How the Economy Is Actually Doing; The Antitrust Case Against Big Tech; Elon Musk Says He Once Approached Apple CEO About Buying Tesla; How Amazon Wins; U.S. Sues Walmart; MindGeek; Ziplining in Kenya
1) This New York Times article has some insightful charts: How the Economy Is Actually Doing, in Nine Charts. Here are two:
2) Following up on last week's e-mail about the challenges facing big tech firms, here are two interesting articles...
From the New York Times: The Antitrust Case Against Big Tech, Shaped by Tech Industry Exiles. Excerpt:
Regulators are relying on insiders like Dina Srinivasan, who left her digital ad job after concluding that "Facebook and Google were going to win and everybody else is going to lose."
From Axios: Ranking the 5 big suits against Google and Facebook. Excerpt:
Facebook stands to lose the most, but Google is more likely to lose: That's the consensus of experts Axios asked to rank the threats the two tech giants face as five separate major antitrust lawsuits bear down on them.
Why it matters: A loss for Facebook or Google in any of the cases could force deep changes in how Silicon Valley does business – and even lead to a court-ordered breakup.
Here's your crib sheet for the cases.
3) Speaking of big tech, this was a big whiff by Apple (AAPL) CEO Tim Cook. Maybe it wouldn't have made sense to buy Tesla (TSLA)... But to not even take a meeting? Elon Musk Says He Once Approached Apple CEO About Buying Tesla. Excerpt:
Tesla's effort to bring out its Model 3 brought the electric car company near collapse in 2018. Now Chief Executive Elon Musk has divulged a new twist: He says he contacted his Apple counterpart, Tim Cook, to save his company.
"During the darkest days of the Model 3 program, I reached out to Tim Cook to discuss the possibility of Apple acquiring Tesla (for 1/10 of our current value)," Mr. Musk said in a tweet Tuesday. But the Apple CEO, he said, "refused to take the meeting."
Mr. Musk revealed the latest detail as he questioned the seriousness of Apple's plans to bring out an electric car of its own, amid a new report the company is pushing for 2024 production.
4) The Wall Street Journal takes an in-depth look at Amazon's (AMZN) often-bare-knuckled tactics: How Amazon Wins: By Steamrolling Rivals and Partners. Excerpt:
Jeff Bezos built Amazon.com from his garage with an underdog's ambition to take on the establishment. He imbued staff with an obsession to grow fast by grabbing customers using the biggest selection and lowest prices. Today, he has more than 1.1 million employees and a market valuation around $1.6 trillion.
But Amazon never really grew up. Mr. Bezos still runs it with the drive of a startup trying to survive.
That ethos helps keep Amazon booming. Aggressive competition – including wresting market share from rivals – is often a hallmark of a successful business. It's also why the tech-and-retail giant is the target of rivals, regulators and politicians who say its tactics are unfair for a company its size, and potentially illegal. As the company has grown, so has its capacity to take on an ever-growing array of competitors.
To keep customers happy, which Mr. Bezos has long said is Amazon's fixation and growth strategy, executives behind the scenes have methodically waged targeted campaigns against rivals and partners alike – an approach that has changed little through the years, from diapers to footwear.
As someone who continues to recommend Amazon's stock, I love that the company isn't losing its aggressiveness as it grows in size and dominance. But as a citizen, I'm glad that it's also under close scrutiny and applaud articles like this.
5) Cheers to the Department of Justice and jeers to retailing giant Walmart (WMT): U.S. Sues Walmart, Alleging Role in Fueling Opioid Crisis. Excerpt:
The Trump administration sued Walmart Tuesday, accusing the retail giant of helping to fuel the nation's opioid crisis by inadequately screening for questionable prescriptions despite repeated warnings from its own pharmacists.
The Justice Department's lawsuit claims Walmart sought to boost profits by understaffing its pharmacies and pressuring employees to fill prescriptions quickly. That made it difficult for pharmacists to reject invalid prescriptions, enabling widespread drug abuse nationwide, the suit alleges.
It takes a lot of chutzpah to behave like this... and then sue the government in advance of them suing you!
The country's largest retailer by revenue, Walmart has been expecting this complaint and sued the federal government in October to fight the allegations pre-emptively. That suit accuses the Justice Department and DEA of attempting to scapegoat the company for what it says are the federal government's own regulatory and enforcement shortcomings.
6) Following up on my two e-mails last week about New York Times columnist Nick Kristof's exposés, The Children of Pornhub and An Uplifting Update, on the Terrible World of Pornhub, here's an in-depth look by the Financial Times into the industry leader: MindGeek: the secretive owner of Pornhub and RedTube. Excerpt:
In the Internet era, porn is everywhere, but its owners are out of sight.
Porn pioneered elements of the global online advertising industry such as targeted advertising, pay-per-click and email marketing and is today a substantial part of the Internet economy. So-called "tube" sites have also courted controversy over videos with links to exploitation of children and sex trafficking.
Yet very little is known about the new group of operators whose pockets are being lined by the insatiable demand for sexually arousing footage.
No entity exemplifies this more than MindGeek, which with very little scrutiny or accountability, has quietly become the dominant porn company. The Montreal-based business is the owner of several of the sector's most visited sites including Pornhub, RedTube and YouPorn. At least according to public financial records, MindGeek towers over the pornography industry in Europe and America...
The Luxembourg-registered group, which in 2018 recorded just over $460 million in revenues, entices more than 115 million visitors to its websites every day. In the U.S. over the past month, for example, more web searches were recorded for "Pornhub" than "coronavirus" or "Trump," according to Google data.
Prospective MindGeek employees are told they will be able to take "big data to the next level," uncovering "user habits overnight that take others months to gather." Every day, roughly 15 terabytes worth of videos get uploaded to MindGeek's sites, equivalent to roughly half of the content available to watch on Netflix.
7) Empire Financial Research is closed for the next two days, so I want to wish you a Merry Christmas from my family to yours! Here's a picture of my nephew, parents, daughters, wife, and me ziplining yesterday outside Nairobi, Kenya:
And this morning, we went to the Giraffe Center:
Look for my next daily e-mail in your inbox on Monday, December 28.
Best regards,
Whitney