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Consumer Confidential: Facebook tax, mag sales, Amazon gets real

February 07, 2012|By David Lazarus
  • The $2-billion man?
The $2-billion man?

Here's your touch-me-in-the-morning Tuesday roundup of consumer news from around the Web:

--You think you pay too much in taxes? Facebook's upcoming IPO will make founder Mark Zuckerberg a billionaire, but it will also stick him with an eye-popping tax bill that could reach as high as $2 billion. The gigantic tax hit is a consequence of Zuckerberg's plan to exercise stock options worth billions. The move will significantly increase his ownership stake in the company he founded eight years ago. Zuckerberg currently owns almost 414 million shares of Facebook, but he also holds options to buy an additional 120 million shares at the bargain price of 6 cents a piece. Facebook said in its IPO paperwork that Zuckerberg plans to exercise those options and will sell some of his shares during Facebook's initial offering to cover the tax bill. Must be nice to pay more in taxes in a single year than most people will ever see in their entire life. (CNN Money)

--We clearly aren't that keen on buying magazines at newsstands. Such sales dropped 10% in the second half of 2011, according to the Audit Bureau of Circulations. Overall circulation including subscriptions was down just 1%. But the decline in single-copy sales is a troubling sign for publishers. That's because they make more money from retail sales than from subscriptions, which are sold at a discount so publishers can increase circulation and attract advertisers. The industry group said single-copy magazine sales totaled 28.9 million in the last six months of 2011. Cosmopolitan was still the top-selling magazine at newsstands, even though its sales declined nearly 7% compared with a year earlier, selling 1.5 million copies. (Associated Press)

--Speaking of retail, Amazon is taking its first baby steps into the oldfangled world of brick-and-mortar. The online heavyweight is offering more products in stores that may benefit from hands-on interaction with shoppers. Analysts say the move may be inspired by the success of Apple, which has hundreds of its own glitzy stores to show off iPhones, iPads and other gadgets. Amazon also reportedly plans to open a physical store in its home town of Seattle in coming months to showcase its growing line of gadgets, including the Kindle Fire tablet. Microsoft also tried to make a push into the store business. That didn't quite work out. (Telegraph)

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