Some interesting stories to call your attention to this morning that illustrate how distinctions between industries and distances between countries are disintegrating in today’s rapidly evolving business world.
First, China’s ride sharing service Didi Chuxing – formerly Didi Kuaidi – said it had accepted a billion dollar investment from Apple as part of its latest funding round. Didi is in a fierce battle with Uber for Chinese market share, and both companies are estimated to be losing as much as a billion dollars a year doling out driver and rider incentives. Apple’s Tim Cook said the company is making the investment “for a number of strategic reasons.” He didn’t elaborate, but here are two possibilities: A partnership with Didi can help drive adoption of Apple Wallet and Apple Pay services in China. And access to Didi’s massive cache of data about Chinese traffic and roads could help Apple develop autonomous driving services.
Meanwhile, Monsanto seems to have gone from predator to prey this morning, in its effort to team up with a chemicals company. Its bid for Syngenta was rebuffed, but now both BASF and Bayer are reportedly exploring bids for the company. The goal is to create a full suite of services for the farmer that includes seed, chemicals, and data. I’ll be interviewing Monsanto CEO Hugh Grant – as well as Dow CEO Andrew Liveris – next Tuesday at our Brainstorm E conference in Carlsbad, California, so expect to hear more then.
Finally, Verizon’s nasty labor fight has gone global. The company has been hoping to shift some of its call center work to the Philippines. But instead, workers in the Philippines have used Facebook to reach out to U.S. strikers, prompting a visit from a labor delegation that ended in a bizarre car chase on the streets outside of Manila. Fortune’s Aaron Pressman has the story here.
More news below.
• All the News That Fits the Worldview
Mark Zuckerberg said he plans to invite leading conservatives “and people from across the political spectrum” to talk about allegations of bias in its editing of the “Trending Topics” of its social network. The news comes after The Guardian published internal documents from the company that show how broadly humans are involved in selecting the content that its billion users see every day. The company’s guidelines are very similar to a traditional news organization’s, with a style guide reminiscent of the Associated Press guide, a list of trusted sources and instructions for determining newsworthiness. Facebook had moved away from a pure-algorithm approach in 2014 after criticism that it had not included enough coverage of unrest in Ferguson, Missouri, in users’ feeds. Fortune
• GOP Rapprochement, Clinton’s Vulnerability
Donald Trump met with the top brass of the Republican Party in an effort to bridge their differences and concentrate on stopping Hillary Clinton taking the White House in November. House Speaker Paul Ryan, the GOP’s most senior elected official, still refused to endorse Trump after the meeting but said they had agreed on certain core issues such as the appointment of conservative Supreme Court judges and opposition to abortion. Over in the Democratic camp, Clinton’s vulnerability to issues of ethics and governance was again exposed by the news that the Clinton Global Initiative, a non-profit foundation with the official mission of improving the world, set up a financial commitment that benefited a for-profit company part owned by political and personal friends of the Clintons. A spokesman for the foundation called it “mission-driven investing…a common practice in the broader philanthropic space. Wall Street Journal, subscription required
• Nordstrom Is No Amazon
Nordstrom rounded off a thoroughly miserable week for traditional retailers, reporting a 7.7% drop in sales at its stores and a sharp slowdown in growth in online sales in the first quarter. After equally dismal announcements from Macy’s and Kohl’s this week, the market was in no mood to give it the benefit of the doubt and drove its stock price down 15% in after-hours trading. Nordstrom has tried hard to square the circle of being a high-end (and thus exclusive) operation while trying to maximize sales volumes through its online operations. It appeared to have given up trying to reconcile the two yesterday, with CFO Michael Koppel telling a conference call that it would cut its online assortment and not raise the amount of money it’s investing in the online channel. Fortune
• Russia’s Doping Mastermind Drops A Bomb
The scale of Russian doping at the Winter Olympics in Sochi in 2014 was far greater than thought so far, according to the disgraced scientist who ran the relevant labs. Grigory Rodchenkov fled Russia fearing for his safety after two of his associates, who had been named alongside him in the World Anti-Doping Agency’s initial report into Russian doping in November, died unexpectedly within weeks of each other in February. According to material from a forthcoming documentary seen by the New York Times, Rodchenkov ran a meticulously planned system to cover up wholesale use of performance-enhancing drugs by many of Russia’s medal-winning athletes. The new claims will raise further questions about Russia’s participation in the summer Olympics in Rio de Janeiro later this year (its track & field team is already suspended from international competition), and will give further ammunition to those looking to strip it of the 2018 FIFA World Cup. Russia’s Sports Minister Vitaly Mutko, who was accused in WADA’s initial report of directly giving orders to manipulate athletes’ urine samples, called the new revelations “a continuation of the information attack on Russian sport.” Naturally. NYT
• Another SWIFT-Based Heist
SWIFT, the financial messaging system that banks use to move billions of dollars every day, said it has been made aware of a a second malware attack similar to the one that led to February’s $81 million cyber-heist at the Bangladesh central bank. This one targeted a commercial bank in Vietnam, according to researchers at BAE Systems, and it’s not clear how much was stolen. The Belgium-based cooperative told its members that “the malware used in the earlier reported customer incident was not a single occurrence, but part of a wider and highly adaptive campaign targeting banks.” It stressed that its own network and core messaging systems haven’t been compromised, and that it wouldn’t accept liability for any failings in the banks’ own cybersecurity. Fortune
• Move Over, Apple
It may be just a statistical blip, or it may be the kind of moment that historians look back on in future as emblematic of a huge shift in consumer trends. Apple lost its crown yesterday as the world’s most valuable listed company to Alphabet, the parent company of Google. As with the investment in Didi, it is an indication of how the market for hardware is becoming saturated, and how software, content and related services are becoming the key drivers of value. Apple’s market value has fallen by nearly one-third from its peak last year, while Google (and its fellow-in-services Amazon) have gone from strength to strength, reaching a market cap of nearly $495 billion. Obviously, by this logic, when Saudi Aramco lists with its projected valuation of $2 trillion, we’ll have to amend our rhetoric and welcome back the hydrocarbon age, but until then, it’s good luck to Larry Page, Sergey Brin and crew.
• No Blacks, No Women, No Dogs, No Irish, Thank You
Brazil–the country of the future, as it has liked to style itself ever since independence nearly 200 years ago–is taking a trip back into a very recognisable past, one that puts it at odds with, well, most of the rest of the world. Acting President Michel Temer’s first act after taking officer Thursday was to name a new cabinet exclusively made up of middle-age or elderly white men. After 13 years of boom and bust under Lula and Dilma Rousseff, the message that ‘we’ve had enough of this reckless experiment of giving power to blacks and women’ could hardly be clearer–and this in a country which is majority non-white. For a country that’s very much in the spotlight due to the upcoming Olympics and the Zika virus (to say nothing of its regional importance), it’s a poor message to be sending. Fortune
• There’s Hope For Us All After All
After a week when storied retail names have been competing with themselves to send us the gloomiest news possible, we’re glad to report that at least there’s still one company that can be relied upon to improve the human condition. Burger King is experimenting with installing spas at its restaurants, albeit only in Finland for now. The spa is located on the ground floor of a Burger King location in Helsinki. It includes a 15-person sauna, which, according to its website, is perfect for “social gathering or work.” Another sauna fits 10 guests and is equipped with a 48-inch screen television. The rooms are decorated in Burger King fashion with red and blue benches, towels adorned with the familiar logo. Because there’s only one thing better than a sauna, and that’s a sauna with a Whopper and onion rings. Fortune