Talking points
- Germans marked the 30th anniversary of the fall of the Berlin Wall
- Beijing and Washington agreed to partially ease punitive tariffs
- The IMF warned that global debt has surged to $188 trillion
- Trump's future darkened after Sondland and Taylor's testimonies
- 37 were slain in a jihadist attack on a Burkina Faso mining convoy
- The insurgency in southern Thailand reared its head again
- A peace deal was announced for Yemen's war-within-a-war
- Xerox dumped Fujifilm and laid eyes on an HP tie-up
- The ICC handed a 30-year sentence to Congo's Ntaganda
- Vale was slammed for failing to report dam defects in Brazil
Deep Dive
Nearly three billion of us use social media. And we use it a lot: the global average is 135 minutes per day. This attention – packaged and sold to prospective advertisers and marketers – is a goldmine for the platforms that receive it. Like most things, social media is neither entirely good, nor entirely bad. But of late the sentiment toward it has been decidedly negative. So what does the near future of social media look like?
Star power
Our relationship with social media is that of audience, manufacturer and commodity. The complexity of these overlapping roles may be why it's so hard to pin down what is so enjoyable, and repulsive, about scrolling and viewing endless streams of mostly-unvetted content. Whatever one's personal feelings, it's abundantly true that our perceptions of social media brands are shaped by their currency, trustworthiness, user base and interface. But perhaps more importantly, as our youth migrate from platform to platform, is the question: are my friends using it?
Right now the biggest dog in the kennel, FACEBOOK, is almost laughably out of vogue. It's perceived broadly as a place to be served ads, to be spied upon, and to be reminded of your relatives' birthdays. The recent all-caps rebranding has done little to wipe the muck off a company that is routinely pilloried for offensive corporate behaviour. Meanwhile, Twitter remains popular amongst certain quarters (politicians, journalists, racists, social media brand managers, and cocktail-party intellectuals) but is currently overvalued and has not enjoyed great success with its new advertising product. CEO Jack Dorsey has won plaudits by banning political ads from the platform ahead of the 2020 election, but this is by-and-large a jab at FACEBOOK. And Instagram, FACEBOOK's acquisition-of-the-century, has enjoyed great success with its simple format, endless scroll and careful poaching of Snapchat's best features, despite the loss of both its founders.
Sheer power
Despite the teeth-gnashing and hand-wringing about how much power the three aforementioned platforms wield, they are all starting to look long in the tooth next to the latest social media sensation – TikTok. The broadcast-karaoke app from Chinese powerhouse ByteDance is taking over the world. It took just over 100 days for the Beijing-based tech giant to build its local version, Douyin, which launched in 2016. The following year TikTok emerged, an identical product for the world beyond China's shores that, crucially, is not required to abide by Beijing's onerous data-hosting regulations. That was in 2017. Just two short years later, Douyin and TikTok have already surpassed one billion downloads. Not bad for an app that plays looping 3-15 second videos of lip-synching, pranks and (bizarrely, as you can see in the image above) homework.
There must be more than a few people at Twitter who wake up in a cold sweat thinking about TikTok. Twitter after all was once the owner of America's very own short-form video hosting app, Vine, which boasted some 200 million downloads (not to mention a firm foothold in the zeitgeist). But with no easy path to profitability, it was killed off in 2016; a year before ByteDance started working on TikTok. While that story provokes an immediate visceral response (a cringe) it also reveals that no one has any idea what is going to be 'next' in the blisteringly fast-paced world of social media.
Staying power
Having crossed the realm of perception and brand, we arrive at our destination: money. Who's making it and how much have they got? ByteDance booked somewhere between $7b and $8.4b in revenue in the first half of the year, and that's about as much as we'll get out of them considering they haven't gone public yet. Company officials did insist, however, that they make a profit, and that one is expected in the second half of 2019. Pretty good.
Fortunately, Twitter's quarterly reports provide a little more detail: the company is facing "headwinds" that will likely continue into next year. It did take in $824m in revenue, though this was $50m below expectations. With less than 150m users and a slew of technical issues ahead of it, Twitter looks like the puny cousin in this scrap.
Which brings us to FACEBOOK. Who cares about public perception when you've hit a solid vein of gold? It beat third quarter earnings predictions with a whopping $17.65b in revenue . That's year-on-year revenue growth of 29%! Despite the fact that we know that our eyeballs and clicks are being laundered into advertising dollars, some 2.45 billion of us feel compelled to log on at least once a month. And with the Instagram bet paying off (it was a $1b purchase in 2012 and now has 1 billion monthly users) it's no surprise that Mark Zuckerberg's company will continue to see off challengers, old and new.
So what does the future of social media look like? It looks like FACEBOOK's finely tuned advertising engine will fund even more aggressive expansion into other competing verticals, with the dream of one day capturing every single one of those 135 minutes that you spend on social media. It also looks like more frustrated and ineffectual grumbling from pundits. And it looks like a massive spending spree by politicians in the upcoming 2020 U.S. presidential election.
Worldlywise
Softbank's hard times
Masayoshi Son's reputation precedes him. As does that of his globe-bestriding holding company, SoftBank Group . It does not have its fingers in many pies, so to speak, but rather has shares in the bakery, its rival, the oven manufacturer, and the gas company that fires them . It's everywhere. These reputations were burnished in 2017 when Son revealed his $97b Vision Fund, a tech-focused investment vehicle swollen with Saudi oil cash. It lavished billions upon billions on Silicon Valley darlings like Uber and WeWork. But both bets soured: Uber's stock is down 30% since its IPO, and WeWork has bottomed out after a much-publicised collapse. Of WeWork's hard-charging CEO Adam Neumann, Son said, "We created a monster. We gave him all the capital."
This week SoftBank announced a near-$6.5b operating loss – its first in 14 years. Shareholders will have to swallow a $4.6b write-down on WeWork alone. When playing with nearly $100b dollars, it's hard to discern decisiveness from brashness. 20:20 hindsight has shown us that Uber was mostly animated by enormous infusions of venture capital, and that WeWork did nothing bar rent office space. Such observations are low-hanging fruit, though it does bear saying that statistically-speaking the correlation between business nous and venture-capital funding is yet to be proven.
Given that SoftBank is in the middle of herding investors (read: Saudi Arabia) for a second, even larger fund, this could hardly come at a worse moment. The aptly-named Vision Fund 2 is after $108b for bets in AI; though this quarter will undoubtedly have tempered some of the enthusiasm surrounding it.
Too clever by half
As the days grow shorter in the northern hemisphere, so too must the patience of the British electorate. The campaign has begun, and that means door knockers, pamphleteers, and total media saturation. It also meant some interesting developments this week, such as the emergence of a pro-Remain non-competition bloc (the Lib Dems, Plaid Cymru and Greens) and the resignation of Labour deputy Tom Watson. The Tories are campaigning for a deal that the Bank of England knows will undoubtedly hurt the economy . Labour is trying to straddle multiple positions – all non-committal – and is (unsurprisingly) doing a shocking job of it. So much so that two ex-Labour MPs have encouraged the public to vote for Johnson rather than Jeremy Corbyn.
But before we get lost in the thicket of election coverage (six numbing weeks of it), we really ought to pay tribute to the Conservative Party's campaign launch. We'll begin with the infamous recliner, Jacob Rees-Mogg, who suggested that the Grenfell dead had not exhibited "common sense" by obeying firefighters' advice to stay in the building. His ill-considered and insulting remarks were then compounded by another Tory MP who ventured (against a gale of public outcry) that Rees-Mogg is "cleverer" than the Grenfell victims were. Perhaps it was all just an elaborate exercise to distract us from the Welsh Secretary Alun Cairns who resigned under fierce questioning about an aide who had allegedly sabotaged a rape trial. Not exactly an ideal way for Boris Johnson to open his campaign, which he did with a visit to the queen and a battery of lies.
Oh, and then the Conservative Party chair was forced to defend a doctored video that sought to damage Labour. His name? James Cleverly. You really couldn't make this up if you tried.
The Best of Times
Scores level
Earlier this year, as the final whistle was blown in the FIFA Women's World Cup final, a novel chant echoed through Parc Olympique Lyonnais. The crowd roared, "equal pay, equal pay", as a triumphant American team celebrated in the middle. It may just prove to have been an inflection point: this week Australia's peak football body announced that the women's national team would earn the same amount as their male counterparts. Drawing level has never felt this righteous.
A used-car salesman and a fish-monger fill Mumbai's potholes
This is simply a wonderful story .
The Worst of Times
The cartel and the Mormons
Mystery surrounds the gruesome cartel slaying of three mothers and their six children on a deserted stretch of road in northern Mexico. Each of the dead held dual Mexican-American citizenships and were members of a breakaway Mormon sect that set up shop in Chihuahua in the 19th century. The victims' nationality and religion are, sadly, the only newsworthy facets of this story. Cartel killings are not just commonplace in Mexico, they are a part of everyday life. Right now the government is struggling to work through a backlog of 30,000 unidentified murder victims , while another 40,000 victims are still missing.
Your monthly warning
Last month was the hottest October in recorded human history. Can you hear that bell tolling?
Weekend Reading
Quote of the week
"We're not in the news business. We're not trying to do 'truth to power'. we're trying to entertain."
– Netflix CEO Reed Hastings gave a forceful, if belated, account of the decision to withdraw contentious material from the platform in Saudi Arabia. One mustn't be entertained by criticism of the Crown Prince, after all. It turns out that digital platforms don't frolick in the boundless meadows of a borderless cyber-utopia as we were once led to believe they would; instead, they are bent by the dirty realities of state power in our temporal plain – just like everyone else.
Headline of the week
Microsoft Japan sees 40 per cent productivity increase after introducing three-day weekend.
– Evening Standard (hint, hint).
Special mention
Yvette Lundy, a titanic figure of the French resistance, died this week aged 103. Read her story .
Some choice long-reads
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Rolling Stone enlists itself for action ahead of the streaming wars
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Businessweek finds a sorry scene when the house lights come on after a K-Pop gig
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The Economist sits down for a long, dark conversation with Emmanuel Macron
Tom Wharton
