Facebook’s CEO and founder Mark Zuckerberg is as reckless as they can get when it comes to his management of Beacon: ballsy on Madison Avenue, then apologetic on his blog, then brash again on 60 Minutes.
But when it comes to Facebook’s global strategy, Zuckerberg is quite sedate and demure. To penetrate China, instead of the go-at-it-alone strategy, he enlisted Li Ka-Shing to the tune of a $60M investment (previously it was reported that Facebook was mulling an M&A strategy in China). To penetrate Germany, the largest European web market, he is bringing on the Midas touch-wielding Samwer brothers, who incidentally started a Facebook-inspired German social networking site for students.
I think that is pretty smart. Very smart in fact.
American companies who dominate abroad are actually the exception, not the norm. In most cases, they compete for years at a high financial and opportunity cost, only to walk away somewhat wounded. In a few cases, they are nowhere to be found (Google in South Korea, for example). Generally, they do best when they partner up (Yahoo! in Alibaba, for example). Ultimately, Google is accelerating its push against Facebook so Zuckerberg et al. will have their hands full with competition locally, no need to get caught between a rock and a hard place.
On this strategy, I give major props to Zuckerberg for bringing on foreign expertise - and getting paid for it!
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WatchMojo NewsletterAmazon.com is taking on Ze French by trying to offer consumers free shipping. On the surface, you wonder, why is the French government upset? But looking at the nuances in the matter, I agree with the French.
Booksellers have complained about Amazon.com’s decision to waive S&H, the matter has gone to court and Amazon has lost. It has been forced to pay a $1,000 fine every day for 30 days, after which point the Courts could lower or raise the fine. Amazon is trying to reverse the rule:
Cédric Manara, a law professor and e-commerce specialist at Edhec, a French business school in Nice, said he would not be surprised if the court raised the penalty, and that Amazon “had no chance” with its appeal.
The law is “really clear,” Manara said. “There is no way you can read the text to find a different result. And the court would have evidence of the firm’s deliberate will to violate the law.” A similar law regulating the price of books in Germany does not affect free shipping for Amazon.de, Mantello said.
The 1981 Lang law was passed at a time when booksellers were losing sales to supermarkets and other new competitors. It was meant to assure that the French public had equal access to a wide variety of books, both high-brow and low-brow, not just heavily marked-down publications.
The law has twice come before the European Court of Justice and both times it has been affirmed. The law is not considered anticompetitive because all book retailers are held to the same standard, Manara said.
Is it just me or should Amazon simply offer a bigger rebate to offset the S&H fee?
On the one hand, I like that Amazon.com is sticking to its guns and trying to lower price and what not, but at the heart of the ruling is a mechanism to protect competition, so I think Amazon.com is not helping itself with its arrogance in the matter.
They are helping in the short-term but in the long-term they will end up driving many of the small, mom and pop-style booksellers out of business and in turn, Amazon.com would control what books the French can and cannot read.
For this reason, Amazon.com will lose the case, again.
The risk it runs, frankly, is to come across as a “arrogant American company” telling France what to do… and that might create much more badwill than Amazon.com bargained for.
What ever happened to think global, act local Jeff?
Prediction time: this year, we will see a repeat of the Time Warner - AOL deal, which to this day ranks as one of the largest mergers of all time (technically, it was an acquisition, AOL bought Time Warner, subsequently saw its value crash, wrote down $99B in loss and the joined entity is now simply Time Warner again).
Let me be clear: yes AOL + TWX turned out to be one - if not the - most catastrophic M&A ever. Time Warner shareholders would probably drive to my office and kill me if I did not specify that. But much like we have seen vestiges of Web 1.0 repeated and prevail, I think that 2008 will mark a deal that a traditional media company will buy, merge, or sell to a new media company. It is inevitable.
Let me be bold: AOL and Time Warner failed due to timing, strategic fits and deal structure, the grand notion of media and technology meshing can create a lot of value, but that deal was ironically at the tail end of the dot com boom but ironically before its time.
January 2000 marked the beginning of the end. The NASDAQ peaked in March at 5,000, after all. The premise of Time Warner joining forces with AOL, however, was not bad then nor is it bad now. The landscape has changed, too. In fact, AOL was neither based on the world wide web nor was it a broadband company; it provided dial-up access to a walled garden on the Internet. On price, AOL had no business being worth more than Time Warner, but it was. Had Time Warner bought AOL, would the deal be perceived with such animosity?
Frankly, I wonder if Time Warner executives understood the full implications to all of that and the broader macro-landscape of the time. Surely, the mantra of distribution over destination was not on anyone’s mind, search economy had not been introduced, and video was a mere pipe dream.
Last Friday, I penned “Should CBS merge with Yahoo!” I think the deal makes a lot of sense. But regardless of whether that deal materializes or not, I definitely see companies crossing the line and merging with a counterpart from the other “category”.
A year after eBay bought Stubhub for $310M, Ticketmaster counters with a $265M acquisition for Ticketsnow. For other deals in this range, here is a snapshot of our M&A master list.
And if you want to see the entire list of Top M&A deals of all time, click here.
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