We asked CEOs at the Reuters Global Technology, Media and Telecoms Summit this week to pick out some stocks they would consider good investment plays.

With the caveat that they couldn’t cite their own company, many executives stuck to consumer favorites like Apple or Google , or delved into alternative energy. Some circled back to prior employers, while others dodged the question, saying if they were into stock-picking, they wouldn’t be CEOs.

I’m a long-term investor so I would pick Apple. Yes, it’s about 187 bucks or something like that, so it’s not a cheap stock to buy, but I still think in the long term, as long as nothing happens to Steve Jobs, it’s one of the coolest companies and it has had more surprises up its sleeve than any other company I have seen in years.
– Hamid Akhavan, CEO of T-Mobile

I will disclose the fact that I am a shareholder of Amazon and will continue to be for several decades. Obviously I am biased. I spent nearly a decade at Amazon. But I do believe that the trends absolutely support Amazon over the long-term.
– Jason Kilar, CEO of Hulu

I always put Cisco as first. It is just a phenomenal company and I’m constantly blown away that a $40 billion company can keep growing at 15 percent a year.
– Brian Halla, CEO of National Semiconductor, who sits on the board of Cisco Systems

I guess I would pick someone like WD (Western Digital). My competitor makes $4 a share and it is trading at something like $27. That is ridiculous.
– Bill Watkins, CEO of Seagate Technology

BlackBerry … I have not looked at the price recently but I wish I had bought it a couple of years ago when I got very passionate about using it.
– Erik Wachtmeister, founder and chairman of A Small World, said of Blackberry maker Research in Motion

I do look somewhat enviously at what David Calhoun is doing at Nielsen … The attraction is you can do things inside that private equity environment which don’t attract the attentions of Reuters, Thomson or Thomson Reuters, or indeed others.
– Martin Sorrell, CEO of WPP , who joked that if he had enough money, he would take WPP private.

I wish I would have bought Discovery a year ago. They’ve done a great job reinventing that whole platform and that stock is up a ton.
– Mike Fries, CEO of Liberty Global, which like Discovery is controlled by cable mogul John Malone

I have so much wrapped up in AT&T stock, I’ll be honest — what I’d do in the market outside our own stock is pretty much geared to indices and sectors.
One of my individual investments is BP but that’s because that’s where my dad worked for years. So I inherited stock. I won’t sell.
–Rick Lindner, CFO of AT&T

I wouldn’t buy any single stock. I would buy a sector, and I would buy the energy sector. In two to three years’ time, I’d buy stocks related to lengthening human life.
– Luca Majocchi, CEO of Seat Pagine Gialle

I’m not the best person to ask about stock picks. I actually have the opposite effect. Whatever I buy you should sell and whatever I sell you should buy.
– Enrique Salem, COO of Symantec

Still don’t know where to spend your tax rebate, assuming you’ve got cash to spare despite the high oil prices? Check out more stock tips from our executives here.

Sir Martin Sorrell, CEO of WPP Group Plc, was interviewed as part of the Reuters Global Technology, Media and Telecoms Summit held this week around the globe. He talked to Reuters reporter Kate Holton in London, with groups of reporters calling in from Paris and New York to ask questions. Here are extended excerpts from a longer interview:  

SOFTER 2009; REBOUND IN 2010

Reuters: How is the U.S. advertising market holding up in light of the credit crunch and housing crisis?

Sir Martin: I would just say that I think we continue to be surprised by the relative strength of the US in the first four months of the year, I guess.

Reuters: Previously said you see a stronger 2010 but concerns in 2009. Are you still happy with that characterization?

Sir Martin: Following the Beijing Olympics and the elections of the new US President, 2009 may see a little bit of slowdown in China but all of these things are relative because China is still growing at 20 percent plus and it can’t carry on forever. The GNP can’t continue to grow 10 percent per annum consistently so — forever. The laws of compound arithmetic just make it very difficult. So ‘09 I think you have a little bit of relaxation and also I don’t think the world has decoupled. So if America’s weak, as we have said before, you may not catch a flu, but you may certainly catch a cold.

And then in 2010 a number of events –you have the (U.S.) mid-term congressionals. So any US President has to do something unpleasant in ‘09 will do it early and hope that mid-term congressionals would not be affected. But you’ve got the Shanghai fair, the expo in 2010. You’ve got the Asian games. You’ve got the Winter Olympics in Vancouver and you’ve got – the biggest event is probably the World Cup in South Africa

Reuters: If we did experience a greater economic downturn would you expect to see increased competition amongst agencies for business? How does that impact on you?

Sir Martin: On price competition I said before that we saw some deep discounting on the media side. We don’t know whether — where that came from but one of our — two of our multinational competitors won in the context of a multinational piece of business originating in America. These were both incumbents because of the threshold on the incumbents’ key business is very great. One paid a check for $28 million and in the UK here another one paid a check for $20 million and we were given the option in both cases to respond (inaudible) clients.

We thought the pricing that they were promising was commercially unrealistic and impossible to achieve. In other words it would have a significant impact on their profitability. Because once you start to offer those things it has an impact on other clients. Those other clients say why didn’t you to the same for me?

But you know that’s not in 2009 obviously or 2010. But generally we manage to consistently increase our margins and Omnicom (the world’s largest advertising conglomerate, ahead of No. 2 ranked WPP) has the same margin today exactly the same or maybe I think maybe even a little bit smaller than it was five years ago. That does not seem to worry their shareholders. They talk about making investments in their business.

We are making investments in our business as revenues have grown over the last, say, three or four years at about 5 percent. We managed to increase our margins. So we are looking for progress and progress is 60 basis points or half a margin point each year which we’re hoping to do this year as well.

WPP GROWTH DRIVERS

Reuters: What areas of your business are driving these margin increases?

Sir Martin: I think it is decent growth topline. And there are some economies of scale, not enormous, in our business but some economies of scale — our portfolio is probably more orientated towards Asia, Latin America, the Middle East, Central and Eastern Europe, because that’s 35 percent. It’s more orientated towards digital. It’s about 25 percent now digital in one way or another. And we don’t see margin compression as we move increasingly into the digital area.

So I think it’s probably due to the fact that we are growing pretty rapidly. I was in Moscow this morning (after the Chelsea-Man U match the night before) and in Russia we continue to grow (around) 25 percent. It’s probably the fastest-growing country that we operate. We have a big company there, a joint company, effectively: Video International. It’s been very successful and continues to grow.

Obviously as the price of oil increases, the economic power of Russia increases too. So all of these things — I think in Moscow I think is 9 percent of the population and 39 percent retail sales. So there’s a very heavy concentration there of activity.

DIGITAL BUSINESS AND ‘FRENEMY’ UPDATE

Reuters: How would you characterize your relationship with Google, for which you famously dubbed the word “frenemy”?

Sir Martin: We are a very big customer of Google. I think we’re spending about $850 million a year with Google. That excludes I think search with Dell. So that will add to it. If you look at that, it’s about — it might be 4 or 5 percent of Google’s revenues this year. That will be smaller than our share for traditional media normally which would be around 20 or 25 percent.

If you ask why that is I think it’s because Google has focused and grown at least initially on SMEs. You know it’s sort of a mechanical Yellow Pages, a crude way of putting it. But it’s been extremely successful in I think improving the primary demand for Internet advertising and search obviously. They want, I’m sure, to build up their search business in Europe as we heard at Google Zeitgeist this week, the same they want to develop their business in television and print and radio, not by acquisition but organically, and I am sure they will do that.

So I think the situation remains the same. You see interestingly that Microsoft have been talking not in a dissimilar way recently about the rebranding of parts of their operations to Microsoft advertising yesterday. You saw presumably the announcement about our cooperation with them on paid search or cash-back search. And on Yahoo you see also that we announced or rather Yahoo and ourselves announced last week increased cooperation with Right Media on their inventory and making available a broader inventory to 24/7 Real Media with them.

I think it’s important to understand that our strategy is very different to our competitors. Through 24/7 Real Media we gain access to technology platforms which involve the application of technology in our business in search, media sales, advertisers, websites and publishers websites. And what that was about was the application of technology. This to do with the application of technology and that’s where I think we’ve taken a different position. So 24/7 is a technology platform or represents a technology platform, which is smaller than Doubleclick. But it is in some sense as competitive for that.

The nervousness that you referred to is understandable because Google is a massive company. It is still what — $175, $180 billion. It’s $22 billion of revenue. You add up all our market caps in the top four (global advertising groups), I think we get up to maybe about $50 (billion) maybe less — $40, $45 market cap…You add up all of our revenues we get to about 33, 34, 35.

So we’re 50 percent bigger than (Google) on revenues and combined market caps of the four (ad groups, including WPP) is about a third or a quarter. So the market’s saying something about the relative growth prospects and dynamics of the last four businesses and their business. I don’t think — going back to your question the position has changed whatever the companies that you mentioned were saying. Google is a phenomenal company as is Microsoft as is Yahoo frankly and we have increasingly tried to find ways to work with them.

But our strategy is, you know our strategy in the digital areas is as I said 25 percent of our business. We’re growing our businesses organically, the traditional businesses I put it that way — organically. We are acquiring digital agencies and you talk about companies like Blue, Aqua (Online), Last Radius, Agenda which is five sort of very strong companies that were acquired in the last year or so. And at the same time you know we continue to boost our traditional businesses…like Wunderman, G2, RMG Connect and OgilvyOne. Those four businesses alone have about $2 billion of revenue between them.

So, organic growth, acquisition of digital agencies and then finally what I said before which is the application of technology which is a very different route. I don’t think you and your frankly — forgive me for saying this — make the adequate distinction between that and what others, our more direct competitors are doing. So, we in this new area of growth we see the growth is coming in the new media and the traditional markets and in the new markets. The difference in the new markets is the old media, the traditional media that are also growing.

So Russian sites, Polish TV stations, CCTV, Shanghai Media Group, Indian newspapers — there was an article in the press this week or so about the growth of Indian newspapers and…readership and circulation. The traditional media are growing in the new markets whereas in the old markets, the more developed markets — traditional media is under pressure.

THE “VALUE” OF PR

Sir Martin: I think generally people — our clients continue to be concerned about pricing and as a result look at alternatives which one of the things that has interested us is the public relations, the public affairs which is about 10 percent of our business. Last year I think it was about $1.3 billion in revenue.

So if I can convince Reuters journalists … to be more — to be positive about WPP editorially that’s more effective than taking an ad in a press. The research that we see shows that. So public relations has become more important. Social networking is a way of writing letters to our mother like we used to do or some of us used to do.

And then the other thing that’s happened with PR which is interesting is polling has become much more scientific and that has enabled us to put a quantitative basis to an industry that probably was described historically as (dead) and has made the industry — these two things — technology and polling and data and made the industry I think much stronger and more attractive and I think that will carry on. So alternatives that we talked about, new media alternatives, alternatives whether they be Internet based, PC based, mobile based or video based alternatives that — the range of alternatives (inaudible) to significantly greater.

ONLINE VIDEO AND MOBILE ADS

Reuters: What’s your takeaway on online video? What does it need to do to attract online video advertising?

Sir Martin: It’s all a question of time. As the technologies improve, as bandwidths improve these things will become more — as mobile screens improve in terms of quality and capability these things will become more and more important. So you could say following your line of argument that the Internet is only 10 percent the worldwide advertising budgets and therefore it’s small.

The fact is it’s growing very rapidly from the small base. People would make similar arguments about China a few years ago or India or might continue to make it about Vietnam or Pakistan or Indonesia or Russia or the Middle East. These are small markets geographically in these cases and therefore deserve to be ignored. If that’s what people believe so be it and let them ignore it. I think that’s where geographically here — there are two issues.

One is geography which I think is intellectually much easier to get your mind around. The other is technology which is (inaudible) more difficult because unless you are a physicist or mathematician or a scientist, it’s often very difficult to understand the significance of all of these changes. Having said, the Internet is only 10 percent, we know that consumers spend 20 to 25 percent of their time online. We know that in the UK Google will probably outdistance ITV next year in terms of revenues.

We know that in Sweden Internet advertising is bigger than — is the first country where it’s become bigger than TV this year. Internet advertising will outdistance television in the UK next year as a result of what I said about Google and ITV. Somebody said to me that they went to the Google Zeitgeist…and there was a presentation on the site by three teenagers and the three teenagers were asked whether they watched and what do they do — this site was I think Stardoll where you build virtual dolls…And the three teenagers were asked whether they watched any television. They said no. I was talking to a journalist and he found that remarkable. Anyway so that’s just another example of consumption as it’s changing, media consumption as it’s changing. I’m sure yours have changed, I’m sure mine have changed. This is all part of it. So what seems small today may be big tomorrow. So I think you have to examine it and see what you think.

Reuters: And advertising on mobile?

Sir Martin: Okay, you’re paying money and you (have a) choice. You either decide that you’re going to invest some time and effort in looking at that or not. And if not you risk missing out on an opportunity. It may be the Beatles, it may not be the Beatles. But one of the things that have to do and you know the sort of things we’ve been investing in whether it be a SpotRunner, a VideoEgg, WildTangent, what it happens to be and really whatever it is that we are facing a view that we have to invest in some of these areas to understand what’s going on. I mean if you or I knew which way things were going we wouldn’t be spending our time talking to one another here. You wouldn’t be at Thomson Reuters and I probably wouldn’t be at WPP.

Reuters: Advertising on the Internet so far has not been about making sure the transaction happens rather than say building a brand or brand awareness. Would you go along with that and is video online a way that brand awareness would develop?

Sir Martin: Ultimately, everything will come together and you know when I say 25 percent of our business is digital, that will morph into all our business is affected by digital or digitizing data, pictures whatever it happens to be in due course. So you won’t make the distinction. So I think these are forced distinctions.

I think there is an inherent inertia to change which happens in lots of areas and you’ve got to try and overcome that. And when you have got 100,000 people in over 100 countries who have done things really successfully in various communication services and often because of the pressures of the moment don’t move on to experiment with other things. …The honest answer is when you put it all together it’s about strategy, creative execution and distribution. Those are the three things we do to.

But going back to your point obviously Google with its DoubleClick platform, Microsoft with it’s aQuantive platform can look at both sides or both strands of the market — search and display — and I am sure we will try and develop even better approaches and the agencies that work with them will do so too. It’s a bit like the question about the three strands before. I don’t think you’ll focus on one or the other.

I don’t think we’ll differentiate between online for tactical and offline for brand and we will be looking at all of these media.

What’s happening is the medium has become more and more important some might argue (that) the message is more important than the medium. I would argue increasingly the medium is as important or maybe even more important than the medium and is starting to (change) the messages that you put out through the various medium.

So I think the balance of our business has changed. Not only do we apply technology in a way that we didn’t do before but (the way) we think about media and the importance of media in our organization is far greater than it used to be.

MICROHOO

Reuters: How does all the talk between Microsoft and Yahoo and the potential consolidation of other major players relative to Google, how does that affect your thinking about the shape of the online industry?

Sir Martin: I think our clients like to see balance in the marketplace. And the attraction of Microsoft getting together with Yahoo in its original form was there would be better balance. So having one very strong competitor in the marketplace and then another one and make sure two competitors are not as strong.

You know, I mean it may not be the right assumption but bringing the two smaller ones together would create a bigger force that would balance the marketplace more effectively. Now that wasn’t to be for whatever reasons. But we now are told that Microsoft is talking to Yahoo about buying certain parts of its business or reaching agreements in relation to certain parts of its business and I think again that is a positive development because it will again bring more balance.

We have to see what happens. It depends on I’m sure lots of factors but on balance I think our clients and media owners and indeed agencies feel that better balance is a better thing. Whether right or wrong or not time will tell. But I think that is the overall position.

ON MERGERS

Reuters: Thank you very much, Sir Martin.

Sir Martin: Good luck with your merger (The Thomson-Reuters merger closed in April).

Reuters: It is done — it’s over, we are the survivors.

Sir Martin: Sorry. It’s not done, it’s just starting. The easiest thing is to do the deal. The most difficult thing is to make it work.

(Photo: Reuters)

AT&T is an official sponsor of the U.S. Olympic team, which generally makes for great brand building. This year, however, marketing promises to be a little more complicated because of political tensions. Look no further than the protests that accompanied the international torch relay.

This led us to ask Chief Financial Officer Rick Lindner about whether they’ve changed their minds about their Olympic advertising.

We certainly talk about our Olympics sponsorship. The key message we try to convey to people, particularly those that may have concerns, is that we’re not sponsoring the games. We’re sponsoring our Olympic team. That’s where our dollars and commitment goes. It’s the right place.

It’s sponsoring those athletes that are going to be competing. We’ve got to do a good job of communicating our position. We feel we’re doing the right things. I’m not aware that we’ve made any changes to our plans from an advertising standpoint.

Sir Martin Sorrell of WPP Group presides over the world’s second largest advertising services company. Business leaders the world over have consulted him on his views on how global economic trends will unfold. Many credit him with being far-sighted on the emergence of India and China, on the importance of the Internet and new media.
    
Today, at the Reuters Global Technology Media and Telecoms Summit, he suggested that corporations consider a complete about-face to the basic marketing idea entrenched for decades in the U.S. and Europe.  

One of the paradoxes we’re probably going to have to deal with in our industry is that historically, we’ve encouraged consumers to consume more. What we may have to do, particularly in the West as the oil price gets to $140, $150 or maybe even $200 (per barrel) … we may have to encourage people to consume less. That’s a very different approach. 

You heard it. Sorrell made the remarks when asked about his views on “going green” amid rising prices for fuel and the widespread consumer concern over the health of the planet.  

Does it make sense to encourage people to continually buy electronic equipment, which lasts a year costs a lot of money, and then you have to throw it away and that in itself causes environmental issues? Longevity may become more important. 
    
We know that consumers favor companies and brands that take environmental issues and sustainability issues seriously. If you talk to retailers like Wal-Mart for example they will tell you that irrespective of income and wealth, their customers prefer brands that are green or environmentally friendly as opposed to those that aren’t. 

Somewhere, a creative director is going back to the drawing board.

(Photo: Reuters)

No luck if you are an employee of AU Optronics and have been yelled at by your boss. There are no paper towels in the restrooms to wipe your tears!

In a drive to become more environmentally friendly, the world’s third largest LCD maker has stopped providing paper.

You’ll have to dry your tears under a hand dryer!

The company is also moving towards manufacturing display panels that consume less power. At the Reuters Global Technology, Media and Telecoms Summit, Chief Executive HB Chen said by the end of 2011 almost all notebooks will have displays illuminated
by LED backlight, which saves power.

But will consumers pay a premium for these products?

Chen said: “We try to make cheaper products. No question of letting consumers pay a premium.”

With the white noise of MicroHoo ringing in everyone ears, we asked Adobe Systems CEO Shantanu Narayen why he thinks “royal weddings” — idylic mergers between multi-billion dollar companies — in Silicon Valley are few and far between.

You know, because, giant Deathstars are better for everybody, right?

The answer: Even though some merger adviser is probably ringing to talk about “strategic alternatives” (we suppose), Silicon Valley entrepreneur-types are, like, you know, obsessed with minding their own beeswax.

I think the Valley is all about innovation and about charting your own course. And companies seeing opportunities for themselves. I’m focused on how do I continue to drive great new products and deliver value to my shareholders.

I think the zen or the DNA of people there is all about growth and all about driving new innovation.

He was speaking in New York at the Reuters Global Technology, Media and Telecom Summit, where he spoke of his own company’s appetite for mergers.

(Photo: Reuters)

Learning from others’ mistakes always makes business easier. At least that’s what Liberty Global is counting on as looks at digital video coming to television around the world. Chief Executive Mike Fries tell us a few of the lessons he took away from the roll-out of digital video and products like DVRs in the United States.

1. “Be patient with your box development.”
2. “You want to have everybody on the same platform.”
3. “Be disciplined about the economic model… don’t spend too much on the box.”
4. “It’s about the applications, not the content.”

All about the applications? Fries elaborates:

It’s about video on demand, it’s about a DVR that’s robust. And it’s about HD content. That doesn’t mean consumers don’t want another 100 channels. They might want another 100 channels and we’re gonna give it to them. But what we’re finding is fundamentally… it’s about those applications.

It allows you to push applications. It doesn’t devalue the content. But it gives you another level of ammunition. What I can do is manipulate the content. I can give them tools to rediscover the content to fall back in love with the content

(Photo: Reuters)

Seagate Chief Executive Bill Watkins has a reason to like easy, free ways to consume information on the Internet.

After all, his company is the world’s largest computer disk-drive maker, something that comes in handy for all the storage space required to back up online audio and video.

Here’s Watkins’s reasoning, which he gave us at the Reuters Technology, Media and Telecommunications Summit on Wednesday:

People will watch lousy content if it’s easy and cheap and free… . If you think about TV back in the ’50s … Hollywood and all those guys, they said “no way we’re going to let our actors get on TV.” … New York stage did the same thing. Radio did the same thing. So what did TV do? They invented their own content. It was the farm report, the Howdy-Doody show. And all of a sudden, people started watching it because it was easy and free. And then the advertising dollars started following TV. And so what happened? Everyone started having to put their content on TV. Radio had to give up. … You’re watching the same thing happening here on the Internet. And if people got nothing to do with their time, they’ll sit there and watch commercials. I mean, people watch commercials on the Internet and then they share them with friends. But that’s a great thing for us.

They may be empty calories, but they sure do fill up the bottom line.

There’s a lot of scary stuff out there — identity theft, viruses, spamming — and it’s getting scarier with each new technology.

Not only that, but as technology spreads around the world, new threats emerge all the time. That’s where McAfee comes into play, says Chief Executive Dave DeWalt.

“The more the world has flattened, the more emerging markets have come on… the more opportunity we see here at McAfee,” he told us. “Traditional markets of antivirus are interesting and growing but many new things are out there.”

Okay, so what are we talking about here?

Cell phones, for one thing. DeWalt notes that in Japan security applications are catching on big-time when it comes to cell phones. The reason is that cell phones are used for so much in Japan — buying stuff in vending machines, for instance — so the information stored on them needs to be locked down.

He points out that “the smarter the phone gets and the more pervasive commerce becomes on the phone” the more security applications for the phone will become a necessity.

So if you’ve got a cell phone, expect McAfee to come calling.

(Photo: Reuters)

We found out on Wednesday what happens when you mess around with Big Blue.

CFO Mark Loughridge came to the Reuters Technology, Media and Telecoms Summit to talk about all sorts of things, but it was his story about building the software services business in India that caught my attention. Loughridge was asked about whether it might make sense for IBM to hook up with a bigger Indian software services company. This was his response:

Well, you know, the Indian services software services company I’d think you want to team up with is us.

He then said that IBM in fact is the No. 1 software services business in India, and explained why:

It was some years ago and I forget exactly how this rolled out, but one of the co-chairmen I believe, of Infosys compared the relative services content of IBM to the Indian providers, and had likened IBM to Detroit and had likened them to the Japanese car manufacturers… The implication’s obviously they’re going to do to IBM what the Japanese car manufacturers did to Detroit. That statement was a seismic event for us. So we now have 74,000 employees in India.

Loughridge also talked about why it’s better to have a good mix of business coming from big, developed countries as well as high-growth emerging markets:

I do think that it’s a different environment now. … If I were in a business model where I needed double digit growth out of the G7 to drive performance, I would be in a cold sweat.