On Monday evening, I watched my 1st, The Last Phrase host Lawrence O’Donnell.
Although O’Donnell laudably attempted to target the audience’s awareness onand hopefully final, Charlie Sheen trainwreck interview, courtesy of the tragic undertow that threatens to pull Sheen below for wonderful, I used to be overtaken, not through the pulling on the thread, as well as the voracious audience he serves. It didn’t make me sad, it manufactured me angry.
In terms of celebrities, we will be a heartless nation, basking in their misfortunes like nude sunbathers at Schadenfreude Seashore. The impulse is understandable, to some degree. It could be grating to listen to complaints from individuals who get pleasure from privileges that most of us cannot even picture. For those who cannot muster up some compassion for Charlie Sheen, who helps make more capital for any day’s do the trick than the majority of us will make in a decade’s time, I guess I cannot blame you.
With all the fast speed of events on the internet and also the data revolution sparked by the Web-based, it is very easy for that technological know-how market place to assume it’s completely unique: always breaking new ground and engaging in factors that no one has actually executed earlier than.
But there's other sorts of online business which have currently undergone many of the exact radical shifts, and have just as great a stake inside potential.
Take healthcare, for example.
We generally think of it being a massive, lumbering beast, but in reality, medication has undergone a sequence of revolutions while in the past 200 years which are at the least equal to those we see in technologies and information and facts.
Significantly less understandable, but however in the norms of human nature, could be the impulse to rubberneck, to slow down and take a look at the carnage of Charlie spectacle of Sheen’s unraveling, but on the blithe interviewer Sheen’s existence as we pass it in the appropriate lane of our each day lives. To be honest, it may be tough for folks to discern the big difference among a run-of-the-mill attention whore, and an honest-to-goodness, circling the drain tragedy-to-be. On its own merits, a quote like “I Am On the Drug. It is Referred to as Charlie Sheen” is sheer genius, and we can’t all be anticipated to consider the complete measure of someone’s existence every last time we listen to something funny.
Quick forward to 2011 and I am attempting to investigate usually means of being a little more business-like about my hobbies (largely audio). Through the conclude of January I had manned up and started off to promote my weblogs. I had generated a few several weblogs, which have been contributed to by friends and colleagues. I promoted these routines by means of Facebook and Twitter.
2nd: the tiny abomination the Gang of Five on the Supream Court gave us a 12 months or so back (Citizens Inebriated) actually features just a little bouncing betty of its individual that could extremely well go off while in the faces of Govs Wanker, Sacitch, Krysty, and J.O. Daniels. Seeing that this ruling extended the concept of “personhood” to both firms and unions, to experiment with to deny them any most suitable to run inside the legal framework that they were organized beneath deprives these “persons” of your freedoms of speech, association and movement. Which implies (when again, quoting law college educated spouse and children) that either the courts need to uphold these rights for your unions (as individual “persons” as assured through the Federal (and most state) constitutions, or they have to declare that these attempts at stripping or limiting union rights need to utilize to serious corporations, also.
How is Elop going to address this by
using Windows OS? He has to do more than just charge more, he has
to produce better product at competitive prices, which keep getting
lower. Elop will have to license the Widows OS, which is an
expense, one that he would bear to nowhere near the same extent if
he used Android. I feel he mistakenly looks at this as Google
commoditizing the Android platform, in lieu of the more reasonable
perspective of Google commoditizing the entire portable computer
space.
Well, the answer has arrived. Microsoft is buying Xx% of Nokia for paying Nokia over $1 billion to product Windows Phone 7 hardware.
Nearly all of this money is undoubtedly going into R&D and
marketing. Nokia and Microsoft (their new defacto owners) invariably see
Google as the pre-eminent trheat and are pulling out all of the stops
to nullify said threat. This also answers the question of how Elop, the
Nokia CEO will be able to deal with the reduced margins of having to
buy OS licenses while competing with vendors who get Android for free –
Microsoft is not only footing the bill, but investing in the business
as well. You see, the drop in Nokia’s share price is highly unwarranted
and their is visible synergy in this deal. Nokia gets to remove the
costs of OS R&D from its line times, sunk costs that have apparently
had negative incremental returns as they have had their asses handed to
them by Apple and most definitely Google – who knocked them off of
their number one market share perch in just over a year.
Microsoft gets the economic benefits of an existing hardware platform
that happens to have the number one marketshare metric in the world,
and gets it for just over a billion dollars. This is a win-win
situation. The question is, will it win againt Google. Both companies
will still fail if they don’t execute on Google-time, who has compressed
development cycle years into months – literally!
From the Bloomberg article linked above:
Shrinking Margins (yeah, you’ve hear thist from me often enough)
Espoo, Finland-based Nokia needs to cut
costs to keep operating margins from narrowing further, after they
shrank to 4.9 percent last year from 19 percent a decade earlier. For
2011 and 2012, Nokia may cut its budget for research and development in
devices and services by about a third from last year’s spending of about
3 billion euros, said Sami Sarkamies, a Helsinki-based analyst with
Nordea Bank.
Microsoft spokeswoman Melissa Havel
declined to comment on the specifics of the agreement. Laurie Armstrong,
a spokeswoman for Nokia, said the final contract hasn’t been signed and
the company will share further details when they are complete.
Nokia’s royalty payments will help
Redmond, Washington- based Microsoft make a profit on the accord even
after the payments to Nokia, one person said. Some of the payment to
Nokia would be made before the company starts selling the phones,
meaning Microsoft bears some upfront cost in the partnership.
…
Microsoft shareholders want the company
to salvage its mobile-software business while also reining in costs. The
company doesn’t break out results for its mobile-software unit, and
instead groups them with the profitable Xbox video-game business, making it difficult to evaluate the financial performance of phone software.
Chief Executive Officer Steve Ballmer
has come under pressure from investors and his own board to improve
sales of mobile software after the company lost market share to Google
and Apple. Microsoft stock has declined 7.8 percent so far this year.
The agreement for the more than
billion-dollar payment was part of a campaign by Microsoft to keep Nokia
from choosing Google’s Android operating system, one of the people
said. Nokia also opted for Microsoft because Windows Phone software,
which is newer than Android and has a smaller number of handsets for
sale, gives Nokia a better chance to stand out, one of the people said.
The agreement also has Microsoft paying Nokia for the right to use its patent portfolio, one of the people said.
As part of the deal, Microsoft will use
Nokia’s Navteq mapping products for functions such as geolocation
services and selling local advertising and coupons tied to a user’s
position. If successful, that also could generate additional revenue for
Nokia, which will share in the sales. The two companies will also
divide revenue from services like search and advertising, Microsoft
President Andy Lees said last month.
I’ve been warning my subscribers about margin compression in this
space, and its about to get much uglier – to the extreme benefit of
consumers of personal and enterprise tech. Previous (and prescient)
posts from last year on this topic…
- Don’t Count Microsoft Out of the Ultra-Mobile Computing Wars Just Yet
- After Getting a Glimpse of the New Windows Phone 7 Functionality, RIMM is Looking More Like a Short Play
- As
I Warned in June, DO NOT DISCOUNT Microsoft in This Mobile Computing
War! Their Marketing Campaign is PURE GENIUS! and it Appears as if
the Phone Ain’t Bad Either - Apple on the Margin
- How
Google is Looking to Cut Apple’s Margin and How the
Sell Side of Wall Street Will Enable This Without
Sheeple Investor’s Having a Clue
Monetizing the Mobile Computing Race
We have a pretty firm idea of who is in the pole position as of now,
but that position is both risky and volatile, not to mention medium to
long term in nature – see Navigating BoomBustBlog Subscription Material To Find The Google Valuation Drilldown.
A more risk averse strategy is to go long on the component vendors
who supply those battling for pole position. Last week we released the
document Long candidate #1 – Hardware: The Mobile Computing Wars
to subscribers that outlined who our number one pick was after an
initial scan. This is not necessarily the absolute final say on the
matter since we have yet to perform a full forensic analysis, but the
company does look good in comparison to over 120 peers. Non-subscribers
should reference The Potential Equity Investments Most Likely To Prosper From the Google/Apple/Microsoft Mobile Computing Battle.
I am releasing the draft of the full shortlist of prospective long
candidates as of now (17 pages, 5 companies) to subscribers. Please be
aware that is a draft document and work in progress, but it is quite
informative nonetheless. See Mobile Computing Vendor Long List Note WIP. Those who wish to subscribe should click here.
Click here to read up on all of Reggie Middleton’s Mobile Computing War opinion, analysis, and research.
As Americans, we’re often taught that trusts and monopolies are the product of big business and are bad. However, if trusts and monopolies are bad when Big Business engages in monopolistic ways, why isn’t it bad when Big Labor engages in the same sort of behaviors that are condemned when committed by Big Business?
For over a week now, the nation has watched tens of thousands march in protest to Wisconsin Governor Scott Walker’s budget plan. Democrat lawmakers (aka Fleebaggers) have fled the state in order to avoid doing their duty, while Obama’s OFA has bussed in the astroturf from out of state. While the union meme has been that Walker’s plan is “union-busting,” perhaps a more apt description would be “trust-busting.”
One of the most vocal opponents of Scott Walker’s budget plan has been the Wisconsin Education Association Council [WEAC]. As a union affiliated with the NEA, WEAC (according to its website) represents 98,000 “educators” in the State of Wisconsin.
Like any union, WEAC has a vested interest in maintaining the status quo when it comes to forced dues from Wisconsin school teachers, as well as automatic dues deduction from teachers’ paychecks—both of which would be eliminated under Walker’s proposal.
Employers will be prohibited from collecting union dues and members of collective bargaining units will not be required to pay dues.
In essence, Walker’s proposal threatens the life blood of the WEAC which, according to its most recent financial report on file (FY 2009), raked in over $25 million from teachers in a one year period.
Another threat to WEAC, which no one in the mainstream media is talking about is the threat to the union’s insurance trust, called WEA Trust. The WEA Trust is, in essence, a union-run “multi-employer” health insurance trust (the employers, in this case, are school districts).
The way it works is that WEAC has, through collective bargaining (negotiations), convinced school districts to pay into the WEA Trust and, in turn, the WEA Trust is responsible for administering teachers’ benefits. According to PublicSchoolSpending.com, Walker’s proposal would give school boards the ability to shop freely for more competitive insurance rates and save the state millions.
Last year, the Education Action Group issued a report which stated, among other things, that:
WEA Trust, an insurance company established and closely associated with the Wisconsin Education Association Council (WEAC), siphons millions of crucial dollars from K-12 schools and their students every year.
WEA Trust has grown very fat on public school dollars, with a net worth of $316 million and a team of 12 administrators all receiving compensation packages worth six figures per year.
Sadly, this insurance swindle is endorsed by state law.
The group’s Communications Director, Steve Gunn, explains:
The pressure derives from state law, which makes the identity of a school’s health insurance carrier a topic of collective bargaining between local unions and school boards. That allows union representatives to come to the table demanding expensive WEA Trust coverage, and frequently school boards give in.
[snip]
Once school districts sign up for WEA Trust coverage, and write the carrier into collective bargaining agreements, the shackles are on. And they aren’t easily removed.
Local unions often refuse to have the provision stricken from school labor contracts in subsequent negotiations. If a school board presses the issue in an effort to save money, WEAC will frequently take the case to arbitration.
The Trust’s business practices also complicate the problem.
Districts need employee claim histories to provide to potential bidders, but WEA Trust sometimes refuses to surrender the information, making it more difficult, if not impossible, for competitors to draft an accurate insurance estimate.
WEA Trust also reportedly threatens districts with higher premiums – by removing them from regional insurance pools with lower rates – if they consider a cheaper carrier.
Some districts have managed to break WEA Trust’s shackles and the savings tell the story. Officials from 15 districts recently told EAG that they saved six figures the first year under new coverage, while still providing quality health benefits for employees. They also say the cost of their new coverage has remained steady in subsequent years.
But there is a catch. Officials at all of the breakaway districts said they had to surrender, or at least share, the insurance savings with their local unions, generally in the form of salary increases. That left them with little or no extra revenue to cover other costs.
In other words, WEAC, the union that has been most vocal during the last week’s protests has a vested interest in maintaining the status quo. If the union can defeat Scott Walker’s reform plans, not only does it keep the union dues of teachers, it also gets to keep its health insurance monopoly intact.
Of course, you’re not hearing this in the press as it doesn’t fit the convenient narrative of class warfare. So, the next time you have someone tell you how “mean” Scott Walker is for attacking the teachers’ union, you can simply reply: Follow the money.
_________________
“I bring reason to your ears, and, in language as plain as ABC, hold up truth to your eyes.” Thomas Paine, December 23, 1776
[Photo credit: Vaxomatic]
X-posted.
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