By John Kell and Alan Murray
February 2, 2016

Can you win a race by coming in third? That’s what Marco Rubio seems to have done last night in Iowa, finishing with a better-than-expected 23% and earning top spot in what pundits now call the “establishment lane” of the Republican presidential race. That lane, however, remains very narrow. Ted Cruz led the caucuses with just under 28% of the vote, but it’s unclear how much that victory, powered by the state’s well-organized evangelicals, will carry forward into other states. Headline writers delighted in calling Donald Trump, with 24% of the vote, the “first loser” of the race, but there’s little reason to think that will slow him down or cut into his nationwide lead in the polls.

 

The Democratic race between Hillary Clinton and Bernie Sanders remained too close to call. The 74-year-old socialist mimicked Barrack Obama’s win eight years earlier by exciting young Iowans, but its far from clear he can assemble the diverse racial coalition that powered Obama over Clinton in subsequent states.

 

Yesterday’s other big winner was Alphabet, which became the world’s most valuable company, surpassing Apple after a strong earnings report. The company, which makes its billions selling search-based ads, for the first time provided some financial details on its “moonshots” – businesses ranging from self-driving cars to wired homes to human longevity. Those efforts lost $3.6 billion during the quarter, but investors didn’t seem to care, sharply distinguishing the West Coast giant from the other American corporations that are increasingly under pressure to shut down efforts that won’t pay off in three years or less. Alphabet plays by different rules, as CEO Larry Page explained in his interview with me at the Fortune Global Forum last November.

 

Closer to home, I interviewed AOL CEO Tim Armstrong yesterday at the American Media Magazine Conference, where he predicted the mobile revolution “will rip through the Internet and traditional media” in the coming decades. “I thought the Internet was the biggest thing to ever happen in my lifetime,” said Armstrong, whose company was bought by Verizon for $4.4 billion last year. “I think mobile will dwarf that.”

 

Armstrong gave hope to the magazine publishers assembled in the room, saying strong content brands like theirs are “kryptonite to commoditization” in media. But to succeed, he said, they would have to to overcome the intransigence in their own organizations. “Your biggest competition is yourself,” he told them. Amen to that.

 

More news below.

 

Alan Murray
@alansmurray
alan.murray@fortune.com

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