become possible. Once consumer credit regains a measure of health, we think the company will begin to use BML as an additional tool to grow business, e. g. , by offering financing to incentivize users to pay with PayPal both on and off eBay. Target is convenience shoppers, not the underbanked. We believe eBay sees BML as an additional feature (or convenience) to attract higher-quality customers, rather than as a tool to expand its reach among customers who do not otherwise have access to credit. This approach appears consistent with the tradeoff noted above of slower growth in exchange for better credit metrics. †¢ †¢ †¢ †¢ 20Imran Khan (1-212) 622-6693 imran. t. [email  protected] com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009 †¢ Auto financing unlikely to be priority. As noted above, Vehicles sold on eBay have been largely beyond PayPal’s reach up to now. We think eBay sees BML’s core expertise in transactional credit for smaller amounts than involved in a car purchase. A significant expansion of the business to include auto financing seems unlikely in the near to medium term. Impact on margins temporary. eBay expects segment margins to revert to historical trends as BML is incorporated into PayPal more completely (e. g. the company expects BML to be integrated into the PayPal wallet by 3Q; additionally sales teams for BML and for Merchant Services are being merged to give clients a single touch point). †¢ BillMeLater Can Improve Funding Mix We think the impact of BillMeLater in the longer term will be felt most strongly on PayPal’s funding mix: BML does not accept credit ca rds, and as such faces a lower transaction funding cost than the PayPal business as a whole. As such, any portion of TPV that shifts from the historical mix of funding sources to BML will help lower PayPal’s cost of funds. Assuming, conservatively, that PayPal manages the business to have a similar take to the rest of PayPal, we estimate that each 1% shift of TPV onto BillMeLater would drive ~2 bps improvement in funding cost.Thus, if BML were to grow to 4% penetration of our mid-point F’11 scenario of $100B in TPV, it would drive ~8 bps improvement in funding cost: an incremental $80M contribution to the bottom line, or 5c of EPS. Table 8: Sensitivity Analysis: EPS Boost from Lower Transaction Cost as BML Penetration Rises TPV in $B, BML as a % of TPV, EPS impact in $ TPV BML % 87. 1 100. 5 113. 8 Source: J. P. Morgan estimates 1% $0. 01 $0. 01 $0. 01 2% $0. 02 $0. 02 $0. 03 3% $0. 03 $0. 04 $0. 04 4% $0. 04 $0. 05 $0. 05 5% $0. 05 $0. 06 $0. 07 Credit Cards’ P ain Could Be PayPal’s Gain Recently, the House and Senate passed bills restricting certain practices in the credit card industry. We believe that such steps could have several points of impact on PayPal.Crucially, if these rule changes make credit card issuers less generous toward consumers (e. g. , lower profitability drives issuers to lower the levels of rewards for credit card use), PayPal could benefit from funding mix improvement, as the incentives for customers to fund their accounts with credit cards, vs. debit or ACH, would be reduced. Further, we believe that, should credit card issuers try to recapture profitability with less consumer-friendly rules as well as more frequent fees, the quality of the user experience for credit cards will erode, making consumers incrementally more likely to use PayPal. 21 Imran Khan (1-212) 622-6693 imran. t. [email  protected] om Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009 4. Growth Opportunity: Expanding Merchant Acquiring Business We believe PayPal currently has two strategic growth opportunities going forward. The company can drive greater adoption of the PayPal solution by continuing to establish PayPal as a brand for online payment, alongside incumbent players such as Visa and MasterCard. Alternatively, PayPal can attempt to improve its payment economics by becoming a scale merchant acquirer. This would allow PayPal to capture the ~30 bps on card transactions that we estimate it currently gives up to its acquirer.Finally, PayPal may attempt to skate along the knife-edge between the two above strategies, maintaining relationships with large acquirers such as Chase Paymentech while at the same time functioning as an acquirer for its smaller client base. PayPal as a Brand Chase Paymentech, the largest merchant acquirer in the U. S. and the largest processor of e-Commerce transactions, offers PayPal as an integrated payment option alongs ide well known names like Visa and MasterCard. As such, Chase Paymentech clients have the option to advertise acceptance of PayPal as a payment type. According to Chase Paymentech, clients that accept PayPal (in addition to credit cards) commonly see an increase in sales. We view this as an important indication that PayPal has potential to be a powerful brand off eBay.We believe PayPal’s recent stated focus on larger merchants suggests this is the more likely strategic direction for the company, as PayPal may not want to jeopardize its status as a partner to the large acquirers, which make it easier for enterprise-scale businesses to include PayPal as one of several payment choices. Can PayPal Become a Scale Merchant Acquirer? In our view, PayPal also has the potential to become a scale merchant acquirer, which could enhance its off-eBay presence, especially among smaller and mid-size merchants. As a merchant acquirer, PayPal would handle all of the card processing needs of a merchant, including directly processing other brands like Visa and MasterCard.We believe PayPal can offer very competitive rates to small merchants (who often pay heavy miscellaneous fees to acquirers), given its scale, allowing it to deepen relationships with merchants and potentially handle offline transactions as well. Smaller merchants (especially the ~87% of US merchants with annual card acceptances under $100K) tend to pay a much higher spread to their acquirer. Whereas such merchants account for ~10% of credit card volume, we believe they represent as much as $2. 5B in merchant acquirer revenue: more than 1/3 of the total revenue in the US merchant acquirer business. We think PayPal’s historical strength among smaller sellers can be an advantage in accessing this market. Chase Paymentech offers PayPal as an integrated payment option for its clients.Chase Paymentech was the largest merchant acquirer in the U. S. in 2008 with 22. 5% market share 22 Imran Khan (1-212) 62 2-6693 imran. t. [email  protected] com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009 Table 9: Top Ten US Merchant Acquirers, 2008 $ in billions Merchant Acquirer Chase Paymentech First Data BofA Merchant Svcs Elavon Fifth Third Processing Solutions Global Payments Wells Fargo Merchant Services Heartland Payment Systems First National Merchant Solutions RBS WorldPay Source: The Nilson Report. V/MA volume $567 $293 $283 $181 $165 $93 $91 $75 $51 $48 Market share 22. % 16. 9% 11. 2% 7. 2% 6. 5% 3. 7% 3. 6% 3. 0% 2. 0% 1. 9% As noted above, PayPal currently partners with Wells Fargo when it comes to handling non-PayPal branded transactions. One concern about a PayPal entry into the acquirer market would be whether it could successfully maintain its relationships with the other acquirers who currently offer PayPal as an option, and who would come to view PayPal as a more direct competitor. How Much is PayPal Worth? Combining the outlook outlined above, we believe PayPal TPV will reach $100. 5B in F’11; though somewhat more pessimistic or optimistic projections for the unit’s growth yield a range of $87B-$114B.At the midpoint, our estimate is for a 19% 3-year CAGR in Total Payment Volume. Figure 17: On current trends, TPV on pace for just over $100B in F’11 Total PayPal TPV, $ in billions 125 100 75 50 2008 2009E Optimistic New Model 2010E Pessimistic 2011E Source: Company reports, J. P. Morgan estimates Assuming the PayPal take rate remains just below 3. 9% (and assuming healthy growth in PayPal Marketing Services and Other revenue in F’11), our TPV estimate would result in $4. 1B in PayPal revenue. On the profitability side, we believe PayPal is likely to see segment margins shrink to 17. 2% for F’09 due to the continuing integration of BML; by comparison, segment 23 Imran Khan (1-212) 622-6693 imran. t. [email  protected] omTien-tsin Huang, CFA (1-212) 6 22-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009 operating margin as reported by the company was 20. 0% in F’08. We think PayPal segment margins can expand back to above 18% by F’11. Figure 18: Segment income could reach $785M in F’11 PayPal segment operating income, $ in millions 1000 800 600 400 2008 2009E Optimistic New Model 2010E Pessimistic 2011E Source: Company reports, J. P. Morgan estimates Based on our scenarios for PayPal F’11 results, we believe the unit is likely to achieve approximately $450M in Net income. At a 20x multiple, this would yield a $9B valuation. Table 10: Scenario Analysis to Get to a PayPal Value in billions except where indicated On-eBay TPV Off-eBay TPV Total TPV Revenue Segment Margin [Unallocated Corporate Costs] Pro Forma Operating Income ($M) Tax Rate Net Income F'11 Earnings Multiple PayPal Value Source: Company reports, J. P. Morgan estimates Worse Case 33. 0 54. 2 87. 1 3. 57 17. 5% 4% 482 25% 361 16 5. 8 Average Case 36. 3 64. 2 100. 5 4. 09 18. 8% 4% 603 25% 452 20 9. 0 Better Case 39. 6 74. 3 113. 8 4. 61 20. 0% 4% 737 25% 553 24 13. 3 Comparative Valuation of PayPal Unit We believe it is instructive to look at several comparables when it comes to valuing PayPal. Specifically, Visa and MasterCard provide payment networks, while Global 24Imran Khan (1-212) 622-6693 imran. t. [email  protected] com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. [email  protected] com North America Equity Research 26 June 2009 Payments is a pure-play merchant acquirer, functioning in much the same way as PayPal does by providing an on-ramp for merchants into the payment system. Table 11: Comparative Valuation for PayPal $ in billions PayPal $67B 11% 1% $2. 70B 13% 17. 2% Some credit risk due to BML Visa $2,702B -1% 60% $6. 94B 6% 52. 9% None 20. 8 17. 1 15. 4 MasterCard $1,759B -9% 34% $4. 97B 0% 43. 2% None 15. 7 13. 4 11. 7 Global Payments N/A ($93B in F’08) N /A 4% $1. 59B 10% 19. 2% None 18. 4 15. 8 12. 5 CyberSource N/A N/A

Tuesday, July 30, 2019

Eagle Airlines

[pic] Eagle Airlines Business Decisions with Data Models Assignment on Risk Analysis Team Members: Sfykti Dimitra Goumas Evangelos Manikas Athanasios Papaspirou Yiannis As assigned by Mr. Hadjistelios, President of Eagle Airlines, a simulation analysis is developed in order to evaluate company’s intention to proceed with the purchase of a new aircraft. According to the President’s estimations, the uncertain parameters which affect the annual cash flow are the below; 1. Hours flown 2. Charter Price/Hour 3. Ticket Price/Hour 4. Capacity of Scheduled flights 5. Ratio of charter flights 6.Operating Cost/hour The main assumption to work upon the scenarios is that the numbers generated for the different variables remain the same across the years. Initially, a base scenario is built and a profit-and-loss account for a typical year of operation is derived using the most likely values of the different parameters. Upon construction of the base scenario, the optimistic and pessimi stic scenarios are also formulated in accordance to the assumptions by the President in respect to possible variations to higher and lower values than the most likely ones used for the base scenario.For all three scenarios, the demand/cash flow is calculated revealing a wide range of values (from â‚ ¬273. 180 to -â‚ ¬39. 040) among the 3 possible cash flows. In addition, the one-way sensitivity analysis conducted for all six uncertain parameters demonstrate the impact of each parameter on annual cash flow and by the designation of a scatter plot, we can identify to what range of values every uncertain parameter affects the demand. Upon that, a Tornado diagram is plotted in order to visually demonstrate the range of impact of each parameter.According to the diagram, ticket prices/hour and capacity of Scheduled flights seem to be the two important parameters that most influence the annual cash flow, whereas the ratio of charted flights and operating cost/hour are the ones affect the least. Following this determination, a two-way sensitivity analysis is implemented and the outputs shown in a 3D plot illustrate a one-level relationship between the variables. By assuming that the probability distributions are the ones assessed by Mr. Hadjistelios, a test scenario is run using the @RISK add-in with 50. 00 iterations and the results’ interpretation is described below. Interpretation of results The basic data and the main decision factors to be taken into consideration by the President are raised below in order to provide substantial argumentation for the final business decision. ? According to the given data, the annual cash flow of the base scenario is â‚ ¬46. 184, less than the breakeven point by â‚ ¬7. 513. Therefore, in case the base scenario will actually happen, the company will need more than a 5-year lifetime in order to pay out the investment of the new aero plane. In the optimistic scenario, the annual cash flow is â‚ ¬273. 180 and the difference from the breakeven point is â‚ ¬219. 483. According to this scenario, the investment is highly profitable and will be paid off by the end of the first year while a number of approximately â‚ ¬93. 180 profits will be generated. ? In the pessimistic scenario, the annual cash flow is – â‚ ¬39. 040 and the difference from the breakeven point is â‚ ¬92. 737. , which is a bad scenario but at the same time quite unlikely to happen. According to @RISK analysis, as illustrated in the figure below, some important observations are derived; [pic] The probability that the investment will be profitable within a 5-year lifetime is 73. 4%, meaning that the annual cash flow will be greater than the breakeven point of â‚ ¬53. 697. ? The probability the annual cash flow to be less than the breakeven point is 26. 6%, as presented in the graph above. ? However, it is important to refer that the same probability (26. 6%) applies for the company to generate cash over ↚ ¬96. 511. The above implies the fact that if in one year the cash flow is below breakeven point, this under the same probability can be offset by another year’s revenues. [pic] According to the normal probability distribution, the expected value (mean) is approximately â‚ ¬77. 342 that actually is translated into a â‚ ¬23. 645 return on investment. ? A probability over 50% that the company will generate cash flow of at least â‚ ¬74. 467 (median) which represents the 40% of the aeroplane current value. ? However, another important statistical parameter to be taken into account is the standard deviation of â‚ ¬35. 257 that describes a quite wide dispersion/variability of the probability distribution. ? If we do not take into consideration the discount rate of 15%, then the breakeven point will be 36. 00 (180. 000/5) and the probability of the investment to be profitable is 89%. ? In case the company self-funds the purchase out of the cash surplus of the company, t he investment seems to be less risky since potential deviation from the breakeven point does not imply financial obligations to third parties, such as banks (loans and interest rates). [pic] ? The probability that the investment will be paid off already by the end of the first year is 0. 7% while the probability that the company will generate negative values by the end of the first year is 0. % which seems a quite extreme case, with a smallest value of -â‚ ¬22. 642. [pic] ? However, it should be considered that the company operates a number of business parts and it is being taxed for the total activities as a whole, thus with a tax rate of 33% the actual loss will be â‚ ¬22. 642 * 0. 67 =â‚ ¬15. 170, with the assumption that the company is profitable overall. Another important factor to consider is the operations’ expansions by 33% with the purchase of one additional aircraft to the current equipment of the three twin – engine aircrafts which provide charter f lights and scheduled commuter services.The company may redefine the strategy and decide to add new destinations in the services, currently limited to south Balkans, so as under the promising prospects analysed above, to further strengthen the company’s brand name and grow the Share of Market (SoM). The above can be well justified considering both cases of charter and scheduled flights. On the one hand, in respect to charter flights the company seems to have already identified available ground to grow by further building on the level of service.On the other hand, the scheduled flights, currently holding a percentage of 60%, represent the variable that mostly affects the cash flow, according to Tornado diagram. This in combination with the fact that the company â€Å"had slightly more control over the ticket price per/hour of scheduled flights† demonstrates a high future development potential with a thorough strategy. The critical service category in the context of the n ew investment risk analysis for Eagle airlines to analyze is Scheduled flights.Ticket prices/hour and capacity of Scheduled flights, the two most important and correlated variables, should be in depth evaluated according to the most likely possible estimations. For example, according to the data given, the variability for the price per ticket is greater in the higher values than the lowest ones. However, the actual price per ticket is highly correlated to the capacity/utilization rate and the flight hours. The base scenario argues for good prospects, but a deeper analysis could identify opportunities that Eagle airlines should closely monitor and evaluate in order to maximize its profits.It is important also to refer that according to the estimations, there is no high variability of the operating costs compared to the expected value of â‚ ¬445/hour (only â‚ ¬15 in either direction). Some important facts are given also throughout the case providing additional argumentation over the purchase; Piper Chieftain has been maintained according to the legislations and regulatory environment, is in a good condition and the expected normal use is 5 years with possibilities for more, contains the necessary navigation and communication equipment, and insurance has been included in the fixed costs.The above, in case were unknown, would be important cost factors to analyze and include in the risk analysis assessment. The above analysis argues the business decision to proceed with the investment in the Piper Chieftain, having calculating and evaluating the risks involved while recognising the opportunities.

Monday, July 29, 2019

Marketing Communications about advertising Assignment

Marketing Communications about advertising - Assignment Example It is important for an organization to identify potential customers before the introduction of the products based on the nature and characteristics of the products. Appropriate target audience for this particular advertising has been provided below. â€Å"I have a busy daily schedule and I am really concerned about my good health. I have heard about these types of products, but never heard about these newly developed low in fat RTE products. I would like to experience these products, if these are really good and hygienic for my health†. Major objective of this advertisement is to create significant brand awareness of the newly launched RTE products in the minds of the target customers in Singapore. The organization will ensure supreme quality of products in competitive price level. The measurable objective is to breakeven within 6 months and become one of the preferable products in Singapore Market. The particular behavioral outcome of this advertisement is to create awareness about the brand among the people. The organization should try to become leader by create awareness among target audience through this campaign. We should try to ensure high brand recall through this campaign. It is important for an organization to position the brand according to the nature and characteristics of products and target customers. â€Å"To the busy individuals, who have great value for each and every second in your daily life, our RTE products have been tested and resulted as low fat and healthy products within the RTE food industry. You can stay safe and healthy if you consume our products. In addition to this, we will offer these products in economic price level to back your earning level†. – Brand Position Statement. The message would be developed is to choose our RTE products if they want to consume high quality food products in limited time period. Teenagers and young adults are our major target customers. Therefore, we would like to

Sunday, July 28, 2019

Preperation of an evidence based clincal guideline informed by critque Thesis

Preperation of an evidence based clincal guideline informed by critque of relevent evidence - Thesis Example This review considered three types of studies, namely the randomized control trial, a systematic review and a qualitative study. It emerged that, water immersion presented a reduced need for the use of analgesia during labor. Moreover, women felt more confident and in control of the birth process when water immersion was used. However, one of the studies highlighted that there was a higher risk of infection when water immersion was used. The three studies considered in the review presented evidence that water immersion had the potential to reduce the use of analgesia during the first two stages of labor. However, it also highlighted that failure to take precautions regarding the safety of the water may lead to infections in the unborn baby. Evidently, further research concerning this issue is needed. This review considers three different types of studies in a bid to gain the evidence of the potential benefits of using water immersion during the first two stages of labor. A close analysis of the results from each study reveals that water immersion may serve to reduce the pain experienced during labor and hence eliminate the need for spinal analgesia that is normally given to women in labor. Even when there is a need for analgesia, the studies reveal that it is usually limited when using water immersion. There is a need for advanced research in this sector because the available evidence does not give conclusive findings on the rate of infection during water immersion. In the 21st century, water birth has become one of the choices that women make regarding their preferred methods of delivery. There has been an increasing controversy regarding the potential benefits of water birth as well as the new challenges it may pose. This necessitates the presence of a clinical guideline that highlights the critical issues related to water birth (da Silva, de Oliveira, & Nobre, 2009). Notably, it has

Saturday, July 27, 2019

Chemistry Term Paper Example | Topics and Well Written Essays - 1000 words

Chemistry - Term Paper Example Identification by mass sets this element as the third-most abundant element in the universe after elements of hydrogen and helium. Representatively by dry air volume, oxygen forms about 20.9476% (209,460 ppmv) of the atmosphere by volume at the sea level temperatures of 150C; thus, making it the third largest compound. Understanding the composition of oxygen and its molecular composition is essential in its incorporation to further chemical uses given that it is a primary atmospheric industrial gas product. For instance, given that one has 32 grams of oxygen, this will be equivalent to one mole of Oxygen gas while 16 grams of the same would be a representation of Oxygen element. This implies that the molecular mass of Oxygen is 32 grams while its atomic mass is 16 grams. By ratio compared to dry air, Oxygen forms about 23.20% of the atmospheric air by weight and has a boiling point of -182.950C. Oxygen forms about 85% of the earth’s elements such as oceans, and is a component of most minerals and rocks given that 46% of these rocks and minerals comprises of Oxygen. Subsequently, the compound forms about 60% of the human body mass. Oxygen as a chemical compound possess distinct properties such as being colorless, being tasteless and odorless. Oxygen also has the property of being poorly soluble in water. A particular gravity of 1.105 is enough to make oxygen be slightly heavier than air. When the Oxygen is cooled to its boiling point of -1830C, it turns appearance and becomes a transparent, pale blue liquid that has a slightly heavy weight than water. Oxygen as a compound can react with all elements, excluding the inert gases resulting in the formation of oxides through a varied reaction rate (oxidation). Even though oxygen in itself is non-flammable, it enhances the combustion process; thus, enabling all flammable materials to burn vigorously. The use of oxygen in industrial

Friday, July 26, 2019

Case 2 Essay Example | Topics and Well Written Essays - 500 words

Case 2 - Essay Example Eric wanted to avoid a repeat of what had happened in Mexico and China, where projects that were initially planned to take a short time to do ended up taking a lot more time. This was especially the case in India, where a research assignment that was initially planned to take a total of eighteen months, ended up taking three years instead. This was mainly due to company employees like Fred. Fred was unwilling to train the locals and hand over some of the duties and responsibilities to them. The company employees had also shown a tendency of being unable to work effectively, with the district and federal regulations in the various countries that they had been sent to. This created a situation where they ended up taking more time on their various jobs. Eric should tell the HR Vice President all the problems that the company keeps on facing each time they send out expatriates to new countries. This should be done when they have their company meeting. This will help show the seriousness of the matter, especially now that they want to expand into China. China promises to be a more challenging environment and market as compared to all the other countries that the company has set up operations. To drive the point home, he can use the example of Fred Banks to further help make the point more clear. He should also suggest to them the need of creating a more intensive and complete training program for the company employees who were being sent overseas. This would be a total change of the current system. The current system is raising concerns for its not being effective and is being seen by the top management, as a series of â€Å" tell and sell† sessions with no meaningful exchange of insights or even ideas. The program should also learn from the problems facing the current program, where most people did not go through all the sessions. The company should make it a must for everyone undertaking the program to attend all the sessions. Eric should

UNIT 4 INDIVIDUAL PROJECT Essay Example | Topics and Well Written Essays - 500 words

UNIT 4 INDIVIDUAL PROJECT - Essay Example Anti-Abortionists on the other hand agree in unison that it is pretty much in defiance as laid down in the holy books of God to commit such a heinous act like abortion. The rationale that can be provided here is that if at any point in time it was in defiance with the laws as proposed and put forward by God, then it is between the woman under question and her God and she is the one who will be the recipient of chastisement with regards to the abortion decision that she has taken. A number of people are of the view that abortion can threaten a mother’s life and hence should be deemed as illegal right from the onset. Again there are some opinions which suggest that if the mother does not want to have the baby then it would be best to at least give birth to the newborn and give it to some orphan house so that those women who do not have children in their lives can raise their families in accordance. This seems pretty valid since giving a newborn for the sake of adoption is a good route none the less if a family is against the birth and the eventual raise of the baby. This is due to the fact that at times it has been seen that these children suffer immensely as they sit for ages in the orphanages making them look like unwanted guests in this world. Different people raise different opinions but this is true that each one of us has a responsibility towards the society and thus we should be responsible enough of take it. Indeed abortion is a very sensitive topic that has been shown flames during its discussion in different meetings and seminars. Controversy is one thing that is sure to make rounds of these board room meetings and hospital seminars. Then again, choosing whether one should have an abortion or not is pretty much dependent on the family and more so the mother, if not the father as well. This is said so as to make sure that the society does not have to pay for the unwanted and

Thursday, July 25, 2019

Children Essay Example | Topics and Well Written Essays - 1500 words

Children - Essay Example The question now arises that ‘what leads the children to divert from the society’s well treaded path?’ Is it because of the dramatically changing world? Or is because of the free media showing what ever it wants? Children have impressionable minds. From an early age they observe and remember what goes on around them. Sounds and pictures are the two main senses that mould the character of the child from an early stage. Of course the parents and the environment also mould the child’s character, but pictures in television and music are the main contributors to the development of a child in these modern times. [3] The Language The language used for most children targeted channels is getting more and more open. The cartoons like Johnny Bravo among others create that urge among children to attempt or copy the same styles irrespective to which society they belong to. Kid’s drama series show either love or violence which the children are apt to imitate in one form or the other. [2] The article ‘childish thongs’ that appeared in the guardian on Monday March 31st 2003 is also highlighting the points mentioned above. The language in the article is very strict and has a tone of anger complaining about the plight of children as a result of unchecked companies that propagate sex appeal in their products. The article does not blame the children for wearing garments that increase their sex appeal since children are immature and do not understand what they are getting involved in. [1] The Media The ideas about a certain thing are bred in to children from a variety of sources such as TV and movies. Children at their young ages watch and hear the pictures and sounds of the glamorous world which attracts them to follow the lead. This is the magic of the media. Showing explicit or obscene images on TV loosens the devil out of a child's heart and makes the child act in certain manners unacceptable to the society. [4] Music and TV artists like Britney Spears appearing in music videos wearing minimum clothing allowed on TV only appeals to the audience. The viewers world over go wild as the men drool over the sex-appeal involved while the women enact Britney Spears in order to get the same attention from the men. The children watching the video think dressing that way would get them rich and famous and get the desired attention. However these dreams are not always pretty in the real life. The increasing rape cases, sexual harassment and child pornography are some of the results of this trend towards wearing minimum clothes. [1] The role of the media in reaching to this trend is almost 100%. The cultures of one side of the world are shown on the other side, meaning that cultural clashes are bound to occur. Media is free to show whatever they want or tell whatever they want to and when ever there is a ban them, the media come up in arms cursing the government for not giving them media-freedom. Being the leaders of tomorrow, children getting involved in devilish acts can mark our world heading for chaos. Sanity must prevail within media channels to encourage dignity and self respect in children rather than propagating dangerous deeds against the boundaries of the society. [4] The media must aim to show images, documentaries or videos that give a meaning or a moral that the children can learn. Through articles like these, the parents of the children can be given a heads-up warning that their children involved in

Wednesday, July 24, 2019

Performance and Culture - Post Modernism Essay Example | Topics and Well Written Essays - 2500 words

Performance and Culture - Post Modernism - Essay Example Though postmodernism still has the potential to be an effective liberating space for the subjugated, it is seldom used for this end (McGuigan 98). One key aspect of the visual aesthetic of the black community is that of the body. The notions surrounding black hair and its style provide us a contextual framework for analyzing its relation to modernity and postmodernity. One of the mechanisms of modernism is to find an absolute "essence" of its subject, denying all the other experiences that make up a community in the margin (Hutcheon). Within and outside their community, essentialist arguments have been used to fit the entire community in the margin into easy categories. For instance, the natural texture of African-American hair has been used as one of the key visual elements in a system of ethnic signifiers. The first essentialist construction of black hair meant that it was all of the things white hair was not. Instead of being judged for its own inherent qualities, black hair was portrayed to be not good, not beautiful, unmanageable and even uninteresting. As an ethnic signifier, its metonymic qualities were obvious - it als o became the construction of what whiteness was not. This first essentialist argument was not created by the black community, but it was internalized. It is still in use today by individuals inside and outside of the margin that comprises the black community (Hutcheon). This deficiency was addressed by the black power movement during the nineteen sixties, although the method employed was of the modernist tradition. It tried to redefine what â€Å"ideal† meant for those inside and outside the community. The myth of the superiority attached to straightened and processed hair was dismantled and a new signifiers for good black hair was projected – namely the Afros and Caribbean dreadlocks. This new essentialist construction of ideal black hair countered the former one, and thus is strongly tied to it. What resulted was a

Tuesday, July 23, 2019

Corporate culture Essay Example | Topics and Well Written Essays - 1250 words

Corporate culture - Essay Example The goal of the essay is to identify what parts of culture are the most important and why it is useful for managers in order to build a worthwhile long-term corporate strategy and keep competitive edge. Here will be described power, diverse attitudes and beliefs, how to effectively manage people, risk and socialisation. The corporate culture There are several success factors for business if the organisation desires to achieve growth and build high human capital development. First, leadership needs to have a very strong vision of what they want to accomplish. â€Å"They know how to set the direction for the organisation and how to build commitment to follow that direction† (DeVries, 1996, p.491). It is necessary for managers to be transformational, using positive personality and charismatic traits, in order to get employees to model themselves after the leader. They need to push for personal growth and add more value to the human resources role to gain this commitment. However, this cannot be done without setting a cultural tone within the business that provides opportunities for employees to be empowered. If the manager considers culture important, they will develop proper training for this effort and always reinforce how important it is for employees to be focused on mission-related goals. ... Managers should not always keep power at the top levels since this breaks down the effectiveness of attempting to build a positive, unified corporate culture. â€Å"If power lies in the strategic coordination of resources rather than mere possession of them, then a strategic conception of power offers the opportunity for subordinate groups to develop coalitions capable of challenging dominant groups† (Alvesson & Willmott, 2003, p.6). If this is true, then employees will work against senior-level power and control and try to combat it by developing their own factions as they try to gain control in certain key areas. If power only resides at the top layers of the business leadership, then it is not a true culture. It is, instead, a business that maintains very high controls and does not provide workers with much flexibility or give them perceptions of value. A business that operates in this condition would be referred to as a centralised organisation dedicated only to making sur e employees perform as they are expected. Social and psychological factors are dismissed in this type of business and no culture exists at all, only one with a Theory X type of focus where employees are always regulated. This could lead to higher turnover rates or generally dissatisfied employee groups who have little to contribute to a cultural whole. In some business environments overseas, such as Saudi Arabia, managers score high on testing related to Hofstede’s power distance scale. This is due to Muslim beliefs that are traditionalist and are common in Islamic societies (Bjerke & Al-Meer, 1993). Power distance is the level of closeness between management and regular employees.

Monday, July 22, 2019

Positive nonverbal messages Essay Example for Free

Positive nonverbal messages Essay From the way we dress to the way we move, our nonverbal signals can reveal a great deal about our emotions, perceptions and intentions. When a person is talking or listening, he sends continuous messages consciously or unconsciously through his body movements, such as the way he holds his head, the angle at which he hold his body, his movements of limbs and his changing facial expressions. This kind of communication in which no verbal language is used comes under the category of non verbal communication. According to Knapp Hall (2002) non verbal communication refers to communication that is produced by some means other than words, e. g. , eye contact, body language or vocal cues. The significance of nonverbal communication, in establishing interpersonal relationships, is far greater than any one can think of. According to experts, a substantial portion of our communication is nonverbal. On the basis of its effect nonverbal communication can be classified under following three categories. 1. POSITIVE NONVERBAL COMMUNICATION Positive nonverbal messages puts the other person at ease. When a person expresses an open and positive attitude towards the person with whom he is interacting, it creates a supportive and collaborative atmosphere. Use of positive non-verbal communication helps a person to become more effective and successful. It significantly affects the level of interpersonal relationship. It also determines the overall impression people form about a person. There are several types of positive non verbal indicators. For example turning face to the sender, leaning slightly forward towards him indicate that he is interested. , Nodding to express understanding, smiling or touching the person gently are other types of positive non verbal cues. The eye contact is most effective non verbal cue to achieve the goal of gaining someone’s trust. The way one uses his body and limbs, his eyes and face, will have a major influence on how his non verbal messages are perceived. 2. NEGATIVE NONVERBAL COMMUNICATION Sometimes non verbal body movements, gestures and facial expressions generate disinterest distrust. It creates a state of confusion on the part of the receiver. The type of communication which comes under the above category is known as negative nonverbal communication. Negative nonverbal messages hampers collaborative and supportive environment. To ensure effective communication one must avoid giving such type of cues. Staring or gazing at other can create pressure and tension between the receiver and the sender. Negative facial expression, shifty eyes, too much blinking suggest deception Eyebrow muscle draws the eyebrows down and toward the center of the face if someone is annoyed. Talking to someone without maintaining the eye contact is distracting and often interpreted as insulting. If a person keeps talking on phone or keeps working on the computer during the conversation, it shows that he is not interested. 3. NEUTRAL NONVERBAL COMMUNICATION –This is the type of nonverbal communication which have neither positive or negative effect on the receiver. The type of body movements , postures and tone which have neutral effect on the receivers feelings and emotions comes under this category. It is very difficult to label any non verbal cue as neutral. People attach meaning even to a neutral message. During listening one rarely can stay silent for long, silence in some instances may be treated as neutral non verbal communication. If it lasts more than for 5-6 seconds then it turns into a negative cue. Sounds like ‘Mmm’, ‘Ah’ and ‘Hmmm’ when used in a neutral way invite learner to continue talking. CONCLUSION Sending clear nonverbal messages and understanding correctly the message send by someone, largely depends upon the way how you are perceiving the total situation, and the person with whom you are communicating. Your mind set and the environment in which the communication is taking place also determine how you interpret and react to the non verbal messages. Interpretation of the messages depends upon past experiences,feelings, attitude and socio cultural background of the receiver. Communication can be misperceived if the source and the receiver does not share common experiences and common frame of reference. REFERENCES Knapp,M. L Hall, J. A (2002) Non Verbal Communication in Human Interaction, Crawfordsville, IN : Thompson Learning Smith,T. E, Gartin B. C, Murdick, N. L, Hilton,A (2006) : Positive Indicator Of Non Verbal Communication Pearson Allyn Bacon Prentice Hall retrieved on 13th May,2010 Windle,R Warren, S Communication Skills retrieved on 13th May 2010 from http://www. directionservice. org/cadre/section4. cfm

Sunday, July 21, 2019

Effect of Sugar on the Melting Rate of (Coke) Ice Cubes

Effect of Sugar on the Melting Rate of (Coke) Ice Cubes Introduction: There was constant information coming up about sugar lowering the freezing point of ice therefore shortening the melting time of the ice. This experiment will be conducted as hope to solidify research, Coke ice cubes will be used in the experiment; Original coke ice cubs which contain sugar, and Coke zero ice cubes which contain no added sugar. This experiment will provide more reliable information for scientists for real life applications such as melting ice off roads as faster and easier way, clearing snow off roads or to clear ice for room for infrastructure and construction. Aim: To see the effect of sugar on the melting rate of ice cubes (Original coke – sugar, and Coke Zero – no sugar). Hypothesis: The sugar in the Original Coke ice cubes will cause the ice cubes to melt faster than the Coke Zero ice cubes. This is because sugar lowers the freezing point of water/most liquids. Material list: Method: Pour 10mL of Original Coke into a separated/slotted ice cube tray using a pipette and measuring cylinder to make sure that all the ice cubes are the same size (leave the ice trays in the freezer overnight). Pour 10mL Coke Zero into a separated/slotted ice cube tray using a pipette and measuring cylinder to make sure that all the ice cubes are the same size (leave the ice trays in the freezer overnight). Place heat source in front or on top of bench and switch it on. Record room temperature and air temperature before removing ice cubes form the freezer. Place one of each ice cube on a separate plate and start the timer. Time how long it takes for the ice cubes to melt. Take photos of the melting of the ice cubes. Write down results of the experiment including; temperatures and times. Clean out plates and let them dry before repeating the experiment around 8 times or until your results are consistent, reliable and close. Variables: Results: Images: Discussion: I stated in my hypothesis that the Original Coke would melt faster because of its contents; containing sugar whereas, Coke Zero does not. This is experiment was conducted on the basis of the research on what makes ice melts fastest. Substances that dissolve in water lower the freezing point of the solution. This is an example of a colligative property. In this experiment, I investigated whether sugar affected the rate at which ice (cubes) melted. The reason I thought that the Original Coke would melt faster is because it contained lots of sugar and the reason I thought the Coke Zero would melt slower (than Original Coke) is because it has no natural sugar in it but instead it contains artificial sweeteners. On TV or in other countries (because we don’t have ice/snow on the streets in Australia unless you’re in the mountains), trucks are usually seen driving through streets covered with snow or ice, spreading a mixture of sand, gravel and salt on the ice/snow to de-ice the roads (melt the layer of ice/snow on the road). The lowered freezing point because of the poured mixture means that snow and ice can melt even if the weather is supposed to be freezing water. This is an example of freezing point depression (the decreasing of melting point of a substance/molecule). I decided to see if sugar would have the same effect as salt as they are not so different when it comes to their molecular properties. My results supported that my hypothesis and made my research reliable, The Original Coke melted significantly faster than the Coke Zero (as shown in images 4 and 6) . My results were repeated seven* times in order to obtain reliable data. The graph created from the table of results show the average melting times for each type of coke ice cube, it shows that Original Coke melted significantly (almost 300+ seconds in different instances) faster than the Coke Zero. The biggest difficulty I encountered was controlling the temperature of the air, plates and the temperature of the room. I set my experiment up in front of a gas heater in the living room where there were little things which would interfere with my experiment, making sure that each type of ice cube was the 30 centimetres away from the heat source, I began the experiment. Each type of ice cube was placed on the same type of plate at the same time for each repeat of the experiment. The temperatures were measured with 2 types of thermometers (an ordinary scientific grade thermometer and an IR thermometer1) during the experiment and the temperatures fluctuated from between 42oC and 50oC.. However, both types of ice cubes were exposed to the same increase during the experiment so the average melting rate results should not have been affected. The amount by which the freezing point is lowered depends only on the number of molecules dissolved, not on their chemical nature of the substance used because of this, my thoughts changed. Although my prediction2 was correct, I still do not completely know what it was that changed the melting rate of the ice because I do not have scientific grade equipment or a laboratory to conduct a full scale experiment, but I suspect that it may have to do with Original coke having more soluble substances/material than Coke Zero. I could also conduct an experiment to discover the truth behind that theory by testing the evaporation times of each type of Cola. (But that’s for another timeà ¯Ã‚ Ã…  ) Conclusion: My results show that the Original Coke ice cubes melt faster than Coke Zero ice cubes. I suspect that the sugar in Original Coke caused the ice cube to melt faster. However, freezing point depression depends on the amount of molecules dissolved, and not on the chemical nature or make up of the molecules. Therefore, the presence or absence of sugar in the Coke ice cubes may not have been the reason for my different melting rates. Bibliography: NaveC.R. (n.d.). Colligative Properties of Solutions.Colligative Properties of Solutions. Retrieved August 27, 2014, from http://hyperphysics.phy-astr.gsu.edu/hbase/chemical/collig.html OKeeffe, J. (2010, September 19). Why Does Sugar Affect the Freezing Point of Water?.eHow. Retrieved August 27, 2014, from http://www.ehow.com/facts_7194604_sugar-affect-freezing-point-water_.html ThinkQuest. (n.d.).ThinkQuest. Retrieved August 27, 2014, from http://library.thinkquest.org/C006669/data/Chem/colligative/colligative.html?tqskip1=1 Variables in Your Science Fair Project. (n.d.).Variables in Your Science Fair Project. Retrieved August 27, 2014, from http://www.sciencebuddies.org/science-fair-projects/project_variables.shtml *Eight times but I messed up my eighth so I dropped it. 2Prediction based on previous research conducted. 1IR thermometer: I got it from a cousin who had it lying around. It’s not scientific grade, it was bought from Bunnings warehouse.