Rupert Murdoch vs Google

In the blue corner is Rupert Murdoch, the media tycoon – Chairman of Newscorp, owner of The Times and the Sun in the UK and New York Times in the US, and the TV Channels Sky, Star and Fox News. In the red corner is Google – the titan of the on line world. The bout has begun.

In question is the issue of on line news – who owns it, who pays whom for it, etc etc. Now we are perfectly willing to pay a few rupees, or cents or yuan for a newspaper, but are absolutely not prepared to pay a penny for the same newspaper on line. Confess it – you haven’t read the newspaper today. Instead you browsed on line. I did too – at least my excuse is that the single English newspaper, where I live, is not worth reading! What’s yours ?

Murdoch says Google and such other news aggregators are freely linking to news content that his newspapers create and then get advertising revenue for it and to rub salt into the wounds, charge the papers for sending readers to it. They have news pages which attract readers by aggregating content, but they don’t pay the content creators for it. Kleptomaniacs, thunders Murdoch.

Google says the old man just doesn’t get it (of course not in those words). They say the on line world is a new world, traditional newspapers are dinosaurs, their business models are broken and that the on line world is comprised of “free” information and that’s the way it will be.

Now Murdoch has a point. Credible content that newspapers create cost money. They have to have reporters in every corner of the world, they have to edit pieces, etc etc. Contrast that against the writings in this blog, which costs nothing to create, but is usually unadulterated twaddle. So Murdoch says, his news is intellectual property and cannot be stolen by content aggregators.

He is therefore going to Microsoft , trying to negotiate an exclusive arrangement with Bing and simply exclude Google.

The problem is that newspapers are declining all over the world. In a few years, newspapers may go the way of Readers Digest – a quaint oddity for the geriatrics. Newspapers went online but have made it free – only the FT and the Wall Street Journal have managed to charge for it. So their revenues are in serious decline.

Its easy to brand Murdoch as an old foggy and that he doesn’t understand the online world. I don’t think that’s true – he’s a shrewd businessman who understands it all too well and is picking up a real fight . After all remember they said the same thing, at the peak of the dot com boom, about an old geezer called Warren Buffet.

The day when India was on top of the world

One of the greatest of days in Indian sport , to me THE greatest day in Indian sport, was the day in March , long ago, when India lifted the hockey World Cup in Kuala Lumpur. India beat Pakistan in the final to win the World Cup for the first, and alas thus far the only, time.

The greatest day was actually not the final win. By the day of the final, it seemed pre ordained that India would win. The day came on the semi finals, just a day earlier. India played Malaysia on their home soil It was on a rain sodden pitch early in the morning (those days they played hockey on natural turf). It was a classic, which will remain in the memory of every Indian sports fan who was around then. There was no TV , of course, so glued to the transistor radio, listening to Melville D’Mello and Jasdev Singh, we followed the match.

The Indian team was an all star team captained by the immortal Ajitpal Singh. I can still get the full team more or less right – Leslie Fernandez in goal, Surjit Singh and Michael Kindo the starting full backs, Virender Singh, Ajitpal Singh and Mohinder Singh the half backs and the forward line of Phillips, Ashok Kumar, Shivaji Pawar, Govinda and Harcharan Singh.

Malaysia were playing way out of their skin, in front of a partisan capacity crowd. They led 2-1 well into the second half. India was virtually camping in front of the Malaysian goal. But the equaliser eluded them. They forced penalty corner after penalty corner. Surjit Singh, who was usually brilliant in taking the corners, just could not score that day. His hits were being frantically saved, somehow. The commentators were besides themselves as corner after corner was taken. Govinda ne push kiya, Ajitpal ne roka aur Surjit ne hit kiya (in 1000 decibels) … lekin …. The goal would just not come.

I vividly recall the feeling of absolute gloom. Two years ago in the finals against the Netherlands, exactly the same thing had happened. India was sitting in front of the Dutch goal, but could not score the winner and ultimately lost in the tie breaker (heart breaker). Was it going to happen all over again ? Surely the fates wouldn’t be so unkind.

8 minutes to go. India made a substitution. They replaced Michael Kindo with Aslam Sher Khan. They continued to besiege the Malaysian goal. Got two more penalty corners. Surjit hit them hard and straight. And yet the goal would not come. 3 minutes to go. By then I had lost all hope and was in tears, with the transistor still glued to the ear. Melville D’Mello was commentating. Yet another penalty corner. This time Ajitpal signaled Aslam Sher Khan to step up. Surjit was having no luck today. Govinda went to the goal line to push. Ajitpal to stop and Aslam to hit. The push came, Ajitpal stopped it dead on top of the circle. Up stepped Aslam. Cracked it true and hard. GGOOOOAAALLLLL. Even the normally suave Melville D’Mello went berserk. India had equalized.

From then on it all seemed pre ordained. India duly got the winner in extra time. And in the finals against Pakistan the next day, it seemed inevitable that India would win. Even the Gods had decided that it was India’s turn this time. Ajitpal was majestic. Fittingly, Ashok Kumar, son of Dhyan Chand, the greatest hockey player of all time, got the winner.

India was on top of the world.

Flights of fancy

Of all the markets in the markets in the world, one of the most nonsensically regulated is the air travel market. Countries are still clinging on to the antiquated notion that somehow national interests are involved in the aviation sector and “national airlines”, however dinosaur like they may be, must be propped up.

This post is prompted by the news that Germany has asked Emirates to raise its business class fares for flights out of Germany. Emirates, faced with big fines, has been forced to raise its rates by some 20%.

Airlines flying in and out of Germany are policed by the unfortunately named Federal Office for Goods Transport. This august body has written to Emirates saying it was “not allowed to engage in price leadership" on routes out of Germany to non-EU countries. Apparently it was acting under a law used in cases where "public transport interests are being permanently damaged". Apparently European carriers can indulge in “price leadership”. Only non EU airlines should not. Have you heard of the R word ?

Can you believe that such words are being mouthed in the 21st century . Its easy to see behind the fig leaf. Lufthansa has simply arm twisted the authorities to prevent Emirates from undercutting it.

The most closed of markets in the world is the airline market. Who can fly where is governed by complex inter government agreements. Slots at airports are jingoistically protected. All sorts of tariffs are levied. Sick airlines are state supported. It’s a complete mess.

The EU is frankly one of the most blatant of cartels that exists. The EU has no business lecturing anybody on free trade. It is supposed to be the largest economy on earth, larger than the US. But then its not a nation – its just a cartel. And look at what it has done today. Supposedly democratic, it has taken a leaf straight out of Stalin’s notebook. Behind closed doors, some 20 odd people, in classic skulduggery, have chosen Herman van Rompuy as its President. Herman who ??

In the middle of it all is the poor consumer. Although you could argue that by definition an airline customer is not poor. But that’s no excuse for governments to conspire to screw him. Free the airline market around the world. And hey presto – fares will fall AND customer experience will improve. Heard of free trade and competition Mr van Rompuy?

Romance is in the air

This seems to be the season for whispering sweet nothings. K and C are engaged in a very public courtship as I blogged here – its progressing at such a snail’s pace that its probably more exciting to watch grass grow. K has threatened to abduct and carry away C, and C is saying “bah” as women are wont to do !

But there’s another rumour doing the rounds. Yesterday curious things happened with Colgate Palmolive’s share price. The speculation is that Reckitt Benckiser (makers of Dettol) and Colgate Palmolive (makers of, well, Colgate) are looking coyly at each other. It appears that Reckitt is sending strong signal that he/she is ready to marry. What is not clear is who the target of its affection is. Is it Colgate, or is it SSL (makers of Scholl and Durex) ?

If its Colgate, then its not clear who is the bride and who is the groom. For they are both roughly equal. It's supposed to be a marriage of equals. But then women’s lib has not yet reached the corporate world where the tradition of the man abducting the woman and running away with her is the usual norm. So who will pop the question and who’ll say Yes, is not clear.

It is also rumoured that Colgate does not really want to marry. But then its perhaps scared of that stodgy, old man (wheeze, wheeze) who’s much bigger, has a bigger fortune and is capable forcibly lifting her up and running away with her. So why not this strapping Reckitt, who at least is of the same age and has similar taste in music – both like P.Diddy rather than Harry Belafonte which the old man likes. You get the drift …

Why is romance in the air ? Consumer goods companies are struggling for growth. They are being ripped apart by retailers who sell their own brands for a lot less than these companies (after all somebody has to pay for all the ads they air). Then come the discounters who are refusing to stock their products at all. Consumers reeling from the recession are penny pinching. All told, general misery. So the hope is that by marrying they can share the costs (like having only one house, like sharing the same bed, …. because businessmen have to invent important sounding words, these are called synergies). And the stodgy companies who stayed in Europe and North America have belatedly realised that they are in the Old World and that the New World is in China, Brazil, India, Indonesia and the like. Since they are scared of venturing into such strange lands on their own, why not marry somebody who’s already there.

So will Reckitt or Colgate pop the question to each other ? Who can fathom the minds of people who are all dewy eyed (Sri, are you listening ?!). The papers will make interesting reading.

Is the consumer a king or a tyrant ?

“Remove baby before folding the stroller “ is a famous example of the American legal system gone crazy. It remained an object of mirth until it became all too real last week. For, Maclaren, a small privately held maker of baby strollers was faced with a massive crisis on a similar sort of a problem.

Maclaren’s strollers are actually of a reasonably high safety standard. However it appears that when the stroller is being unfolded, if a child sticks a finger into the hinge, its likely to chop off the finger tip. This is not a state secret that normal human beings are unaware of. Any parent, however dumb, is well aware that if a child sticks its finger into a hinge, it will get hurt. However there was no warning on Maclaren strollers that children must be kept away when opening it. And the product is "unsafe". So the company is responsible.

There were 12 instances of such an event happening. The company is now recalling 1 million strollers sold in the US – or atleast providing repair kits to the owners. Now 12 cases in a million is 0.001%. The probability of being struck by lightning is higher. But never mind, the company is a big bad evil monster and so mob lynching is perfectly acceptable.

Reams of newsprint (or should I say, bytes) are being written on this case. Media has used “amputations from strollers”, “child amputation” and the like to lampoon the company. A million words have been written about the company being slow to react, PR disaster, etc etc. I haven’t read one word to say that perhaps this is a overreaction and the consumer is also, just a teeny bit, at fault.

I can understand when there’s a defective or dangerous product – the company must be taken to task. The product must be recalled immediately; period. But this is just a normal stroller – sure its safety can be improved by providing a protective cover over the hinge. But , by itself, the product is not unsafe. Is it then right to force companies to recall millions of products sold over a long period of time ? Today there is no choice for companies. Immediate product recall, whether justified or not, is the only sensible option – else the PR disaster will be so big that the company may probably not survive.

That doesn’t make it right. Where is the notion of sensible consumer responsibility ? One consequence of this is the silly sort of warnings (like coffee is hot) that companies have to print to "inform" consumers. How about differentiating between genuinely defective or unsafe products and ones where usage with common sense is perfectly fine, but careless usage will create a problem. Does a product have to be designed for the average consumer , or the absolute lowest common denominator?

The consumer is the king. I know. But what if he turns into a tyrant ?

The continuing idyll of our yuppie

Our city bred yuppie has settled down into the village, mastered the art of managing without plumbing and has been proposed to. If you’ve missed this story of a couple of weeks ago, click here.

Statutory warning : This is a X rated post. Youngish readers and those with sensitive feelings please leave now !!

Of course the company has not put him here to bask in the adulation of the village belles. He’s supposed to do some work. Like organising a cattle camp.

My good friend Aashish, who comments often in this blog, observed that I seem to have a peculiar fascination for matters bovine – considering the number of times this venerable creature has appeared in what is ostensibly a business blog. I must confess that I hadn’t thought about it, and now that he has said it, am guilty as charged !

Now, in this part of the country, the buffalo is the family’s most prized possession. Therefore the cattle camp is the most important "village development” exercise that he can undertake. What our yuppie hasn’t realized as yet, is that the cattle camp is also the most blatant sex show on earth !!

There are only two objectives in a cattle camp. To castrate the bulls and impregnate the cows. Our yuppie is to participate whole heartedly in the process ; he realises belatedly that his ratings depend on his performance in this orgy, although of a different kind !

The bulls are being led away to one side of the camp. They are lined up one by one to be emasculated. One randy specimen has broken away – he charges vigorously to the cows shepherded on the other side, for the one last fling of his life. He’s promptly caught and brought back, only to be pushed to the head of the assembly line. The logic of this exercise is that bulls, when not motivated to oogle at a shapely cow, will instead work harder. Now, I wonder how come Hitler, Stalin, and the lot, did not consider this angle, when it came to the human race. Although, it must be said that right through history, many kings seems to have grasped this wisdom. Our yuppie’s face is beet red. He has “performed” , at best, an average job. There’s much tongue clicking amongst the wise and the elderly on city bred types who can’t even do a simple job properly.

The scene at the cows end is even more interesting. Humans have decided that its much better to impregnate cows artificially than allow matters to progress naturally; a curious logic considering the number of able bodied bulls at the other end of the field. On one hand you castrate eager bulls who are all too ready to do the job for free. On the other hand, you procure the elixir of life from an unknown stud, of mythical qualities, transport it in liquid nitrogen (global warming and all that), at the cost of an arm and a leg. Whoever said that there was native common sense in the villages ?

The process begins with determining which of the cows are “ready”. I shall pass lightly over this process in order not to offend readers’ sensibilities – suffice to say that the process involves shoving a whole arm up you know what, an act our yuppie is flatly refusing to do; job rating or no rating. The cow’s owner is looking on anxiously. If the verdict is a no, he has come in vain. If the verdict is a yes, he seems to experience the state of heightened euphoria, which is more usually associated with the performer in matters amatory.

The “no” cows have melted away. The “yes” cows are then helped along in their ostensible purpose in life – to bear calves and produce copious quantities of milk. Would our yuppie, at least participate in this – having baulked at the previous step in the process which has resulted in extreme hilarity amongst the onlookers. Knowing that his job is on the line, and with a face akin to an overripe tomato, our yuppie fetches the straws from the liquid nitrogen container and assists in the creation of life !

Evalauation time. The young man is given a C. He has avoided getting fired from his job. In the process , he has brought much merriment to the village folk and has added to the repertoire of folk tales in the village. Fair deal. But he is rather quiet these days.

When good politics was better than good economics

Yesterday was 9/11, written in the British way. It is as momentous a day as its American equivalent is tragic. For it was on this day, 20 years ago, that the Berlin wall collapsed. And Europe would never be the same again.

A trillion words are being written about the event and the celebration and the hoopla surrounding it. This blog is loath to add to that total, and in any case is not a political forum. Instead we will touch upon one of the most interesting aspects of the reunification at that time, the currency unification.

The word German reunification is actually a politically correct, but not factual, term – in reality it was an acquisition of East Germany by West Germany. When German reunification happened, the black market rate between the mighty Deutsche Mark and the Ostmark (East German Mark) was 1 to 5. The Ostmark would be abolished and instead the Deutshe Mark would be the currency of the new Germany. But then, at what rate do you convert the existing Ostmarks of East Germans ?

Economists fell over each other to proclaim that the exchange should happen at the fair value, which was the black market rate. They warned of huge inflation if it was converted at a rate better than the true rate. They also warned that if East German wages were reset in Deutsche Mark at anything other than the fair rate, East German industries, with their low productivity, would be outpriced, go out of business and result in high unemployment. Dire consequences were predicted by the economists.

The politicians however cared two hoots for the economists. Germany was in euphoria. It was one country, once again. The cold war was over. It was a momentous time. They grasped in a second that for the reunification to succeed, there must not be social upheaval in the East. They fixed the exchange rate as 1 Deutsche Mark to 1 Ostmark for upto 4000 marks and 1 to 2 thereafter.

Economists were outraged. Doomsday scenarios were predicted for Germany. East Germans were , as you would expect, mighty pleased. They embraced reunification wholeheartedly. West Germans were in fact giving a massive subsidy to East Germans. While there may have been some grumpiness at this, there wasn’t fierce resistance from them.

No doomsday scenario emerged. Inflation didn’t rocket up. Sure there was some pain and perhaps some prolonged impact on the German economy, but pick up it did. This was the best way to have handled the reunification – any other alternative might have been far worse. For once political logic triumphed over economic logic.

Look at Germany today. It is the engine of Europe, much as the British or the French might like to think otherwise. We go gaga over China, but even last year, the world’s largest exporter was Germany, not China. Despite all the chronicling of Germany’s economic woes, almost every country would give an arm and a leg to trade places with Germany.

But back to 1989. On that fateful day thousands of East Germans joyously crossed into the West. Amongst them was a 35 year old lady. Her name – Angela Merkel. Today she is the Chancellor of Germany. It probably wouldn’t have been possible, but for the fact that the politicians were right and the economists wrong.