The Weekly Wrap for Saturday, 3 February 2018

DEEP DIVE DID YOU KNOW: Amazon hasn't always been called Amazon. When CEO and Founder Jeff Bezos first created the company in 1994 he dabbled with a few different options and was set on www.relentless.com until a few thoughtful friends persuaded him to change his mind because it sounded too "sinister". Yesterday the relentless Amazon posted a fourth quarter profit of US$2b. So today we ask, what's in a name. In this week's Wrap we start with the Q4 earnings of Amazon, Apple, Facebook and Alphabet. A potent symbol of Amazon's wealth. PHOTO: Washington Post A huge 2017 holiday period has sent the world's largest online retailer by revenue and market capitalisation (Alibaba boasts more sales by volume) flying. AMZN shares soared 4% on a day when its fellow technology giants also posted some very impressive results. Bolstering the company's net income were invaluable contributions from its powerhouse cloud computing division Amazon Web Services and strong sales of its voice-enabled Alexa and Echo home assistants. The results capped a great week in which the company also leapfrogged Apple and Google to become the world's most valuable brand. So what's next for Amazon? Well earlier this week it announced a new joint partnership with Berkshire Hathaway Inc and JP Morgan Chase & Co to enter the healthcare space. The collaboration intends to reduce the healthcare costs for the three companies' combined 1 million employees, but absolutely no one expects them to stop at that. Little wonder then that healthcare stocks including Aetna, CVS and Anthem slumped on the news. Given Amazon's heft and disruptive potential it's unsurprising that the giant is now dogged by daily controversies, both large and small. As you probably are aware, Amazon's search for a location for its second headquarters has sparked a frenzied bidding war across the States. Yesterday a group of America's top economists signed an open letter lambasting the tax breaks and incentives that competing cities and states are offering (New Jersey offered a jaw-dropping US$7b in incentives). The economists described Amazon's behaviour as both 'anti-competitive' and 'rent-seeking'. Meanwhile in the drizzly climes of downtown Seattle Amazon has refurbished its current headquarters. Among the new developments is a striking set of interlocking biospheres (pictured above) that houses rainforests, as an aid to creative thinking and mental wellbeing. While this commitment to employee wellbeing may be laudable, the company also stands accused of not paying workers in some jurisdictions a living wage, thereby forcing them onto welfare. It is also then able to claim further benefits from state governments for employing people who are on welfare programs. Amazon may have had a record quarter, but it certainly wasn't the only one. Apple, the world's largest company by market capitalisation, reclaimed its crown from Samsung for the most smartphone devices sold last quarter. Despite a drop in sales volume compared to Q4 2016, Apple raked in a record quarterly profit of more than US$20b, largely due to the higher price of the iPhone X. It will be fascinating to see how these figures play into Apple's proposed plan to spend its entire cash reserve of US$163b.  Likewise Alphabet, the parent company of Google, reported more than a modicum of success. A 20% jump in revenue left the company with a very comfortable US$7.7b to spend, which might sound like a great result but it wasn't enough to please Alphabet's shareholders. A one-off tax hit of US$10b cut into confidence over Google's results as did its dependence on soaring advertising revenue (which now accounts for 84% of Alphabet's total revenue).  Like Google, Facebook too reported a gratifying (for them) and scary (for everyone else) 20% jump in its ad business in its Q4 report. Earlier in the week CEO Mark Zuckerberg outlined a new vision for his social media giant, one that will reduce the amount of time users spend on the platform by up to 5%. The market was obviously unimpressed at the change and Facebook shares fell 4% on the news. WORLDLYWISE The American press can't get enough of this Vladimir Putin. PHOTO: AFP Cold War mindsets - Russia has featured exhaustively in news bulletins this week. During his first State of the Union address US President Donald Trump repeated Pentagon talking points that place the Russian Federation (alongside China) as America's greatest military threat. And there is a distinct Cold War-esque tinge to this week's news: Russian athletes mired in a doping controversy, Russian jets flying provocatively close to American aircraft over the Black Sea, Russian submarines snooping around underwater telecommunication cables at the bottom of the North Sea, and the Kremlin engaging in mischief in Syria. Some of this reporting seems reminiscent of the 'Red Scare'. In 2018 it appears that the notion of a nefarious soviet threat is once again alive, or at least it is in the media. The CIA meanwhile seems to have made its peace with the situation; just this week the director of America's foreign intelligence apparatus met with his Russian counterparts at Langley for high-level talks (in contravention of sanctions in place against one them). In the lead-up to the March presidential election we hope to see more detail and analysis about Russia from the press, and less cliché and fear-mongering.  Smoke rises above the port of Aden. PHOTO: Saleh al-Obeidi / AFP Coalition of the unwilling - A marriage of convenience has collapsed in southern Yemen, further convoluting an already complex civil war. In 2015 the internationally-recognised-but-corrupt and ineffectual government of President Abd-Rabbu Mansour Hadi sided with Southern Resistance Fighters (SRF) militias after he relinquished the capital to Houthi rebels. The SRF were seen as strange bedfellows at the time, given that their organisation had advocated for southern Yemen to secede. Indeed, many in the country's south regarded the 1990 unification as a misstep. This week the SRF did their best to wind back the clock, turning on Hadi's forces with a vengeance. The southern city of Aden was wracked by fierce street fighting as both factions deployed tanks and heavy weapons. By Wednesday 38 people had died and several hundred more were wounded. While Hadi's Saudi backers stepped in to defuse the situation, there is growing resentment over the embarrassing fact that the Emirati tanks shelled an airfield held by Hadi's troops; the very same soldiers that the Emiratis were meant to be supporting.   WHAT ELSE HAPPENED Maybe you SHOULD look a gift horse in the mouth. PHOTO: EPA-EFE China was forced to deny well-substantiated claims that it bugged the African Union headquarters (that it built) The Taliban ended January with a pair of deadly attacks in Kabul that left over 100 dead; they now control 70% of Afghanistan A previously-suppressed report on the true costs of Brexit was leaked; it's going to be worse than expected In Australia secret government documents emerged after they were sold, alongside the cabinet they were in, in a furniture sale! Donald Trump's State of the Union address began with a call for unity that then devolved into partisan complaints The Seine spilled its banks in Paris this week as the river rose more than 4m; luckily only 1500 people required evacuation The Pentagon panicked after discovering that 'heat maps' from popular fitness app Strava revealed its secret military bases Investigators in Myanmar uncovered evidence of mass graves in Rakhine state; pointing towards genocide The rift between the FBI and the government widened with the early retirement of Andrew McCabe Ikea founder Ingvar Kamprad died at age 91; curiously a $10b fortune from his global furniture empire was left to no one THE BEST OF TIMES... The champagne finishes will look significantly different. PHOTO: AFP Catching up to the 21st century - Formula 1 racing has never really taken poll position in the race towards gender equality. In fact, its extensive use of sexualised grid- and podium-girls has relegated it to the back of the pack. No longer. After much hand-wringing the F1 has finally canned the long-past-its-use-by-date tradition of having scantily clad women draping themselves over the winners.  Black dog to greyhound - A heartwarming new approach to Alzheimers and dementia care has arrived in Australia (on all fours). Researchers in Canberra are recording the incredible results from using ex-racing greyhounds for pet therapy in aged-care facilities. It works wonders for both the elderly and the dogs; the definition of good news. THE WORST OF TIMES... A die-off in the Atlantic. PHOTO: AFP A chilling trend - Minke whales are washing up on America's Atlantic coast in mass die-offs that are baffling scientists and oceanographers alike. More than twice as many Minke whales died in 2017 versus the previous year. Investigators are probing to see whether these deaths are somehow also linked to unusually high death rates amongst the Atlantic humpback and right whale populations. A story from Afrin - For the first time since the Turkish bombardment of Afrin began we've seen a news report from a western media outlet. The Independent's Robert Fisk has reported the deaths of dozens of women and children in the Kurdish enclave. Which is more concerning: that a NATO member is indiscriminately shelling civilians or that it has drawn almost no interest from global media? P.S. Your weekend long read... This is an absolute corker from The Atlantic. An in-depth look into the truths, the myths and the outright lies about Antarctica's most precious artefact.  Have a great weekend! The inkl team