Tag: Business

BOOK clubs usually meet to discuss literature. But members of DataKind, a group of volunteers that helps charities use data to improve their services, are gathering in London to study a legal text. The General Data Protection Regulation (GDPR), set to come into effect on May 25th, is arguably the most complex piece of regulation the European Union (EU) has ever produced. A thick print-out includes its 99 articles and 173 preliminary comments. Gianfranco Cecconi, a data scientist leading discussions, is poring over a lengthy section he has annotated in red pencil.

After years of deliberation on how best to protect personal data, the EU is imposing a set of tough rules. These are designed to improve how data are stored and used by giving more control to individuals over their information and by obliging companies to handle what data they have more carefully. Recent revelations that Cambridge Analytica acquired data on Facebook users in underhand, and possibly illegal, ways has underscored the need to…Continue reading

LIKE Jaume Roures and Gerard Romy, two of its founders, Mediapro is proudly Catalan. Too proud, according to the Spanish police. The television company, which launched in 1994, has been investigated for paying for a press centre for foreign journalists during an unconstitutional independence referendum in the region last October, and for producing a sympathetic documentary on the vote. Mediapro denies wrongdoing. At Madrid’s main annual contemporary art fair last month its third co-founder, Tatxo Benet, purchased a contentious set of photographs which labelled the plebiscite’s jailed Catalan organisers as political prisoners.

Pro-independence antics may be popular in Catalonia, which on March 25th again erupted in violent protest after German authorities arrested Carles Puigdemont, the former Catalan president. But they could be a headache for Mediapro’s new Chinese owners. On February 15th Orient Hontai Capital, an investment firm from Beijing, bought 53.5% of Imagina, a holding firm which owns Mediapro, in a deal that valued the firm at…Continue reading

IN AMERICA Big Oil remembers BP’s attempt to go “Beyond Petroleum” in the 2000s as a toe-curling embarrassment. In Europe it is seen as being ahead of its time. Once again the oil industry is experimenting with cross-dressing. Statoil, a Norwegian oil firm, is abandoning a name given to it almost 50 years ago to become the wispier Equinor. The firm formerly known as Dong, for Danish Oil and Natural Gas, is now Ørsted, a big wind firm named after the founder of electromagnetism.

Royal Dutch Shell and Total, Europe’s biggest private producers, are (mercifully) not changing their names. But they are toying with a strategy that could be far more adventurous—moving their core businesses from hydrocarbons to electrons.

Amid pressure to limit climate change, and the growth of renewable energy and electric vehicles (EVs), they expect low-carbon electricity to become a much bigger part of the world’s energy mix within the next few decades. They have already invested heavily in building global natural-gas businesses for cleaner…Continue reading

Period piece

THE disposable sanitary pad debuted in the late 19th century. It was such a taboo that a purchase involved dropping the exact sum in a box at the chemist’s counter. The pack was handed over, no words uttered. Menstrual products could not be advertised on American television until 1972. In 2015 an ad showing a runny egg yolk was questioned by New York’s subway for being too suggestive of period flow (which was the point).

Squeamishness has hampered innovation. The applicator tampon, invented in 1931, was the last big novelty in menstrual devices to go into widespread use. Its cardboard applicator, a tube within a tube, allowed women to push a tampon inside without committing another no-no (touching their bodies).

In the decades since, big manufacturers such as Procter & Gamble, Kimberly-Clark and Essity have only made tweaks. Pads became thinner and acquired an adhesive strip. Plastic replaced cardboard in applicators. Compact tampons with no…Continue reading

Green is the new black

BEING a commuter in much of South-East Asia requires reserves of patience. In city after city, bar Singapore, jams confine people in taxis for hours, or force them onto the back of motorbikes that weave precariously through traffic. These qualities of perseverance are not shared by Uber, an American ride-hailing firm. This week it announced that after five years and $700m of investment in the region, it would be selling its business there to Grab, a Malaysian startup based in Singapore.

South-East Asia is not known for giving birth to Silicon Valley-beating tech companies, says Ming Maa, Grab’s president. “This acquisition shows that this is changing,” he boasts. Under the terms of the deal Uber will take a 27.5% stake in Grab, which is valued at $6bn. The deal makes Grab, which started in 2012 after its two co-founders met at Harvard Business School, the dominant ride-sharing app in a market of 634m people. It operates in 191 cities across…Continue reading

G-whizz

JAWS dropped when earlier this year a White House memo argued that the American government should build and run its own 5G mobile network. The reason given was national security. The memo cited Huawei, a Chinese maker of telecoms gear, as a strategic threat. Many assailed the idea of such massive state intervention and the idea was quickly squashed. South of the border, Mexico is experimenting with something that could be a more sensible version of the American officials’ suggested venture: a wholesale mobile network.

Red Compartida (“shared network” in Spanish) went live on March 21st. The motive behind one of the world’s most ambitious telecommunications projects is not national security. Rather, Mexico is trying to pull off a triple feat of expanding mobile coverage, lowering prices and creating a viable business environment for 5G, the next generation of wireless mobile internet.

The project is a $7.2bn public-private partnership that is part of the country’s 2014 telecommunications…Continue reading

IN BUILDING the world’s largest advertising company over the past 30 years, Sir Martin Sorrell, chief executive of WPP, has weathered two recessions and survived a global financial crisis. His firm nearly went bankrupt in the early 1990s. Now he must make his hardest advertising pitch yet, to convince the corporate world that image-making agencies like his are not dinosaurs on the brink of extinction.

The world’s advertising giants are struggling to adapt to a landscape suddenly dominated by the duopoly of Google and Facebook. Some of their biggest clients, such as Procter & Gamble (P&G) and Unilever, are also being disrupted, in their case by smaller online brands and by Amazon. They are cutting spending on advertising services, and also building more capabilities in-house. Consultancies with digital expertise such as Deloitte and Accenture are competing with agencies, arguing that they know how to connect with consumers better, and more cheaply, using data, machine learning and app…Continue reading

A POPULAR riff doing the rounds in tech circles is that, if data are the new oil, then Facebook’s Cambridge Analytica fiasco is the equivalent of Deepwater Horizon. That was the name of an oil platform that exploded in April 2010, coating the Gulf of Mexico and the reputation of BP, the firm responsible, in a toxic slick.

Yet just how damaging are “Deepwater” incidents for firms and their owners over time? Perhaps they cease to matter after the initial burst of media purgatory, grovelling by executives, celebratory cant from competitors and politicians’ grandstanding.

To answer this, Schumpeter has looked at eight of the most notable corporate crises since 2010, including those at Uber and Wells Fargo. The evidence shows that these episodes were deeply injurious to the companies’ financial health, with the median firm losing 30% of its value since its crisis, when compared with a basket of its peers. Facebook should beware.

When a scandal first breaks, executives at the…Continue reading

IT IS a choice that would make Thomas Hobson proud. European officials this week unveiled plans for a quick and dirty tax policy to apply to big digital firms, in theory by the end of the year. The idea, promised since September, would ditch a tradition of taxing profits and instead let collectors in member states take a share, 3% for starters, of the firms’ local revenues. There is a lively debate about where exactly the tech giants create taxable value. Is it where their programmers sit? Or the intellectual property? Or users? The firms have become so adept at tax avoidance that the European Commission is not going to hang around until the argument is settled.

Pierre Moscovici, the commissioner overseeing the proposals, was at pains to say on March 21st that the turnover tax would be an “interim” fix. He denied Americans are his targets. Between 120 and 150 companies would be affected, around half of them American and a third European. (Apple, Google and other American giants would surely get the biggest bills.) Only those with global…Continue reading

DREW HOUSTON and Arash Ferdowsi must have few regrets since they turned down an offer for their startup from Apple’s then boss, Steve Jobs, in 2011. Dropbox hasn’t done too badly in the interim. It rakes in over $1bn in revenue by allowing users—500m at the last count—to store and share data in the cloud. On March 23rd it is due to go public, making it the biggest firm to do so since Snap, a messaging app, floated in early 2017. Dropbox’s range for its share price values it at between $8bn and $9bn. That will comfort other “unicorns”, the tag given to startups valued at over $1bn, that are considering listing.

True, the valuation is less than its early backers were hoping for when they valued the company at $10bn in 2014, when it last raised equity. But as Matthew Kennedy from Renaissance Capital, a research firm, points out, the previous valuation coincided with peak investor exuberance for tech firms. The adjustment may also reflect some doubts about the firm’s long-term prospects.

Its challenge, common to many…Continue reading