Good morning. We are gathering final responses to our Fortune 500 CEO-only survey today, and will report on them next week (including the CEOs’ preference in the presidential election). So if you are CEO of a Fortune 500 company and haven’t yet completed the survey, please do so today. Your name will not be used. Email if you need me to resend the CEO-only link.
For the rest of you, here’s a separate copy of the survey. Please check it out. It takes less than five minutes to complete, and I’ll be interested to know how the opinions of all CEO Daily readers compare to those of the 500.
The news below. Have a great Memorial Day weekend; we’ll be back on Tuesday.
• Google Triumphs over Oracle
Google has won a major victory, but not a final one, in its epic copyright battle with Oracle. A 10-strong jury found that Google had abided by U.S. copyright law when it included key packages of Java script software in its its Android mobile operating system. Oracle, which had bought Java’s original developer Sun Microsystems in 2010, had sued for $9 billion in damages from lost revenues going back to 2007. The tech industry will breathe a sigh of relief, in that it upholds the more-or-less free use of so-called Application Programming Interfaces, essential building blocks in the construction of computer code. Upholding Oracle’s copyright would arguably have left software developers on uncertain legal ground in the future. Oracle has already said it will appeal the verdict.
• Superbug Arrives in the U.S.
A strain of bacteria resistant to Colistin, the healthcare system’s antibiotic of last resort, has been detected in the U.S. for the first time, an ominous milestone in what appears to be a losing battle with drug-resistant bugs. A study published Thursday in Antimicrobial Agents and Chemotherapy said the discovery of the bacteria, a strain of E.coli, in the urine of a Pennsylvania woman “heralds the emergence of a truly pan-drug resistant bacteria.” The lady in question is alright, because her condition can be treated with other drugs. Others will be less fortunate. Of all the nightmare scenarios for the future of humanity, a world without effective antibiotics, where currently mundane infections can suddenly pose lethal risks, is one of the scariest. The search for solutions needs to be at the very top of both the pharma sector’s, and the government’s, agenda.
• Trump Woos the Coal Industry
Donald Trump promised on Thursday to boost domestic energy production, roll back Obama administration climate regulations, and “cancel” the Paris climate agreement in his first 100 days in office, in his first major speech focused on energy issues. Trump said he would roll back the Climate Action Plan, which includes the Clean Power Plan, and the Waters of the United States rule, which expands the Environmental Protection Agency’s authority over water pollution. Trump said he would “cancel the Paris climate agreement, and stop all payments of the United States tax dollars to U.N. global warming programs.” The message is entirely consistent with his previous comments and would likely have support in a Republican-dominated Congress. It’ll be interesting to see how the pitch plays with regions that depend more on shale gas, which is the coal’s sector’s biggest domestic competitor.
• How Impressed is Janet?
Janet Yellen is speaking at Harvard later today, and will give us a hint as to whether the next rate rise might actually come as early as June. Her Federal Reserve board colleague Jerome Powell said yesterday he imagined one could come “fairly soon”, due to the “substantial progress” made by the economy. Building on the strong housing starts data earlier in the week, we had news yesterday of another drop in new jobless claims and a 5.1% rise in pre-owned home sales in April. On the downside, corporate investment is still weak: the Conference Board warned earlier this week that labor productivity in the U.S. is set to fall this year for the first time since 1982. •
Financial Times, metered access
Around the Water Cooler
• The Travails of Twitter…
Two more senior executives are leaving the microblogging service as it continues to lose investor confidence against a backdrop of slowing growth (monthly active users grew only 3% in the first quarter). Nathan Hubbard, head of media and commerce, is going after only four months at the company (the announcement comes a day after reports that Twitter is killing the ‘buy’ button that it launched to such fanfare in 2014. Also on the way out is Jana Messerschmidt, head of business development. The news did nothing to lift the company’s battered stock price, which is down some 60% on the year and bumping along close to all-time lows.
• …and the Strength of Snapchat
By contrast, Snapchat continues (seemingly) to go from strength to strength. The company said Thursday it raised $1.8 billion in a new funding round that values it at around $20 billion (Twitter’s market value is now around the $10 billion mark). The difference is explained, in part, by growth: Snapchat’s user base grew by 50% last year and traffic on the app is genuinely eye-catching: its users are viewing 10 billion videos a day, putting it well ahead of even Facebook in the hottest segment of the online ad market. However, the company is nowhere near as far advanced as Twitter in trying to monetize its service. How its overwhelmingly millennial audience, with its habitual dislike of anything that reeks of corporate money-grubbing, will respond when Snapchat starts seriously to squeeze money out of its product is still to be seen.
• Hands Across the Sea (2016 Remix)
Facebook and Microsoft have announced plans to lay a new fiber optic cable across the bed of the Atlantic Ocean, in a move that they claim will meet burgeoning demand for services as diverse as cloud computing and video streaming. It’s the latest move by big tech companies to take direct control over the infrastructure that the Internet runs on. The new link will run from the U.S. to Spain, and will be operated by Telefonica unit Telxius when it’s ready. However, the two companies will still have their own dedicated cables. They didn’t state the cost of the project, but The Wall Street Journal reckons it will be in the area of $200 million. Keeping the physical capacity of the Internet is a necessary but not a sufficient part of the big data revolution: as we mentioned in yesterday’s newsletter, the legal basis for data transfers is as important–and appears to be under real threat from E.U. regulators.
WSJ, subscription required
• Obama Visits Hiroshima
“A flash of light and a wall of fire destroyed a city and demonstrated that mankind possessed the means to destroy itself.” Barack Obama becomes the first sitting U.S. president to visit Hiroshima, the site of the first ever atomic bomb attack in 1945, in a visit meant to underline the power of reconciliation. Which is not the worst way to prepare for Memorial Day weekend. Obama didn’t apologise for the attack, anxious to avoid giving succour to that part of Japanese opinion which considers the country a victim of World War 2 rather than one of its instigators. Opinion polls suggest the Japanese people were pleased that he visited anyway.