We are all shocked and saddened by the terrible events in Japan over the last two weeks, and our thoughts are with the people of Northern Japan impacted by the tsunami. We have also been watching the impact of this disaster on the world’s markets and the potential disruption to products and supply chains and realize that these disruptions may impact our customer’s businesses and investment strategies.
It is our objective to help our customers quickly and easily see the critical developments that impact their industries and businesses – using our patented categorization technology to report the right, relevant content. So in a economic disruption on the scale of Japan’s tragedy we can provide a business monitor to help everyone – customers or otherwise – keep track of the impact of the disruption on Japan’s key markets.
Our new monitor – Eye on Japan’s Economy™ – is available to everyone. You can sign up here:
Sign me up for Eye on Japan’s Economy™
Eye on Japan’s Economy™ covers disruptive market developments such as the Auto Industry, Base Metal Trends, the Semiconductor Industry and the Oil & Gas Industry Outlook, to name just a few of the topics covered.
If your business is impacted by the terrible events of March 11 we hope this new monitor will help you manage through the next few months by providing you with information on Japan’s economic developments as they happen.
Guest author Ryan Warren, FirstRain VP of Marketing
Do you create, or do you aggregate? That, it seems, is the pressing content question of the day. Penny posted on Tuesday about the seismic shift happening in the media space as news aggregators like The Huffington Post begin to assume market pre-eiminence over more traditional content creator/distributors like The New York Times. Even NYT Executive Editor Bill Keller‘s expressions of aggravation, have now had to be moderated as I’m sure his somewhat snarky commentary triggered a wave of exasperation and irritation amongst the New Media community.
In reality, of course, a forced choice between content creation and aggregation is a false dichotomy. The explosion of innovative content consumption platforms has simultaneously sharpened people’s hunger for more quality content and for technology to improve the efficiency and efficacy of consumption. Content creation and aggregation are like conjoined twins with a passive-aggressive relationship. They may share the same heart, lungs and kidney, but that doesn’t mean they have to like each other.
In addition to the NYT/HuffPo challenge that Penny points out, this shift is also well represented by LinkedIn’s recent entry into news aggregation space. In fact, their new feature LinkedIn Today is a great example of several emergent forces coming together, including Web news aggregation, social networking and real-time news. It allows business-focused users to consume an aggregated feed of linked and posted news stories that people within your identified LinkedIn industry are sharing on Twitter or LinkedIn, and lets you further customize by identifying additional industries or incorporating the twitter feeds of a range of news sources from Ad Age to Bloomberg News to Harvard Business Review.
It’s a smart play, because despite Twitter’s protestations, to date they haven’t provided a very robust platform for business users to consume an aggregated real-time news experience (a la TweetDeck). LinkedIn’s move steps in and intercepts that need by leveraging an existing social network that many of us in the business world are increasingly invested in, while also providing a whole new entrée into real-time news for those who haven’t yet jumped onto the Twitter bandwagon.
But with all this focus on the schism between the forces that ‘Create’ and ‘Aggregate’, there’s another critical element out there that’s just as powerful but sometimes is overlooked: let’s call it ‘Interrelate’. It means the unique and powerful value that business monitoring applications like FirstRain bring to the table. Although we do bring together vast amounts of news and other business content from the Web, what we can do that others can’t is interrelate that content through our (unique and patented) semantic categorization, deliver you some really targeted results, and then show you emerging trends through some pretty nice visualization analytics. What this means to business users in practical terms is quite effectively filtering out Web noise. It makes the time they spend getting up to speed on, or monitoring on an ongoing basis, an industry, market, company or subject, much for efficient and effective.
And not only is this more efficient, but through this type of interrelating of content a new kind value is generated (one that should be of great interest to content creators): the ability to make useful connections between content that may not have been anticipated by the creators themselves. This allows solutions like FirstRain to drive even more high-value traffic back to content creators than conventional news aggregators (or more general-purpose search engines), since we’re making connections for users that others simply can’t.
So as we look at the evolving relationship between content creators and aggregators, let’s resist the temptation to think of this relationship as twin poles between which we must navigate. The key role that ‘interrelators’, like FirstRain, play may emerge as an equally significant link in that chain.
There is a seismic shift going on that is continuing to shake the foundations of journalism. The intellectual view was well captured in an editorial by NYT executive editor Bill Keller – while the commercial reality is impossible to avoid as you can see in this chart from Business Insider on the drop in ad revenue over the last 10 years.
Keller’s piece, which is at once thought provoking and snarky, expresses annoyance at the hyper-inflated public and market valuations of aggregators like The Huffington Post, arguing that AOL’s purchase of HuffPo no more moves it into the content game than a company “announcing plans to improve its cash position by hiring a counterfeiter.”
Clearly he has an issue not only with the HuffPo team making out like bandits – but more so because they are doing so, in his mind, through aggregation. Earlier in the piece, Keller describes the news aggregation business model as “taking words written by other people, packaging them on your own Web site and harvesting revenue that might otherwise be directed to the originators of the material,” a practice he then likens to Somalian piracy. Methinks he also finds Arianna’s ability to capture a thought and repackage it in a warmer, more convincing way, very annoying.
Keller’s irritation is somewhat understandable, after all, he presides over one of the world’s great newsgathering organizations, one maintained at great expense and passion, and he’s watching the public perception of the monetary value of that content sink precipitously. But while aggregation in some form is here to stay, the quality of journalism is a pendulum that will swing back. His bemoaning of the fate of journalism is not unlike to bemoaning of the smut being circulated in England in Victorian times. Yes, there were great writers publishing in periodicals at the time (Dickens for example) but at the same time the Illustrated London News was a bestseller with stories of scandal and mayhem like Jack the Ripper.
I think Keller substantially misinterprets the value and appeal of HuffPo. Not only does HuffPo attract readers with pop culture – it also hosts a tremendous amount of valued, original opinion content authored by high-profile bloggers from politicians to religious leaders, mixed with aggregated news, yes I admit all from a decidedly left-wing perspective. I am often surprised to find out who is reading HuffPo. Not only rabid liberals in the mid West, but also academics and captains of industry. I find out because they tell me their reaction to some of the provocative pieces I have myself written for HuffPo.
More importantly, however, I think Keller misses the overall shift in content dynamics to which The NYT is also subject – the growing ability to analyze new and aggregated content and derive relationships between them making the stream both relevant and unexpected. Something we provide to our business users.
There’s an old adage that the UK economy is tied more closely to the US than to “the Continent” – one of the many arguments used to justify keeping the Pound separate from the Euro. But over the past few months we have witnessed a strong divergence in policy to deal with the continuing gloomy forecast.
Newly elected, David Cameron has set out the harshest program of spending cuts since WWII to try to deal with the long term impact of the recession on the UK, and in an opposite approach Ben Bernanke and the Obama administration are trying to spend their way out of the problem – for now.
Maybe this difference in approach is deeply cultural. The British (me included) are good at being tough, dealing with hard times for Queen and Country. With budget cuts being pushed through at record speed, some Labours believe it endangers the recovery of the country and reduces prospects for employment in the short term, and for prosperity in the longer term. This cost-cutting plan mainly impacts the bottom half of the income distribution (although the Royal Family will see a 14% decrease), drastically cutting welfare payments and government programs, but it’s a necessary evil according to the Conservatives.
Americans (me included) are endlessly optimistic. Even if we are running up record debts and many states are bankrupt Obama ran on Hope and he’s not going to back down from the optimistic view of the future even as he moves closer to the middle and Reaganism.
Although the US markets are up, neither approach is pulling their economy out fast enough for the record unemployment. Austerity or spending – neither is working well yet.
Where there is commonality and spending is in the green movement – hoping to save significant amounts of money on future energy consumption. The UK has invested in wind farms to provide a cleaner, greener, secure energy source to the country. In both countries the investment in going green is a spend that can create jobs and show a path forward. The US will spend up to $550 billion on green technology this year.
Or consider cosmetic surgery – clearly another area individual Americans continue to spend. Amazingly the number of Americans voluntarily going under the knife for cosmetic surgery has grown 5% in the last year. Is this because individuals feel a need to cheer themselves up in a down time (or could it be that this is a rising trend that is outpacing any ups and downs in the economy)?
Neither country is on the road to recovery just yet. Spend or save? Dour and tough or endlessly optimistic? Hard to tell yet but having lived through Thatcher’s England I’d bet on austerity paying off in the long run.
Want to track a pubic figure like David Cameron or Ben Bernanke? Follow famous people on our FirstRain Newsmaker pages.
Matt Brown from Forrester shared a very interested survey result with me:
Forrester surveyed 2,000 US information workers last year, aged 18 to 64, and broke them into two groups for the analysis: GenX and Y (18-43) and Boomers (44-64) . And one area of interest was information workers ability to find what they need at work.
In an analysis of their ability to find and trust information their results are almost identical. No difference based on age. Also, 65% of them trust information from inside their company (sad that less than 2/3 trust their own company’s information) and only 35% of them trust information they find on the internet (not so surprising given the amount of junk that’s out there, especially if you don’t have FirstRain to clean it up for you).
It’s encouraging that independent of age, at least between 18 and 64, there is no noticeable difference in people’s ability to find what they need at work. It means that the older demographic is not at a disadvantage even though desktop computing developed once they were already well into their careers.
Guest author: Dave Frankel, VP Business Development
I am writing this post from my American Airlines flight over Rapid City, South Dakota right now – connected to the internet via GoGo wifi . While I am generally a creature of habit when I get on my flights to and from CA (which almost always includes catching up on sleep), this time I figured I would try something new to see if it would improve the experience. I must say – I am hooked. I’ve already updated my Facebook status, participated in an email thread pertaining to a partner meeting I have tomorrow, got up to date on football news, checked in with my family via instant messaging (interrupting homework time), AND learned everything I needed to know about the our in-flight movie “Son of Rambow”. Who knew life could be this good?
It is a nice respite from what has been going on in the industry over the past week and half. As I was explaining to our Silicon Valley colleagues (who agreed with Penny’s post last week about how the financial meltdown hasn’t quite registered yet in sunny CA), there has been a dark cloud hanging over NYC since Lehman went down. The market swings, the daily debates about the proposed bailout, the questions about how the institutional investment industry is going to rebound, and the opportunities opening up to research providers are all regular topics of conversation for us in FirstRain’s NY office and in the field.
The truth is, no one REALLY knows what is going to happen next to this industry. As one of our Board members pointed out yesterday, there is not a person alive on the buyside that has ever traded through a phenomenon remotely close to this. Brokerage relationships are quickly being shifted, the availability of broker produced research is now in question, and consolidation and increased regulation appears to be on the horizon for investment managers, especially hedge funds. What this means is anyone’s guess – pundits, hedge fund managers, and common folk alike. One point on which we all can agree however: the art of institutional investing is going to be IRREVOCABLY CHANGED when the dust settles.
Despite reports of surging ratings for CNBC, I am personally finding the most thought provoking insights and opinions coming from the following: 1) sources I have already previously vetted from the web, like the daily updates from my friend Keith McCullough at Research Edge, the Integrity Research blog, Paul Kedrosky or John Mauldin’s Outside the Box, 2) sources published on the web that are forwarded to me from people that I respect and trust like colleagues or friends, or 3) of course, stories from the deep web that I might not regularly follow but that I uncover throughout the day from FirstRain. As I sit here at 35,000 feet reflecting on this, I realize that I have not felt the need to pick up the WSJ once in the past few weeks, and I certainly cannot remember seeing anything new and provocative on broadcast news about the financial industry meltdown. And, dare I ask, has anyone come across any market moving sell side research on the topic in the past two weeks?
Back to my decision to connect to the web via in-flight wifi. I must say, having tried it, I can’t see myself going back to transcontinental flights without being connected. Sure, I had to alter a routine that was working for me (and I definitely didn’t catch any zzz’s), and I am not quite sure about how much the option will allow me to accomplish in the future, but I see that the change is coming whether or not I embrace it. It’s probably better to be figuring out how to make the technology work for me (maybe download Skype before the next trip) than to think it’s just going to be a passing fad.
Next time, however, someone remind me to pack another laptop battery – my computer died before I was able to finish this post. With new opportunities come new challenges I guess.
The commercial real estate crisis has been looming for months and it looks as though it’s being held back by a finger in the dam.
It starts with the low mall occupancy rates. We’re already seeing store closings like Circuit City and if you walk around any but the most successful malls you’ll see closed storefronts aplenty. This trend is now flowing into the firms which own the malls, for example the current poster child General Growth.
General Growth has a mountain of debt and would, under normal circumstances, have filed for bankruptcy by now. From the Wall Street Journal: “Creditors so far have been willing to let deadlines pass because they believe there is little to be gained and much to be lost through a bankruptcy. General Growth’s mall operations are stable and many bondholders hope for a greater recovery outside of bankruptcy court.
“This is really rare,” said Kevin Starke, an analyst at CRT Capital Group LLC, a research company that tracks distressed securities. “It is corporate-bond limbo like I’ve never seen before.”
So how long can this hold out last? How long until the finger (not forcing debtors into bankruptcy) is pulled out of the dam? There is definitely a difference of opinion on whether the problem is the business of the malls themselves, or just too much debt burden – read some point, counterpoint from the UK on this here.
And worse – what will the fallout be beyond commercial real estate? We have many clients using FirstRain in the REIT (Real Estate Investment Trust) research process and as I used FirstRain to understand more about the commercial real estate market my interest was caught by the connection between life insurance and commercial real estate outlined by the Jutia Group. This Crisis is Just Starting to Hit the Headlines where the author predicts the fall:
Take MetLife for example. MetLife has $36 billion worth of direct exposure to commercial real estate… and less than $19 billion of tangible equity. A 25% drop in the value of its commercial real estate holdings would cut tangible equity in half. That would crush the stock.
MetLife isn’t alone. I’ve got my eye on 13 North American insurance companies. And all of them will take large writedowns due to commercial real estate and variable annuity exposures. At least one of them will fail over the next year.
I wish I were wrong about this. And I have nothing against any of the companies involved. Many are well run and, until now, had decent track records as good investors.
But they simply can’t get out of the way. They’re like giant hotels sitting on a sunny tropical shore… with an enormous tsunami headed straight for them.
Right now, it’s time to go short on the biggest U.S. life insurance stocks.
Definitely a trend to watch.
There’s a turn in the U.S. employment market happening – there’s evidence that the number of layoff announcements and reported layoff events has started to drop. This does not mean the number of job losses will drop yet since announcements precede the actual elimination of jobs, but it is a leading indicator of the turn in the employment market. 
