Alibaba v. Tencent, Trump Border Order, Jacinda Ardern Baby: CEO Daily for June 21, 2018
While the trade war between the U.S. and China is playing out in tariffs on dishwashers and soybeans, the fight that really matters is the one for technology dominance. And while U.S. tech companies currently have the lead, two men named Ma—Jack and Pony, the heads of Alibaba and Tencent, respectively—are determined, with the help of the Chinese government, to change that.
Neither company is truly global—each gets the lion’s share of its revenue from inside China. Yet both are valued at near a half trillion dollars, and both have developed areas of excellence where they surpass their U.S. colleagues—Alibaba in e-commerce and online finance, Tencent in chat and gaming. Perhaps more importantly, both have become huge engines of capital for Chinese tech startups. The two have completed more than 450 acquisitions and venture investments in the last three years.
That’s why you should take the time to read Adam Lashinsky’s fascinating piece on the two Mas, which is running in the July issue of Fortune magazine but is available online here. Lashinsky looks at the rivalry between them—which we witnessed first-hand at the Fortune Global Forum in Guangzhou last December—and how it will shape the future of global business. Today’s must read.
More news below, including President Trump’s decision to abandon his policy of separating illegal immigrant children from their parents at the Southwestern border.
After repeatedly denying that he could personally stop family border separations, President Donald Trump yesterday did just that. He caved to mounting political pressure with an executive order that halted the separations by detaining parents and children together for an indefinite period. While the order prevents future separations, it does not address the plight of the more than 2,300 children who have already been detained apart from their parents. New York Times
New Zealand Prime Minister Jacinda Ardern gave birth to her first child, a girl, today. She's the first elected world leader to give birth while in office in nearly 30 years. She will take six weeks of maternity leave, returning to office in August. In the meantime, she's passed her duties on to Deputy Prime Minister Winston Peters. Fortune
Cutting Bureaucracy Bloat
The White House today is expected to propose combining the Education and Labor departments into one federal agency, the centerpiece of a plan to shrink a bureaucracy the president says is bloated. The plan is likely to change the way the government doles out benefits to poor Americans—an area long-targeted by conservatives—by consolidating safety-net programs under one agency. Washington Post
It's a Match
Match Group, the dating app giant behind Tinder, has acquired a 51% ownership stake in Hinge, another dating app that's especially popular with millennials. The move comes as Match faces competition from social media sites like Facebook, which last month said it would enter the online dating market. There's a bit of irony to the deal in that Hinge had marketed itself as the anti-Tinder—an alternative to the casual dating scene. Financial Times
Around the Water Cooler
A Healthy Choice
The new health venture by JPMorgan Chase, Berkshire Hathaway, and Amazon announced its CEO yesterday. Surgeon Atul Gawande got the gig; he'll start in July. Fortune Editor-in-Chief Clifton Leaf explains why he's the perfect choice. Fortune
Cozying Up to Uncle Sam
When Jeff Bezos founded Amazon, he sought to keep a good distance from the government, at one point suggesting moving the company's headquarters to an Indian reservation to save on taxes. The Wall Street Journal has a look at how things have changed since then, as the e-commerce giant has become deeply entwined with the federal government. Wall Street Journal
Game of Leapfrog
Facebook CEO Mark Zuckerberg is on the brink of leapfrogging Warren Buffett to become the world's third-richest person. The Facebook CEO is now worth $81.3 billion; his fortune has ballooned $8.5 billion this year as Facebook rebounded from the data-privacy crisis that briefly sank its stock. As of yesterday, his net worth trailed Buffett's by $725 million. Bloomberg
Seattle's Last Straw
Starting July 1, restaurants in Seattle must stop offering plastic straws and utensils as Seattle becomes the first large city to ban such products. The city passed a ban on single-use disposable food-service items back in 2008, but utensils and straws were exempted until the market matured to provide affordable and effective alternatives. The city says that time has come. Fortune