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Good morning. Alan Murray here, still filling for Adam. (Hang in there; just one more day.)
I interviewed Hillary Clinton yesterday on the stage at the annual summit of the Shared Value Initiative, an organization started by Harvard’s Michael Porter and his partner Mark Kramer to encourage businesses to focus on having a positive impact on society as part of their core business strategies.
Clinton, you will recall, famously acknowledged “I’m a capitalist” during her heated primary campaign with self-declared socialist Bernie Sanders in 2016. “Did that hurt you in the primary?” I asked yesterday.
“Probably,” she replied.
Clinton said the reputation of business was in tatters after the 2007 financial crisis, particularly among young people, with polls showing majorities that didn’t share her allegiance to capitalism. Among all Democratic voters in Iowa, she said, more than 40% said they didn’t believe in capitalism.
“I support hard work, risk-taking, and entrepreneurial energy,” she said. But the current system is out of balance, with too much power tipping “toward (the) biggest companies with the most influence… They’re disrupting our democracy.”
She encouraged the group to continue its efforts to demonstrate that business has the ability to address social problems and to increase its positive impact on society.
Speaking of positive impact, Facebook CEO Mark Zuckerberg continues to struggle to define exactly what that means for the social media giant. His meeting with news executives this week led to conflicting opinions about his understanding of the company’s role in providing people with reliable news, which you can read here and here.
And then there is Elon Musk, who is so convinced that he is doing good in the world that he doesn’t need to answer analysts’ “dry” questions.
More news below.
Playing a sad song. After its unusual listing process, Spotify falls into line with every other public company and joins the quarterly earnings dance. First quarter revenue increased 26% from a year ago to $1.4 billion and the net loss was nearly unchanged at $202 million. Premium subscribers increased 45% to 75 million. It wasn’t enough to meet Wall Street’s expectations and the stock was off 9% in premarket trading on Thursday. Mobile payments provider Square also disappointed, even as its net revenue grew 45% to $669 million. Investors didn’t like the forecast of $750 million of revenue and adjusted EPS of 10 cents for the next quarter and the shares dropped 6% in premarket trading. Finally, wearable maker Fitbit also disappointed with its upcoming quarter forecast and its shares were down 6%.
Exerting influence. Seattle is considering imposing a new 0.7% payroll tax on large employers to fund affordable housing programs and reduce homelessness. The City’s Chamber of Commerce is opposed and Amazon apparently isn’t pleased, either. It put a new 17-story office tower project on hold, citing the upcoming tax vote. Cities bidding for Amazon’s HQ2 take notice.
Boo hoo. The political consulting firm at the center of the Facebook data scandal, Cambridge Analytica, is shutting down and filing for bankruptcy. The company, which obtained personal information about millions of Facebook users, said it “has been the subject of numerous unfounded accusations and, despite the company’s efforts to correct the record, has been vilified for activities that are not only legal, but also widely accepted as a standard component of online advertising.” Executives from the failing firm along with its financial backers from the Mercer family have already started a new company called Emerdata that could be a “rebranding” effort, the New York Times reported.
Stifling a yawn. Two of his main competitors may be merging, but Verizon CEO Lowell McAdam sounds almost like a Westworld android saying “it doesn’t look like anything to me.” His actual quote on the T-Mobile-Sprint merger: “We don’t care, is the answer to that. Maybe the fourth time is the charm here, I don’t know.”
To infinity and beyond. Mobile gaming has not been a major part of Nintendo to this point, but incoming president Shuntaro Furukawa says he wants to make smartphone apps more of a priority. He’s aiming to grow Nintendo’s mobile unit into an operation worth 100 billion yen, or almost $1 billion, per year. They’ll have competition from a new Google-backed startup called Arcade, which is focusing on developing trivia and other social games.
How do you like them apples? Sticking to Asian companies and the mobile market, Chinese phone maker Xiaomi filed to go public in Hong Kong and raise up to $10 billion, which would easily rank as the largest initial public offering of the year and third all-time among tech companies, trailing only Alibaba and Facebook. Revenue grew 67% last year to $18 billion and profit excluding one-time charges was $840 million.
Spreading knowledge. Changes to copyright law in 1998 greatly extended the rights of authors and, as a result, few works entered the public domain in the United States for two decades. That changes on January 1, 2019. The Atlantic has the story, with this fantastic lead: “The Great American Novel enters the public domain on January 1, 2019—quite literally. Not the concept, but the book by William Carlos Williams.”
FOOD FOR THOUGHT
Necessity may be the mother of invention, but intellectual property rights keep the money flowing. Popular Mechanics has a wonderful feature examining 15 patents that “changed the world,” ranging from the iPhone to the satellite GPS network. Here is their explanation of one of the most important self-driving car patents, called “Vision system for an autonomous vehicle.”
IN CASE YOU MISSED IT
Apple Analysts Offer Mea Culpas After iPhone Sales Hold Up By Aaron Pressman
Amazon Is Prepping These Whole Foods Discounts for Prime Members By Don Reisinger
While Facebook Flounders, Women Build Their Own Social Networks By Valentina Zarya
BEFORE YOU GO
The storyline from a classic 1980s film, The Karate Kid, is getting new life thanks to YouTube Red, the Google service’s subscription program that funds original series. Called Cobra Kai, the new series brings back the stars of the original movie, Ralph Macchio and William Zabka, to see how their characters are faring in current times.