Muddying the Waters in FB ... and Moscow

Today we read that Facebook intends to merge, in systems terms, various functions across various of the platforms it owns - FB, Instagram, WhatsApp, Messenger, etc - in order to make it harder for regulators to split the company up, Standard-Oil style.  (Google, incidentally, spotted this wheeze a long time ago - and it cost them an astonishing amount of development $ to achieve.)

Reminds me of a similar but lower-tech story from my days in Moscow.  Gazprom, inevitably, was my main counterparty and I was in their fine new offices a lot.  My Russian staff used to get me to buy fresh bread rolls from the canteen there - the Moscow City bakery only baked twice a week, but Gazprom's operated every day! - and to make this easier, they procured for me (I never quite knew how) a Gazprom pass ...

I was professionally very keen to get an accurate company organisation chart for the sprawling giant.  I was supposed to conduct all my dealings through the Protocol department, but after I got a bit of a presence in the company, people would just invite me in for a chat (out of sheer curiosity, as much as anything: I didn't conduct my affairs in quite the same way as many expats).  I had several memorable (and quite candid) encounters that way, which may be posts for another day.

Anyhow, I asked for the org chart, and was given this bizarre diagram, several times more complicated than the tube map of London, with dotted lines criss-crossing everywhere.  It was of course designed to indicate that there was no such thing as a modular division within Gazprom, oh dear me no: nothing that could be identified as a candidate for breaking off and floating separately - a fate which Gazprom dreaded.  (It was complete bollocks, of course, there were loads of meaty corporate chunks that could easily have been autonomous.)

This wasn't getting me very far towards understanding the hierarchy (which, in Russia, is an extremely important thing to do - КТО КОГО - who does what, and to whom?, the first thing you need to establish in any dealings with a Russian set-up).  But having studied these matters in some detail in my soldiering days, I knew there'd be an answer; and I had my resourceful staff procure me a Gazprom internal telephone directory.  The numbering system set it all out clearly ...  

ND

What Brexit?

In more Brexit good news, Google has signed up London to be the HQ of its European operations and this will create 3000 jobs by 2020 in London.


So they join Apple in backing the UK post-Brexit with expansion.


I really don't think we can underestimate the value of this. Lots of start-up Fintech companies have been thinking about moving to Berlin. Certainly the Germans want them there. Fintech is the future of financial services as the Big Banks suffer from strangulation by both regulation and zero-interest rates. Pensions funs too, long a source of wealth for their employees and owners at our expense, will not last in their current form once technology companies start empowering people to 'take control' of their own pension pots.


So having a tech base is really key to the future of the Country and the investment of the world's two best know companies provides good mood music.


Brexit, it seems, is going to take a long time to work out and to an extent the effect of this is to massively downgrade its impact in the eyes of businesses making long-term decisions; of course, this is the opposite of what hyped-up media like to report. Not understanding, business they think long-term uncertainty is bad. Of course this is not the case as no business really plans ahead for more than 5 years tops - anything that wont have an impact within 3-5 years is discounted. The things that really bother management is what is happening tomorrow and in the next quarter and it decreases in importance from there.


So, here we are, several months in, still no impact of Brexit or sign of it bar the currency effect which is a net positive anyway? Yet you wont read or hear this from many people - such is the power of cognitive dissonance.

Google and its Enemies

Google has a lot of friends, and why not ?  A company providing a mind-blowing array of incredibly useful services for free, within a fabulously successful business model, and with more and better promised: it seems perverse not to be positively inclined.

Enemies, then ?  Well some aren't exactly smitten by Google's many charms.  A lot of jealous rivals, obviously.  Those who don't enjoy the thought of their every keystroke being analysed as part of a Big Data exercise and then, shock horror, made available to advertisers (- just like the supermarkets).  The "don't be evil " injunction invites us to apply high 'ethical' standards which any commercial enterprise - particularly one operating in uncharted territory where there are few rules - is likely to find hard to live up to.  (Google is scarcely the only organisation on the planet that bows to China's wishes as regards censorship: must post on Hong Kong soon.) And we can diskard uterly those of the Max Mosley brigade who don't like the idea of their past public-domain misdemeanours being accessible via a search engine.

But Google does have some real enemies.  Murdoch is feuding hard with his anti-google campaign, suggesting the old pay-wall strategy isn't a roaring success.  Good luck with that, mate.  As the music and book-publishing industries have also discovered, (and shopping, and education, and TV, and translation, and taxis, and medicine, ...) the world has indeed changed.

More interesting is recent observation that Facebook is the enemy of Google - and at a deeper level than just the straightforward, long-running battle for investors' and advertisers' favours.  How so ?  Because Facebook lures people into a closed, self-contained world wherein to spend their hours; whereas Google is seeking to make money from providing services to people doing Real Things in the Real World - travelling, researching, shopping, eating, going to the theatre, reading articles from foreign-language sources ... they'd love you to help them extend the list.  The more time spent with Facebook, the less time googling tourist destinations.

To the extent Facebook is a threat to Google's interests, those mad online 'games' that tie people to their screens for days at a time must be even worse.  Preference for the virtual vs the real world is increasingly a choice people make for the use of their spare time - indeed for some sad types, of almost all of their time - and some would argue there is more at stake than just Google's revenue potential.  

A very strong case against the virtual is made by the fascinating Ian McGilchrist (Fellow of All Souls teaching Eng Lit, and Fellow of the Royal College of Psychiatrists, Research Fellow in Neuroimaging, & Clinical Director of Acute Mental Health Services).  His thesis runs along these lines:  the left brain (specialising in abstraction, maths, linear reasoning, theorizing, virtual world) should be a tool of the right brain (intuition, empirical reasoning, metaphorical thinking, creativity, real world), but starting in the 20th century the left has started to predominate - and not in a good way.  In fact, he reckons, in a very damaging way.

608 pages of this later (The Master and his Emissary), you may or may not agree with him.  It's a value judgement at the end of the day: and I'll take real-world Google against virtual-world Facebook any time.

ND

Bank of England tracks Google - what will they find?

Loved this story in the FT today - apparently the Bank of England - known for their terrible modelling over the last 3 years where they have been wrong about inflation consistently, have upped their methodological game.

Interestingly, they have decided they need to use google and Internet search algorithms to try and understand more about the state of the UK economy. How sweet, it seems that it you type in 'Cityunslicker, Bank of England' you get plenty of information to work with, perhaps they can start here?

More importantly, they point being made by the Bank is that they are struggling to get accurate information on the UK economy which is up to date. This is what happens when you print a few hundred billion pounds and reduce interest rates to zero - having previously had to bail out your broken financial system. After all that, there now appear distortions that make predictions hard - how unpredictable!

Google is 10: is Chrome the killer App?

Google host our blog for free and provide the best analytics as well as advertising. I have a lot of admiration for a company that can be so consumer friendly. In fact with customer service and innovation so high on the companies agenda it does not surprise me that this company is 10 years old and yet valued at $140 billion.

To makr its 10th and also to try and out-compete Microsoft Google has launched its new Browser, Chrome. I am not much of a techie but could see little in it for the end user over say Mozilla. What is the master stroke is making the product open-source, the opposite of Microsoft; this enables other companies to benefit from Google's work and then customise and develop the application. Google wins because it is more customer friendly. people tend to use Microsoft because they have to for browsing.

With the continuing focus on innovation and pleasing corporate and personal users, Google is stuck with a winning strategy. It is an excellent business case example, focus on customers happiness and innovation then everything else will fall into place. Happy Birthday Google.