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from Felix Salmon:
Why Yahoo-Tumblr makes sense
Amidst all the positivity coming out of Yahoo and Tumblr, any self-respecting pundit is going to want to pour cold water on the whole deal. Especially since billion-dollar mergers almost never work out very well. But here's the weird thing: the more I look at this tie-up, the more it makes sense to me.
Yahoo has more than enough money to pay for Tumblr in cash, which is exactly what it's doing. Here's one easy way of seeing why this is a good deal for Yahoo: profitable tech companies (think Google, or Apple) tend to have too much cash and tend not to know what to do with it -- with the result that it just sits there, uselessly. For Yahoo, having $4.4 billion in cash plus Tumblr is clearly going to be better in terms of the future than having $5.5 billion in cash, waiting interminably for some kind of Godot to come along and be bought. $1.1 billion is a lot of money, but it's not so much money that it's going to change the way that investors look at Yahoo's balance sheet.
More fundamentally, Yahoo is acquiring 300 million young, mobile users at a stroke -- along with invaluable information about what they like to consume online, and how they like to consume it. It's a four-fer, in fact.
First, there's the immediate traffic boost.
Second, there's the ability to use Tumblr's data to help optimize the rest of Yahoo's pages. If I'm logged in to Tumblr, as I normally am, then when I go to Yahoo, I should see the kind of material that Tumblr knows I'm interested in, rather than some one-size-fits-all generic home page.
from Felix Salmon:
Bloomberg is watching you
All social networks are based on a cognitive con. No one likes to give out valuable personal information to some huge corporate entity, so the trick is to make people feel as though they have some kind of control or ownership, even when they don't. Most of Facebook's privacy controversies boil down to much the same thing: people share personal information with their friends, using the convenient Facebook platform, and then are shocked when it turns out that Facebook has access to that information and is making money from it.
The more centralized and controlling a social network is, and the less that it's run on a peer-to-peer basis, the more likely it is to run into this kind of trouble. So it probably should come as little surprise to learn that Bloomberg, the highly-centralized and highly-controlling social networking company, has now run headfirst into its very own privacy scandal. (Bloomberg is a competitor of Thomson Reuters, which is my employer and owns Reuters News.)
from Breakingviews:
BT’s free sports gambit tries to out-Sky Sky
By George Hay and Quentin Webb
The authors are Reuters Breakingviews columnists. The opinions expressed are their own
BT's free sports gambit is an attempt to out-Sky Sky. The UK telco on May 9 surprised investors by offering new broadband users the chance to watch live Premier League soccer for no extra charge. The 2 percent, 6 percent and 12 percent drops in the share prices of BT, BSkyB and smaller competitor TalkTalk may look like an extreme response to the move, but they reflect rational fears of a price war.
from Felix Salmon:
Mail Online: Big, but not valuable
Back in December 2011, the Daily Mail had 45.3 million unique visitors, according to ComScore. By March 2013, 15 months later, that number had grown to 46.4 million, again according to ComScore. We learn the latter figure -- but not the former -- from Christine Haughney's article about the website today:
For now, many analysts consider the Mail Online a growth source for a strait-laced media company. The parent company’s total annual revenue is about $2.7 billion and its net income is $466 million. It depends on newspapers for about 20 percent of its profits, according to Mr. Reynolds.
from Felix Salmon:
Niall Ferguson’s history with Keynes
Brad DeLong has found a 1995 article by Niall Ferguson which pretty much puts the lie to Ferguson's claim about his take on John Maynard Keynes. Here's what Ferguson now says:
My disagreements with Keynes’s economic philosophy have never had anything to do with his sexual orientation. It is simply false to suggest, as I did, that his approach to economic policy was inspired by any aspect of his personal life.
from Global Investing:
It’s all adding up – emerging markets to drive global spending
The world's leading ad agencies are positioning themselves in Brazil, Russia and China -- countries that are expected to provide almost a third of the growth in global advertising over the next three years. That's according to a report by S&P Capital IQ Equity Research, a unit of publishing giant McGraw Hill.
Most major advertisers already have a foothold in these BRIC economies, where the advertising market is projected to grow by an average 10.7 percent a year over the next three years -- more than three times the growth rate in the developed world. Over the next 15 years, big emerging markets will add $200 billion to the global ad spend, S&P Capital IQ reckons.
from India Insight:
Just another rape in India. Are we becoming numb?
(Any opinions expressed here are those of the author and not necessarily of Reuters)
A grim parlour game sometimes comes to mind when I read the latest story about someone raping a woman or a child in India. Is this the one that's going to change everything? Is this the one that's going to keep me up for days contributing to the news media's coverage? Or is this just another rape?
from Breakingviews:
Will Netflix star in “The Easter Island Effect”?
By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Will Netflix have a starring role in “The Easter Island Effect”? The Internet video service seems to be using up resources faster than it can produce them. New series like “House of Cards” lure customers, at a cost. Netflix cash flow remains negative and obligations are rising. It’s starting to evoke the centuries-old Polynesian society that eventually exhausted its means of sustenance.
from Felix Salmon:
Aereo and the death of broadcast TV
One of the funnier subplots in the media universe these days is the one about Aereo. Aereo is the kind of company which sounds like a thought experiment, but it's very real: it takes free broadcast signals, uploads them to the cloud, and rents them out -- at a fee -- to people who want to watch broadcast TV on their computers. It's a way of showing the broadcast networks how silly it is that they don't put their programming online, and it's also an argument for why cable companies shouldn't have to pay through the nose for the right to retransmit content which has always been free-to-air.
Real-world companies are largely immune to thought experiments, however, and so it was only when Aereo started operating in the real world that the court cases and ultimatums started being thrown around. If Aereo isn't shut down, say the broadcasters, they might have no choice but to take their networks off the air entirely. This of course would effectively kill Aereo, whose CEO is rather desperately drawing an analogy between the right to receive broadcast TV and the right to vote.
from Felix Salmon:
The social media tail mustn’t wag the MSM dog
The Boston bombing and subsequent manhunt was in many ways the first big interactive news story. It wasn't the first big event to be covered obsessively on social media, but it was the first big event where millions of people became part of the story themselves. Some did so through choice, combing through photographs on Reddit or 4chan; others simply happened to be in Boston and saw their public lives, as broadcast to the world on social media, become part of the story just by dint of where they were.
The result was a veritable deluge of streams, in a world where the news has become a hard-to-navigate rapids at the best of times. For anybody who wanted to stay on top of what was happening without drowning in noise, experience and level-headedness were invaluable, and were displayed most prominently by Pete Williams of NBC.
