Wednesday, November 27, 2019

Waxing Judgmental about Judgement

Waxing Judgmental about Judgement Waxing Judgmental about Judgement Waxing Judgmental about Judgement By Maeve Maddox A reader commenting on my post about the difference between discreet and discrete was shocked by the spelling judgement in my definition of discreet (â€Å"Showing discernment or judgement in the guidance of one’s own speech and action†): Maeve, where did you find that definition of discreet â€Å"Judgment† is misspelled! For that reader, spelling the word with an â€Å"e† creates a misspelling. Other readers, commenting on other posts, objected to my use of judgment without the â€Å"e†: The verb change keeps its [e] here to indicate that the [g] is soft, not hard. (That is also why judgement is the correct spelling of this word, no matter what anyone says.) and There isn’t a single instance in English that I can think of with a root word ending in â€Å"g† where â€Å"g† has the â€Å"j† sound. The final â€Å"e† is used to cue in the reader to the correct pronunciation of the soft â€Å"g† sound. Therefore, â€Å"judgment† according to the rules of English phonics would be â€Å"jud-GUH-ment†. Clearly WRONG!!So I’ll continue to engage in pointless arguments with those who quibble with my CORRECT spelling of the word. Strong feelings, these. Like â€Å"could care less† and statements like â€Å"my head literally exploded,† the â€Å"judgment vs judgement† issue evokes passion in many English speakers. The first reader was correct to fault me on spelling judgment as judgement, not because judgement is a â€Å"misspelling,† but because I write these posts in standard American English and spelling judgment with an â€Å"e† is contrary to American spelling convention. The other two readers do not indicate what standard dialect they speak. I’m guessing that they are American speakers because they resort to the argument about the â€Å"e† being necessary to the correct pronunciation of the word. British speakers would probably defend the judgement spelling simply on the grounds that it is the preferred British spelling. The suggestion that the spelling judgment would â€Å"according to the rules of English phonics† produce the rendering â€Å"jud-GUH-ment† is preposterous. The word is formed by adding a suffix to the root word: judge+ment. Unlike the â€Å"e† we use to maintain the /j/ sound in words like rage, Marge, and usage, the â€Å"e† in judge is not necessary to signal a /j/ pronunciation. The letter combination dge is a phonogram in its own right, used to represent the /j/ sound. Dropping the â€Å"e† from it is not common, but I cannot imagine that any native speaker would attempt to pronounce dg as anything but /j/. Changeable does need the â€Å"e† to soften the â€Å"g†; judgment, abridgment, and lodgment do not. Look up judgement and lodgement in the OED and you will find the the spellings judgment and lodgment dignified as alternative spellings. (Abridgement is the only spelling given for that word.) According to the OED, [Judgement] is found in spellings with -dgm- from the early 16th century, and by the late 17th century judgment had become the prevailing spelling, although judgement was still commonly found. Kersey (1702) is an unusually early example of a dictionary in which the headword form was given as judgement . During the 19th century the form judgement gained in frequency in British contexts, and is now the usual spelling in general British use, but judgment has remained the standard spelling in British legal contexts when used to refer to a judicial decision, as well as in U.S. usage. In sum, there’s no reason American speakers can’t choose to put an â€Å"e† in judgment if they wish, but there’s nothing historically, phonetically, or morally superior in doing so. And if they’re writing for publication, a U.S. editor would surely correct it. Related posts: Judgement or Judgment? The Difference Between â€Å"Discreet† and â€Å"Discrete† Want to improve your English in five minutes a day? Get a subscription and start receiving our writing tips and exercises daily! Keep learning! Browse the Spelling category, check our popular posts, or choose a related post below:Direct and Indirect Objects30 Baseball Idioms5 Keys to Better Sentence Flow

Saturday, November 23, 2019

Definition and Discussion of Enlightenment Rhetoric

Definition and Discussion of Enlightenment Rhetoric The expression  Enlightenment rhetoric refers to the study and practice of rhetoric from the mid-seventeenth century to the early part of the nineteenth century. Influential rhetorical works from this period include George Campbells Philosophy of Rhetoric, first published in 1776, and Hugh Blairs Lectures on Rhetoric and Belles Lettres, first published in 1783. George Campbell, who lived from 1719 to 1796, was a Scottish minister, theologian, and philosopher of rhetoric. Hugh Blair, who lived from 1718 to 1800, was a Scottish minister, teacher, editor, and rhetorician. Campbell and Blair are just two of the many important figures associated with the Scottish Enlightenment. As Winifred Bryan Horner notes in the Encyclopedia of Rhetoric and Composition, Scottish rhetoric in the 18th century was broadly influential, especially in the formation of the North American composition course as well as in the development of 19th- and 20th-century rhetorical theory and pedagogy. 18th-Century Era of Enlightenment Rhetoric Essays written on rhetoric and style in the 1700s include Of Eloquence by Oliver Goldsmith and Of Simplicity and Refinement in Writing by David Hume. On Conciseness of Style in Writing and Conversation by Vicesimus Knox and Samuel Johnson on the Bugbear Style were also produced during this era. Periods of Western Rhetoric Western rhetoric can be divided into distinct categories: classical rhetoric, medieval rhetoric, Renaissance rhetoric, 19th-century rhetoric, and new rhetoric(s). Bacon and Locke Thomas P. Miller, Eighteenth-Century Rhetoric British advocates of enlightenment grudgingly accepted that while logic could inform the reason, rhetoric was necessary to rouse the will to action. As propounded in [Francis] Bacons Advancement of Learning (1605), this model of the mental faculties established the general frame of reference for efforts to define rhetoric according to the workings of the individual consciousness...Like such successors as [John] Locke, Bacon was a practicing rhetor active in the politics of his time, and his practical experience led him to recognize that rhetoric was an inevitable part of civic life. Although Lockes Essay Concerning Human Understanding (1690) criticized rhetoric for exploiting the artifices of language to promote factional divisions, Locke himself had lectured on rhetoric at Oxford in 1663, responding to the popular interest in the powers of persuasion that has overcome philosophical reservations about rhetoric in periods of political change. Overview of Rhetoric in the Enlightenment Patricia Bizzell and Bruce Herzberg, The Rhetorical Tradition: Readings From Classic Times to the Present Toward the end of the 17th century, traditional rhetoric came to be closely associated with the genres of history, poetry, and literary criticism, the so-called belles lettres - a connection that persisted well into the 19th century. Before the end of the 17th century, however, traditional rhetoric came under attack by adherents of the new science, who claimed that rhetoric obscured the truth by encouraging the use of ornamented rather than plain, direct language...The call for a plain style, taken up by church leaders and influential writers, made perspicuity, or clarity, a watchword in discussions of ideal style during the ensuing centuries. An even more profound and direct influence on rhetoric at the beginning of the 17th century was Francis Bacons theory of psychology...It was not until the middle of the 18th century, however, that a complete psychological or epistemological theory of rhetoric arose, one that focused on appealing to the mental faculties in order to persuade...the elocution movement, which focused on delivery, began early in the 18th century and lasted through the 19th. Lord Chesterfield on the Art of Speaking Lord Chesterfield (Philip Dormer Stanhope), letter to his son Let us return to oratory, or the art of speaking well; which should never be entirely out of your thoughts, since it is so useful in every part of life, and so absolutely necessary in most. A man can make no figure without it, in parliament, in the church, or in the law; and even in common conversation, a man that has acquired an easy and habitual eloquence, who speaks properly and accurately, will have a great advantage over those who speak incorrectly and inelegantly. The business of oratory, as I have told you before, is to persuade people; and you easily feel, that to please people is a great step towards persuading them. You must then, consequently, be sensible how advantageous it is for a man, who speaks in public, whether it be in parliament, in the pulpit, or at the bar (that is, in the courts of law), to please his hearers so much as to gain their attention; which he can never do without the help of oratory. It is not enough to speak the language he speaks in, in its utmost purity, and according to the rules of grammar, but he must speak it elegantly, that is, he must choose the best and most expressive words, and put them in the best order. He should likewise adorn what he says by proper metaphors, similes, and other figures of rhetoric; and he should enliven it, if he can, by quick and sprightly turns of wit. Philosophy of Rhetoric Jeffrey M. Suderman, Orthodoxy and Enlightenment: George Campbell in the Eighteenth Century Modern rhetoricians agree that [George Campbells] Philosophy of Rhetoric pointed the way to the new country, in which the study of human nature would become the foundation of the oratorical arts. A leading historian of British rhetoric has called this work the most important rhetorical text to emerge from the 18th century, and a considerable number of dissertations and articles in specialized journals have eked out the details of Campbells contribution to modern rhetorical theory. Alexander Broadie, The Scottish Enlightenment Reader One cannot go far into rhetoric without encountering the concept of a faculty of the mind, for in any rhetorical exercise the faculties of intellect, imagination, emotion (or passion), and will are exercised. It is therefore natural that George Campbell attends to them in The Philosophy of Rhetoric. These four faculties are appropriately ordered in the above way in rhetorical studies, for the orator first has an idea, whose location is the intellect. By an act of imagination, the idea is then expressed in suitable words. These words produce a response in the form of an emotion in the audience, and the emotion inclines the audience to will the acts that the orator has in mind for them. Arthur E. Walzer, George Campbell: Rhetoric in the Age of Enlightenment While scholars have attended to the 18th-century influences on Campbells work, Campbells debt to the ancient rhetoricians has received less attention. Campbell learned a great deal from the rhetorical tradition and is very much a product of it. Quintilians Institutes of Oratory is the most comprehensive embodiment of classical rhetoric ever written, and Campbell apparently regarded this work with a respect that bordered on reverence. Although the Philosophy of Rhetoric is often presented as paradigmatic of a new rhetoric, Campbell did not intend to challenge Quintilian. Quite the contrary: he sees his work as confirmation of Quintilians view, believing that the psychological insights of 18th-century empiricism would only deepen our appreciation for the classical rhetorical tradition. Lectures on Rhetoric and Belles Lettres James A. Herrick, The History and Theory of Rhetoric [Hugh] Blair defines style as the peculiar manner in which a man expresses his conceptions, by means of language. Thus, style is for Blair a very broad category of concern. Moreover, style is related to ones manner of thinking. Thus, when we are examining an authors composition, it is, in many cases, extremely difficult to separate the style from the sentiment. Blair was apparently of the opinion, then, that ones style - ones manner of linguistic expression - provided evidence of how one thought. Practical matters..are at the heart of the study of style for Blair. Rhetoric seeks to make a point persuasively. Thus, rhetorical style must attract an audience and present a case clearly. Of perspicuity, or clarity, Blair writes that there is no concern more central to style. After all, if clarity is lacking in a message, all is lost. Claiming that your subject is difficult is no excuse for lack of clarity, according to Blair: if you cant explain a difficult subject clearly, you probably dont understand it...Much of Blairs counsel to his young readers includes such reminders as any words, which do not add some importance to the meaning of a sentence, always spoil it. Winifred Bryan Horner, Eighteenth-Century Rhetoric Blairs Lectures on Rhetoric and Belles Lettres was adopted at Brown in 1783, at Yale in 1785, at Harvard in 1788, and by the end of the century was the standard text at most American colleges...Blairs concept of taste, an important doctrine of the 18th century, was adopted worldwide in the English-speaking countries. Taste was considered an inborn quality that could be improved through cultivation and study. This concept found a ready acceptance, particularly in the provinces of Scotland and North America, where improvement became a basic tenet, and beauty and good were closely connected. The study of English literature spread as rhetoric turned from a generative to an interpretive study. Finally, rhetoric and criticism became synonymous, and both became sciences with English literature as the observable physical data. Sources Bacon, Francis. Advancement of Learning. Paperback, CreateSpace Independent Publishing Platform, September 11, 2017. Bizzell, Patricia. The Rhetorical Tradition: Readings From Classic Times to the Present. Bruce Herzberg, Second Printing Edition, Bedford/St. Martins, February 1990. Blair, Hugh. Lectures on Rhetoric and Belles Lettres, Paperback, BiblioBazaar, July 10, 2009. Broadie, Alexander. The Scottish Enlightenment Reader. Canongate Classic, Paperback, Canongate UK, June 1, 1999. Campbell, George. The Philosophy of Rhetoric, Paperback, University of Michigan Library, January 1, 1838. Goldsmith, Oliver. The Bee: A Collection of Essays. Kindle Edition, HardPress, July 10, 2018. Herrick, James A. The History and Theory of Rhetoric. 6th Edition, Routledge, September 28, 2017. Hume, David. Essay XX: of Simplicity and Refinement in Writing. Online Library of Liberty, 2019. Johnson, Samuel. The Works of Samuel Johnson, LL. D.: An essay on the life and genius of Samuel Johnson. G. Dearborn, 1837. Knox, Vicesimus. Knoxs Essays, Volume 22. J.F. Dove, 1827. Sloane, Thomas O. (Editor). Encyclopedia of Rhetoric. v. 1, Oxford University Press, August 2, 2001. Stanhope, Philip Dormer Earl of Chesterfield. Letters to His Son: On the Fine Art of Becoming a Man of the World and a Gentleman. Volume 2, M. W. Dunne, 1901. Suderman, Jeffrey M. Orthodoxy and Enlightenment: George Campbell in the Eighteenth Century. McGill-Queens Studies in the Hist of Id, 1st Edition, McGill-Queens University Press, October 16, 2001. Various. Encyclopedia of Rhetoric and Composition. Theresa Jarnagin Enos (Editor), 1st Edition, Routledge, March 19, 2010. Various. Encyclopedia of Rhetoric and Composition: Communication from Ancient Times to the Information Age. Theresa Jarnagin Enos (Editor), 1st Edition, Routledge, March 19, 2010. Walzer, Arthur E. George Campbell: Rhetoric in the Age of Enlightenment. Rhetoric in the Modern Era, Southern Illinois University Press, October 10, 2002.

Thursday, November 21, 2019

Analysis of Vast Fire Erupts Article Example | Topics and Well Written Essays - 500 words

Analysis of Vast Fire Erupts - Article Example The emergency resources used in this accident were the HAZMAT, law enforcement and fire and emergency medical services (EMS). This implies that the US government has instituted regulations regarding the transportation of oil resources across the country. As a result, the transporters ought to follow the guidelines to avoid the occurrence of similar accidents in the future. This is after the prevalence of train accidents in Canada and North America, in which 100-car train overturned, killing people (Kohl, 2015). The other resource in place for the accident was the EMS that was introduced to help the injured victims recuperate. These comprised of ambulances and health practitioners who set up emergency facilities to attend to the victims that had minor injuries. There were also local resources from the nearby towns that caught fire from the eruption. The local resources comprised of the first aiders and residents who came to assist in the management of the fire. The intangible factors that affected disaster response when the fire erupted included coordination with other entities, the scope of operations and time. The coordination between the profit and governmental agencies was slow because the incident took place at a random speed. This forced the coordinators to undertake hasty decisions in order to stop the spread of fire to other distant places. It is also apparent that the scope of operations was not easy to manage since the fire spread to the nearby towns (Kohl, 2015). Considering this, it was difficult to accommodate the fire since the casualty was all over the region. The firefighters and the first aiders could not come up with a timely response team with management the fire erupted. Time was also another intangible factor that affected disaster response since the fire spread at a high speed to the neighborhoods, injuring numerous residents.

Wednesday, November 20, 2019

Compare how the Union and the Confederacy represented their causes Essay

Compare how the Union and the Confederacy represented their causes. What were their respective ideas of freedom - Essay Example imary cause of the American civil war that saw a massive loss of life and destruction of property, through efforts of separation on one hand and unity on the other (Foner, pp. 49-61). In an effort to understand the American civil war and the issue of slavery, this paper will the union and the confederacy through a comparison of how the two factions represented their course before as well as during the civil war. Additionally, the paper will analyze the ideas that both the unionists as well as the Confederacy had on freedom. The southern and the northern sections of the United States were economically developed along different lines. The southern states were predominantly agrarian states with agriculture being the main economic activity while the northern states turned to industrialization. Due to differences in the economic system of the two sections, different political and social structures developed which led to disagreement among the politicians of the southern and the northern sections on several issues such as tariffs, international improvements and taxation. The differences resulted to the civil war where the Confederates and Unionists tasseled over the issue of slavery as one of their main course of the war. According to the Confederates, slavery was a traditional institution in their social culture and a very significant one in the realization of economic benefit for the South. At the beginning of the civil war, the south had about four million slaves thus the idea of freedom of slaves as proposed by the unionist would interfere with the farming activities of the south. In support of their course of the need for slavery abolition, the unionist pointed at the need to hire slaves and not own them a move that was rejected by the South resulting in the civil war (Foner, pp. 45-53). States’ rights was another are where the opinions of the unionists and the Confederates differed. States’ right was the struggle between the states and the federal

Sunday, November 17, 2019

Women and Numbers by Teri Perl Essay Example for Free

Women and Numbers by Teri Perl Essay For many years, society has presented women to be sweet and man to be tough. Many have encouraged sexist depiction of the sexual category. In addition, this has led to typecasts asserting that girls or women are too emotional and too soft for math and science careers. This is a book that presents women biographies from the nineteenth and twentieth centuries who had an interest in the mathematics subject and they pursued their interests. Different chapters in this book discuss different mathematical actions. A very simple book for the upper-elementary and middle school grades that brings to life the stories of mathematician women from the 19th and 20th centuries. Each biography is followed by a discovery activity. Example, in one of Mary Booles numerous accomplishments she staggered into the creation of string art; the associated discovery activity shows how students can create their own string art designs. The goal of the editor is commendable: to hearten more girls into mathematics and to ignite interest for the field in all students. The write-ups are a pleasure to read. They each give a very individual and encircling picture of the whole woman as mathematician, teacher, mother, wife, or partner. In each, it exemplifies the path they followed, not just career wise but also personally. The impediments of gender and racial prejudice that some of the women faced in following a mathematical career are brilliantly portrayed. An example is Lenore Blum who was not accepted to MIT for her undergraduate degree because there were only 20 dormitory beds available for women. Ideas from the book Each womans mathematical contributions are explained in a language that are easily understandable by a high school or college student interested in what a mathematics career may be like. The three things that all these women had that they excelled in is research, teaching, and service. Research They explored different teaching methods that would be easier to understand and make mathematical solving simpler. With this in mind they attracted the female gender to there classrooms who excelled in the mathematics fields. Teaching Most of the women mentioned in this book climbed to positions such as head of department chair and a good number were involved in developing policies for mathematics departments. Majority of them were supporters for women, blacks, minorities of any kind. Unambiguously, one is left with the certainty that women have done, can do, and will continue to do mathematics. Service Though most of the women were very successful they had a common thread running through the stories of these women, which was they doubted themselves. The service they provided as mathematicians was impeccable despite having to deal with family issues, social stigma, and several other factors that were against them as mathematician women. Themes used Since mathematics is a hard subject to grasp, teaching using a thematic method is a great way to cover a range of topics associated to a particular theme. In this book Women and numbers: Lives of Women Mathematicians plus Discovery Activities by Teri Perl, mentions several themes used by the different women mathematicians. Abstract Algebra An example is Emmy who is well known for being an abstract algebraist. Her focus was on differential and algebraic invariants; the theory of mathematical rings; and non-commutative algebra, linear transformations, and commutative number fields. The main goal of this area is to demonstrate that an invariant (terms that remain unvarying under a group of alteration) can be written as the sum of squares of other numbers. It also wants to show that any two invariants remain invariant. Model theory and differential fields In this theme of model theory and differential fields (logic and algebra), is a theory of calculation and convolution over the real numbers, has focuses on amalgamation of seemingly distinct areas. Sine Sonya Kovalevsky developed this theme one night as she was studying under the covers of her blanket, because the father did not approve her interest in algebra and geometry. To make logic of some of the derivations, she alternated a chord for the mysterious sine, and everything made sense for small angles. Controversies in math Arguments over the technique mathematics is taught and presented in textbooks will continue as long as schools and teachers have the aptitude to choose their own curricula and teaching attitude. Although there are many variables that influence the success of a student, the main influence is the teacher. Depending on how well the teacher formulates the method to use on teaching mathematics will depend on how fast the students will grasp the information. In this book, the only controversy that is on the spotlight is the issue of gender and mathematics. Since the beginning of times, the female gender has been considered to be weaker than the male counterpart and it is not different in the mathematics world. Therefore, every theory that the female gender formulated had to be questioned twice and was criticized before it became published. Conclusion The result is a valuable book for and about women in mathematics at a level appropriate for high school and early college students that celebrates the variety present in the community of women mathematicians. My opinion might be biased being that am a woman, but the book presented challenges that women go through when they are treated as minority when it comes to doing certain things. This book was an encouragement to the girls in their time when gender really mattered in the society and girls were considered inferior to the male gender. The high school girls who believed that math was not for the female gender could now relate to the five women and relate to them. In addition, this has been discussed in the book, how the number of girls doing mathematics increased and they all did well despite what society expected of them. The 9 women were a role model to the high school students especially the female gender. References Perl, T,. (1993). Women and Numbers: Lives of Women Mathematicians plus Discovery Activities. San Carlos, CA: Wide World Publishing/Tetra.

Friday, November 15, 2019

Dell Company Essay -- Case Study Business Essays, solution

Dell Company The Company was founded in 1984 by Michael Dell, now the computer industry's longest-tenured chief executive officer, on a simple concept: that by selling personal computer systems directly to customers, Dell could best understand their needs, and provide the most effective computing solutions to meet those needs. Dell Computer's mission statement is: "Dell's mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve. In doing so, Dell will meet customer expectations of: †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Highest quality †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Leading technology †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Competitive pricing †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Individual and company accountability †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Best-in-class service and support †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Flexible customization capability †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Superior corporate citizenship †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Financial stability" Dell’s target market consists of large corporate accounts, medium and small businesses, and the consumer business. Dell has set out to satisfy each different customer segment through its Direct Model. In order to continue being successful, Dell has to make sure that it produces the right PCs that would be satisfying to customers, and take advantage of the opportunities that are available. Focusing on the laptop industry, if Dell wants to produce a next generation laptop platform that will carry its business in the future, it should look at today’s trends in the industry and how they could impact the next generation laptop.   Ã‚  Ã‚  Ã‚  Ã‚  Mobility is increasingly influencing the world and markets that Dell will be operating in. Therefore, the implication associated with this trend is that the laptop that Dell would produce should be lighter and smaller.   Ã‚  Ã‚  Ã‚  Ã‚  The internet is becoming a necessity in people’s everyday life. Because of this trend, and the impact of mobility at the same time, wireless internet would be a potential demand.   Ã‚  Ã‚  Ã‚  Ã‚  Moore’s Law: it has been observed that laptops and PCs in general are becoming cheaper, smaller and faster, with CPU performance doubling every 18 months. This is an affect of people’s demand for continuous improvement and innovation.   Ã‚  Ã‚  Ã‚  Ã‚  People today are using their computers for a broad range of activities (digital cameras, MP3 players, music, DVDs, etc†¦)   Ã‚  Ã‚  Ã‚  Ã‚  The growth in the economy has been observed on a worldwide scale. It increases demand for productivity, therefore impacti... ...ormance, this might be a threat in the future. -  Ã‚  Ã‚  Ã‚  Ã‚  Intensity of Rivalry. As performance increases, differentiation between brand names might decrease. Dell’s rivals are finding ways to increase their market share by replicating some of dell’s advantages. For example, IBM recognize the advantages of direct distribution and launched initiatives to expand its own direct sales. Compaq saw the advantage of reducing inventory, and therefore took initiatives to do so. -  Ã‚  Ã‚  Ã‚  Ã‚  PDAs replacing laptops. Whether this is a threat or not is still unknown. If the case was that PDAs substitute laptops, it would be a threat to Dell’s laptop business, but not to the entire Company if Dell keeps improving in the production of PDAs. To conclude, in order for Dell to compete efficiently in the laptop industry in the future, it needs to take advantage of all of the above opportunities. Consumers are becoming increasingly more demanding and price-sensitive. The next generation laptop must be consistent with the relevant trends affecting the industry today. If Dell succeeds in its attempt to make a product that fits the trends, it will probably still remain in its leading position in the future.

Tuesday, November 12, 2019

Prepared Remarks of President Barack Obama: Back to School Event

On the 8th of September 2009, President Barack Obama held a speech at Wakefield High School in Arlington, Virginia, in which he stressed the importance of education. The speech was broadcasted nationally and students were tuning in all across America, kindergarten through 12th grade. His speech makes it very clear that you simply cannot quit school and skip classes because â€Å"you’re not just quitting on yourself, you’re quitting on your country†.President Obama would like to motivate all the students who were listening and that feeling of importance, which the sentence above is showing, might be the exact motivator for that to happen. This paper will analyse and comment on the speech and focus on the way President Obama addresses his audience. The composition of the speech is pretty much straightforward and not problematic nor complex. It is started by a short presentation followed by the message of the speech, well-documented with different arguments which su pport each part of the message.It ends with a short summary which sums it all up. This is a necessity given the fact that the audience is – as mentioned – students of all age. His language is very easy to understand and he doesn’t use neither imagery language nor hypotactic sentence structure where he referrers to something that isn’t mentioned. If this wasn’t the case, large parts of the audience might not understand the message the speech is trying to show, and the speech would be useless for them.Since the audience is a group of students – large amount in a small age – he tries to make himself likeable. This is seen in the anecdote about his own childhood and hard upbringing. Throughout the speech, President Obama takes great use of pathos as a persuasion mean which means that he appeals to both emotions and feelings: â€Å"And even when you’re struggling, even when you’re discouraged, and you feel like other people have given up on you – don’t ever give up yourself. , President Obama is using pathos as the main way of persuasion since people are more likely to agree when they’re emotional. There are, however, several places where he appeals to ethos by expressing his own equality to the rest of the audience: â€Å"[†¦] how’s everybody doing today? †, as he opens the speech in this way, he sets the scene and tries to get rid of his authority as the most powerful man in the world since no one likes to be talked down to. President Obama mentions all the different grades of the same reason; he doesn’t want to talk down to them.President Obamas main point is that all students have to work hard in order to reach success and get a good education. Education is the only â€Å"real† way out of poverty, unemployment and trouble. His argument for this statement is that without an education and hard work, you can’t be something in life; jobs and money doesn’t come from nothing, even though several Hollywood-movies and TV-series might express that. Furthermore, he stresses the importance of responsibility.Not only for your own actions, but also for the responsibility your teachers should to inspire you, your family to support you and make sure you stay on track, and the government’s responsibility for setting high standards and provide whatever it takes to raise the bar for educational standards. However, all of this doesn’t mean much if you don’t take the responsibility of yourself and your education. He describes how every single one of us has something to contribute: â€Å"Every single one of you has something to offer†.Hereafter he even gives several examples of opportunities which might occur for someone who has found her/his hidden talent. This also referrers to the â€Å"don’t quit, don’t skip, stay in school† message he’s trying to embrace. The next part of the speech is once again used to make President Obama identifiable. He knows how hard life can be, since he himself had to break the negative heritage; his parents didn’t have an college education and didn’t have much, however, â€Å"That’s no excuse for not trying. †, he says. There is, in fact no real excuse for quitting school.He even mentions the American Dream in his speech which is based on the belief that everyone is their own happiness and future. He mentions 3 different people, who have been struggling; nevertheless, their future seems to be bright after their hard work! This is yet another motivator and proof for the people who think their background and personal issues sets them behind. Barack Obama uses a lot of different rhetorical techniques in order to create an environment in which his young audience feels comfortable in; furthermore, it makes his argumentation a lot more convincing.In lines 164-165 he keeps repeating â€Å"I expect [à ¢â‚¬ ¦]†, which sets the bars for the upcoming year. I believe he does this because he has an authority. As much as he tries to hide it, he also uses it. If it was a general John Doe who said â€Å"I expect this and that from you†, what purpose would it have? The audience wouldn’t listen! You could say that Barack Obama is a role model for a lot of people – if not a whole nation: he’s the first black president and worked his way up from nothing. President Obama is rying to make the distance between him – and his authority – and the audience as small as possible by making a lot of comparisons and relations. The words â€Å"I get it† and â€Å"I know† is not put there for no reason. By decreasing the gap between him and the audience, his authority is more in the background, and he is now a person whom you can relate to, and not the most powerful man on the world. In America, national sentiment isn’t very uncommon, an d the responsibility which a lot of people feel toward their country is a mean to motivate people.Therefore, the argument: â€Å"you’re not just quitting on yourself, you’re quitting on your country† is one powerful motivator. I feel that the speech is indeed influenced by American thinking, however, it all makes sense; even in my head. He stresses the importance of education, and that is something each and every country has a necessity to do; perhaps he has found the way to actually communicate the message? ——————————————– [ 1 ]. line 65 [ 2 ]. line 147-149 [ 3 ]. lines 36-37 [ 4 ]. lines 92-107 ï » ¿Prepared Remarks of President Barack Obama: Back to school Event One of the most important and discussed topics in politics has always been education because of its decisive role in society. Education is the key stone for the generations to come and well educated citizens are a necessity for a successful society in the 21st century. Politicians also make education a high priority because they know it is where votes can be drawn. A politician who also is concerned about the matter of education is President Barrack Obama. And in his speech â€Å"Prepared Remarks of President Barack Obama: Back to School Event† held in Arlington, Virginia on September 8, 2009, he addresses to the Americans students the importance of education and emphasizes that the responsibility to do well in school lies with the students themselves.This is a responsibility that they have to meet, not only for their own sake but for the sake of their country. President Obama emphasizes the importance of education and self-responsibility to children from kindergarten to 12th grade. Children at that age can be difficult to address to, especially with such a big size of group, so Obama must use various approaches to make it possible. He talks to them as an equal so young audience can identify with him and not only see him as the President. He uses a simple and informal language with many repetitions and examples they can relate to. He starts out by saying â€Å"Hello everyone – how’s everybody doing today?†(Page 1, line 1). He speaks directly to the audience to get their attention.He needs the attention from the children and hold on them to get through with his message. He does that by gaining their respect for him and shows that he sincerely cares about them. In the beginning of the speech Obama tells about his story from when he was young. How he was raised by his mother who did not had any money to take him to school, so she had to give him lessons at home at 4:30 in the morning. He also mentions things he did he is not proud of th at got him in troubles. Then Obama shares and opens up about his personal stories, he uses ethos in his arguments to increase his reliability with the audience. It makes it easier for Obama to get through with his message when the people he talks to have his respect.Obama starts stressing his message after he has achieved the audience’s attention. Obama has two main messages in his speech. The first one is that the self-responsibility of the education lies with the student. Maybe the  parents and the teachers also have some responsibility for the student, but it all comes the student â€Å"none of it will matter unless all of you fulfill your responsibilities†(Page 2, line 30). The students will not have everything served for them; it is their turn to take action and take responsibility for their choices. The second one is that the students also have a responsibility for the nation. The nation depends on the students to get a well education.The future of the nation l ies with the students to be a functional part of the US society so the nation can operate and compete â€Å"What you’re learning in school today will determine whether we as a nation can meet our greatest challenges in the future.†(Page 2, lines 52-54). Obama is addressing to the students patriotic American inside them. Most American is raised to be patriotic and Obama knows hot to make use of it. Everybody wants to be a part of something that has an influence on the nation, and every student has the responsibility to their nation â€Å"We need every single one of you to develop your talents, skills and intellect †¦ If you don’t do that – if you quit on school – you’re not just quitting on yourself, you’re quitting on your country.†(Page 2, lines 62-64).Obama begins to speak about how hard work is the most important key to success. Everybody has the opportunity to succeed. Here he indirectly refers to the American Dream; w ith hard work you can accomplish everything. â€Å"Where you are right now doesn’t have to determine where you’ll end up. No one’s written your destiny for you. Here in America, you write your own destiny. You make your own future.†(Page 3, lines 88-90).He uses himself and Michelle Obama, the first lady, while using pathos as examples of people who started from the button with bad conditions and build up to become successful. He comes up with three other cases than himself:  Ã¢â‚¬Å"Jazmin, Andoni and Shantell aren’t any different from any of you. They faced challenges in their lives just like you do. But they refused to give up. They chose to take responsibility for their education and set goals for themselves. And i expect all of you to do the same†(Page 4, lines 105-107)Obama uses the sponsorship effect to create ethos. He also uses Michael Jordan’s and J. K. Rowling’s story to get it out that you cannot succeed without fail ing. Obama uses persons who are idol to many so they get inspired to try to accomplish the same success. He wants the students to understand that if they want to be successful, they need to set goals for themselves and take responsibility for their education for that to happen. Throughout the speech, Obama uses a number of different strategies to affect the broad group of audience. By use concrete example they can relate to with a language everybody is able to understand, he inspires and motivates the young people who is the future of the USA.

Sunday, November 10, 2019

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

Friday, November 8, 2019

Climate Change Caused by Human Essays

Climate Change Caused by Human Essays Climate Change Caused by Human Essay Climate Change Caused by Human Essay Examine the role of one human activity in causing climate change With the rapid development of contemporary society, the balance between human and the nature has been destroyed. The increase of globally averaged temperature on the earth’s surface has occurred over the past century. Thus, climate problems have been the initial international issue to be handled. Industrial production is one of human activities causing climate change. Firstly, this essay will analyze how carbon dioxide and small carbon particles lead to climate change. Secondly, this essay will present the cooling effect of Feron on global temperature. Finally, this essay will discuss how deforestation in expanding industrial land changes climate. The combustion of fossil fuels is inevitable in industrial production, because it provides extreme high temperature and continuous heat. It is the direct contributor to climate changes by emitting large amounts of greenhouse gases, such as carbon dioxide, methane, sulfur dioxide and nitrogen dioxide. The concentration of carbon dioxide has increased since industrial revolution. In the past ten years, the situation has deteriorated, as the increase in the concentration has become far quicker than previous predictions (Adam, 2007). The majority of carbon dioxide emission results from fossil fuels. Due to the increasing atmospheric concentration of carbon dioxide, more sun energy is absorbed and trapped in the atmosphere, enhancing greenhouse effect (NDPI, 2008). Not only greenhouse gases but also carbon particles, consisting of heavy smoke which is produced by burning fossil fuels, are responsible for climate change. These particles gather in clouds, increasing the density of the atmosphere, which causes sun heat radiation be absorbed and trapped inside the earth without being released. With less heat reflecting back to the space, negative impacts on earth’s warming are amplifyed. Consequently, burning fossil fuels in industrial production is a major cause of climate change. Freon, used as refrigerant in some industrial equipment, is another greenhouse gas that contributes to climate change. This gas will corrode ozone layer, which helps to prevent ultraviolet rays from reaching the Earth, by several chemical actions; whereas the gas itself plays the role of catalyst, which means it will not reduce when decomposing ozone. If the earth is exposed to excessive ultraviolet rays, humans will suffer from skin diseases and the ecological environment will be under a dangerous condition. The news said that both Antarctic and Arctic sky had holes and the holes were expanding. It is a warning that requires effective measurements to reduce the release of Freon. Contrary to general perspective, the depletion of ozone has a net effect on cooling the Earth’s surface instead of warming it (Hamgurg, 1997). However, this greenhouse gas is still responsible for climate change. In order to enlarge factories, people require more flat land, leading to deforestation, which is another cause of climate change in industrial production. Thousands of forests are being cut down every year, posing a serious problem that destroying the balance between carbon and oxygen to the nature. If the area of forests continue to reduce, extra carbon dioxide cannot be absorbed and not enough oxygen can be produced, which means that the nature will lose the capability of adjusting the composition of atmosphere. Without the proper percent of oxygen in the atmosphere, various plants will be unable to survive, resulting in the increasingly severe destruction of the carbon and oxygen balance. Eventually, this negative cycle in the nature enhances climate change. In conclusion, industrial development plays a vital role in climate change. The emission of Feron erodes ozone layers, which cools the temperature; the combustion of fossil fuels in order to gain extreme high temperature and provide continuous heat, as well as deforestation which creates more space for factories, increase the concentration of carbon dioxide in the atmosphere, which is a significant cause of the warmer climate. Reference: Adam, D. (2007) Carbon output rising faster than forest, say study. The Guardian online. Available at: guardian. co. k/environment/2007/oct/23/climatechange. canbonemission (Access 17 January 2011) Hamburg, S. R. et al. (1997) What Human Activities Contribute to Climat Change? Washington DC: United Environment Programme-World Meteorological Organization. Available from: gcrio. org/ipcc/qa/06. html (Accessed 17 January 2011 ) NSW Department of Primary Industries (2008), What is climate change? Available from: dpi. nsw. gov. au/research/topics/climate-change/cause (Accessed 17 January 2011)

Tuesday, November 5, 2019

How to Organize Your Classroom Files

How to Organize Your Classroom Files Its a challenge to think of a profession that involves more paper than teaching. Whether its lesson plans, handouts, flyers from the office, schedules or an infinity of other types of papers, teachers juggle, shuffle, search for, file and pass out enough papers on a daily basis to get any environmentalist up in arms. Invest in a File Cabinet So, how can teachers win the daily battles in this never-ending paper war? Theres only way to win, and thats through down and dirty organization. One of the most important ways to get organized is through a properly categorized and maintained file cabinet. Usually, a file cabinet will come with your classroom. If not, ask the custodian if he or she can find one for you through the district office. The bigger, the better because you will need it. Label the  File Drawers Depending on how many files you have, you can decide the best way to label the file drawers. However, there are two major categories to consider and almost everything fits into them: Curriculum and Management. Curriculum means handouts and information that you use to teach Math, Language Arts, Science, Social Studies, Holidays and any other subjects you cover with your students. Management can broadly be defined as things you use to manage your classroom and teaching career. For example, your management files might include discipline, professional development, school-wide programs, classroom jobs, etc. Discard What You Can Now comes the ugly part. Hopefully, youve already been using some type of file folder system, even if they are just stacked in a corner some place. But, if not, youre going to have to sit down with all of the papers you use during teaching and go through them one by one. First of all, look for things that you can throw away. The more you can pare down to the papers you really use, the further you go towards the ultimate goal of true organization. For those papers you need to keep, start organizing them into piles or, better yet, make file folders on the spot, label them, and just put the papers right into their new homes. Be Specific With the Categories You Use For example, if you are organizing your  science materials, dont just make one big Science folder. Take it one step further and make one file for oceans, space, plants, etc. That way, when it comes time to teach your ocean unit, for example, you can just grab that file and have everything you need to photocopy.  Next, use hanging files to place your file folders in a logical sequence.   Maintain Organization Then, take a deep breath - youre essentially organized! The trick, though, is to maintain this level of organization over the long term. Dont forget to file new materials, handouts, and papers as as soon as they come across your desk. Try not to let them linger in a bottomless pile out of sight. This is easy to say and harder to do. But, dig right in and get to work. Being organized feels so good!