Techs and balances
MARKETS
- What's happening in Venezuela: While many of you enjoyed a regular day at work, opposition leader Juan Guaidó declared himself interim president during a huge rally.
- Part 2: President Trump formally recognized Guaidó as president, which didn't sit well with current leader Nicolás Maduro. He cut off diplomatic relations with the U.S.
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TECH
Big Tech, Big Spending
Do you D.C. readers feel as if K Street has been particularly well-dressed lately? You can thank Silicon Valley for the Hill's recent windfall.
Big Tech siphoned tons of money into swaying lawmakers in 2018, with Facebook, Google, and Amazon together pouring $48 million into lobbying efforts, up 13% annually, per recent government reports.
Start with a zoom out: Per Engadget, "While spending was up significantly among the tech giants, so was the scrutiny being applied to the firms by lawmakers."
- Just a few things on their agenda? The FTC is reportedly considering dropping the hammer on Facebook with a record fine. And while President Trump and Bernie don't agree on much...they both love to chirp Amazon.
Let's check the books
- Facebook and Twitter both broke previous spending records, dishing out $12.6 million and more than $1 million,
- Amazon spent more than $14 million on lobbying, proving once and for all that the cost of a small private island is the same as the cost of addressing your monopolistic tendencies and questionable facial recognition safeguards.
- Google was the group's biggest spender, forking over more than $21 million, a record high. The blockbuster spending year followed Google's $18 million bill in 2017...which was in itself the most any company from any industry spent.
It may not be enough
Money can't buy you happiness....or pull the wool over D.C.'s eyes. Many experts agree that, unlike the government, tech oversight isn't shutting down in 2019.
Both sides of the aisle have proposed restrictions on how tech firms collect and monetize data, plus two committees in the House and Senate have suggested adding more hearings for tech execs to the calendar.
Bottom line: Zuck and his merry band of data-hoarders might want to consider investing in D.C. real estate. Well, to be fair, Bezos already has.
SHUTDOWN
Shutdown Chronicles: Day 34
Dearest mother,
The partial government shutdown is on its 34th day now, and we're closer to MLB spring training than the date this stalemate started.
Here are two developments we're watching:
1. No growth sir! The Trump administration's top economist told CNN that the U.S. economy might see "zero" growth in the first quarter if the shutdown continues through March (but if the government reopens, Q2 growth could be "humongous").
- S&P Global estimates the shutdown will cost the U.S. economy more than $5.7 billion by this Friday, which is the amount President Trump has requested for the border wall.
2. When the going gets tough, the tough get gigging: Federal employees and contractors affected by the shutdown have turned to side hustles to get through these rough times, the NYT explains. They've taken jobs as substitute teachers, yoga instructors, delivery drivers, and more...but it's tough to get hired when an employer knows you're not in it for the long haul.
- Speaking in Davos to CNBC, Uber CEO Dara Khosrowshahi acknowledged the company's seen more drivers in the nation's capital. "We're hoping that this ends," he added.
MEDIA
Condé Gets Nasty
The magazine publisher just announced plans to put all of its U.S. titles—which include Vogue and Bon Appétit—behind a paywall by the end of the year.
Let's run the numbers. Condé Nast lost $120 million in 2017, but said it expects to be back in the black by 2020. The publisher also said it plans to rely on advertising for only half of its revenue by the end of 2022, down from 70% last year.
- FYI: Major publishers have been left little choice but to diversify revenue away from traditional advertising alone, especially in the age of ultra-targeted ads (Alexa, we know you're listening...).
The plan could work
Condé already has metered paywalls on three titles (The New Yorker, Vanity Fair, and Wired), and none of their web traffic has suffered thus far.
Actually, The New Yorker's online audience grew 12% from December 2015 to last month. Not to mention, the title generated ~$115 million in paid subscription revenue in 2018, up 69% in three years.
INTERNATIONAL
Around the World in 175 Words
The tiny island kingdom in the South Pacific (pop. ~100,000) could go without Facebook, YouTube, and other sites for weeks. Not because it's doing a social media cleanse, but because Tonga is suffering a near-total blackout of internet services after an undersea cable was damaged. For a country that depends on web access for supplies and tourism, this amounts to a "national crisis," said one news editor.
Georgia (the country)
If your bitcoin support group meetings are light on attendees, get yourself to the former Soviet republic. Georgia's "betting its economy on luring blockchain technology," according to the NYT, with an estimated 200,000 people having set up mining computers in basements or garages. Cryptocurrency mining likely accounts for 10-15% of Georgia's total electricity demand.
China (the country)
Americans may be materialisti—oooh look, new jeans! But we won't be the world's largest retail market for long. eMarketer predicts retail sales in China will top $5.6 trillion in 2019, beating the U.S. by about $100 billion. Over 35% of those sales will take place online.
AVIATION
Ground Control to Major Tom...
Can you drop us off at the WeWork at 85 Broad Street in the Financial District?
Thanks to Boeing's (+0.20%) up-and-coming autonomous air taxi, hopping into a drone/cab/helicopter hybrid to get to work might not be a fantasy...especially now that Boeing's prototype for its driverless aircraft completed its first test flight this week.
Here's what yellow cabs' next existential threat could look like:
Maybe not as frightening as an Uber...well, until you consider that Boeing's linked up with Uber to map out a plan for a potential "Uber Air" launch by 2023.
The skies will be crowded with competitors
Fellow aerospace incumbents (i.e. Airbus and Textron subsidiary Bell) and tech firms like Intel are all trying to revolutionize the way you commute in the future. Don't worry, we've configured the Brew to load in any atmospheric layer.
But expect turbulence. Air taxis use complicated software that'll require plenty of sign-off from safety officials before it can be implemented in any meaningful way. Per the WSJ, getting that approval could take years.
WHAT ELSE IS BREWING
- BuzzFeed is planning to lay off about 15% of its workforce, or some 250 people, to again get its bearings in the ever-changing digital media world.
- Verizon (+1.35%) is cutting 7% of its media workforce as it tries to revive struggling units including AOL and Yahoo.
- Hulu is lowering the price of its entry level (and ad-supported) TV streaming service...just a week after Netflix upped its prices.
- Uber has officially rolled out its new rewards program in a handful of U.S. cities.
- Procter & Gamble (+4.89%) handily beat Wall Street's estimates for the previous quarter—thanks in large part to its decision to raise prices.
BREAKROOM
Name the Skyline
Chicago. So which city are you looking at?
Extra credit: Can you name the major U.S. corporation that lends its name to the two tallest buildings? It's mentioned in this email.
(Answer located at bottom of newsletter)
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Breakroom Answers
Name the Skyline
Philadelphia and Comcast
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