SeanReadsTheNews

Wired: Somali Pirates Offer Discounts to Boost Volume

A favorite trope of business writers is to apply the concepts of business reporting to non-traditional businesses, such as churches, schools, organized crime and other places you don't usually see that kind of profit-loss, market strategy type analysis.

Adam Rawnsley of Wired applied the trop yesterday to Somali Pirates, reporting on how they are having a sale on hostages to clear inventory and keep their staff at sea seizing more cargo, esentially a low-price, high-volume strategy.

A group of Somali pirates announced Sunday that they’re cutting their asking prices for hostages by 20 percent — to speed up the negotiation process, make room for more hostages and take in more cash.

“We want to free ships within a short period of time instead of keeping [hostages] for a long time and incurring more expenses in guarding them. We have to free them at a lower ransom so that we can hijack more ships,” Reuters quoted one pirate spokesman as saying.

As the folks over at TVTropes.com note, not all tropes or bad.  These types of stories make you think about the form of a business story and what makes it work.

 

Wired on WikiLeaks and Other Authoritarian Un-Businesses

It's been a strangely slow start to the business media week - probably because so much ink is being taken up by the Japanese earthquake tragedy and in its unrelenting horror, it's all running together for me.

Around the edges of that, Wired News put out two interesting stories yesterday that are worth taking a look at.

In the first, Mathew Schwartz covered un-businesses like WikiLeaks, Craig's List and WikiPedia, noting since how all of them generally don't seem to care if they ever become billionaires, it's impossible to make them grow up and behave, as an IPO track would.

So the overlords of open source are left to their regal eccentricities. Craigslist (see Gary Wolf’s story on the company in issue 17.09) has resisted giving its users traceable identities — a move any serious for-profit concern would have made long ago — because Craig Newmark sees anonymity as a test of the inherent goodness of people. Jimmy Wales’ Wikipedia user page, in introducing his statement of principles for the site, reads like a motto graven on an imperial arch: “I should point out that these aremy principles, such that I am the final judge of them.” Assange, similarly, has said that he alone makes the final call about what WikiLeaks will post. To this list of digital sovereigns we might someday add two young barons: CouchSurfing’s Casey Fenton and 4chan’s Christopher Poole.

I've commented on both WikiPedia and especially Craig's List in the past and how these companies benefit from authentic communication, even when they are accused of exploiting their contributors and promoting child prostitution.  Schwartz is the first reporter I can remember who has captured that viewpoint across multiple businesses at once and it's a fascinating article about brand, image and what happens when you just don't care.

 

CareerDiva: If Charlie Sheen Is Insane, Can Warner's Fire Him?

Career Blogger Eve Tahmincioglu of MSNBC.com is a political liberal and it shows a lot on her blog.  She treats employment like adoption, always assigns more rights and protections to labor than she would grant to management and is quick to find discrimination behind any statistical evidence of disparate outcomes among gender and minority groups.

That's a long pre-amble to highlighting a great column today applying her consistent logic to the most famous wrongful termination suit of - well at least the last week or so - Warner Brothers v. Charlie Sheen.  Applying her own logic consistently, she argues that if Sheen can be considered "disabled" by the fact that he's "insane," then Warners has no right to fire him!

You’re going to hear a lot of anti-regulation talking heads use the Sheen example as a reason such laws shouldn’t exist, but try to see beyond the rhetoric. It’s unclear whether advocates ever envisioned our laws would protect people like Sheen, but if the facts line up in his favor then he, like any other employee, should prevail in the end no matter who he is, no?

Give Eve credit.  Like a libertarian in favor of personal defense who finds himself arguing for personally owned nuclear warheads*, she is sticking to her principles no matter how ridiculous the outcome.

I find it oddly endearing and definitely the business news of the day that most caught my attention.

* been there, done that.  Hi Bob.

FT's Gapper: McKinsey Model Makes No Sense

Credit Columnist John Gapper of The Financial Times with a novel observation about the Raj Gupta/Galleon insider trading scandal and the involvement in it of clients from legendary business consultancy McKinsey - if the case holds up, their whole business model could probably be considered illegal.

It is hard to believe that trading on price-sensitive inside information from clients is rife inside the puritan, strait-laced firm – if evidence of that emerged, it would soon collapse, as Arthur Andersen did after Enron. But the accumulation and sharing of privileged knowledge is integral to how it works and it cannot afford its corporate and government clients to pull the shutters down.

Gapper goes on to note that sharing information about competitors as thinly disguised "best practices" is common in McKinsey reports but if it goes beyond that into trading for personal gain, well, the jig is up.

If Mr Gupta is cleared of the civil charges against him, then McKinsey will probably get through the scandal with only bruises. But it cannot afford the notion to spread that its clients’ information is not only used to amass a “knowledge base” that is sold to others in a sanitised form, but may also be exploited for personal gain.

No matter how the case turns out, it's a novel and potentially explosive observation.

BW on the Ecuador/Chevron Fraud: It's Not Who You Think...

Paul M. Barrett's sprawling BusinessWeek cover story on the Ecuadorian judgement against Chevron takes us back to a fascinating case - one that is so because it doesn't fit the narrative.  The crusading environmentalist lawyer, Steven Donziger, working to bring historic justice to tribal villagers done wrong by the oil company?  He's a fraud and a cheat.

Gibson Dunn dug up evidence of a disturbing nature. A scientific expert formerly employed by the plaintiffs protested in a deposition that his name had been signed to a report he had not written, which was then submitted as evidence to the Ecuadorian court. Another technical expert, supposedly a neutral one working for the Ecuadorian judge, had some of his findings drafted for him by the plaintiffs' American advisers. Gibson Dunn won U.S. court orders forcing Donziger and his allies to surrender reams of confidential documents, including his personal diary. 

It's hard to imagine Hollywood greenlighting "A Civil Action II," in which a crusading corporate attorney for one of the world's biggest oil companies figures out that seemingly hapless Ecuadorian villagers are ripping the company off through fraudulent litigation - but that's basically what's happened here and Barrett has the goods.

He's also dragging otherwise reputable organizations down with him - people who are going on the storyline like this spokesperson from the Sierra Club who basically admits that Donziger's criminal behavior is ok because he committed the crimes against an oil company.  Hopefully, that will come up whenever he is quoted again.

 "Steven has made some mistakes along the way and said some questionable things, but he has also been tireless, absolutely unrelenting," says the Sierra Club's Brune. "This has become a key battle." 

Falsifying affidavits and intimidating judges are not just "mistakes."  Mistakes are typos in filings or missed filing deadlines.  Barrett takes the time a magazine cover story affords to lay out all the pollution caused by Texaco/Chevron, efforts for clean-up, earlier resolution of the case and how Donziger's fraud brought it back to the court.

It's honest thorough reporting and it deserves to be read.

NYT: Hackers Can Take Over Your Car

John Markoff of The New York Times hits on a "Panic in the Streets" worthy topic -- remote takeovers of cars by hackers.  It's scary, broadly applicable to the reading audience and there hasn't been a single instance of it happening yet.

Because many of today’s cars contain cellular connections and Bluetooth wireless technology, it is possible for a hacker, working from a remote location, to take control of various features — like the car locks and brakes — as well as to track the vehicle’s location, eavesdrop on its cabin and steal vehicle data, the researchers said. They described a range of potential compromises of car security and safety.

Markoff admits this hasn't happened yet - the story is pegged to an academic study puporting to show it's possible - and also provides additional sources to say that the hackers did need direct access to the car to make it happen.

These academic stories about the potential of technology are important and valuable, but perhaps the headline writers could cool it a bit?

NYT: Movie Producers Flee Libyan Investment

Here's another in our ongoing series of extreme public relations problems: Michael Cieply of The New York Times reports on movie producers having to admit that they financed their products with support from homicidal terrorist dictator Mumar Qaddafi.

And Mathew Beckerman, the producer who made a splashin Variety last year with word that he had rounded up $100 million in financing for the company from Mr. Qaddafi and others, is suddenly getting a very cold shoulder.

Over the weekend, Mr. Beckerman’s name was deleted from the producer credits of a documentary, “Live at Preservation Hall: Louisiana Fairytale,” on the official Web site of the South by Southwest festival, which begins this week in Austin, Tex.

No offense is possible, so none is offered.  Cipely's sources all speak off the record, presumably to preserve their standing in Hollywood, probably financing movies with money from North Korea, and the entire article is about how producers are scrambling not to be associated with the scandal.

There isn't a single statement in the entire article from an on-the-record source condemning taking the money from the dicator in the first place - let alone a response offered by anyone who did.

The reality is that actions that would get a normal company blacklisted, require a very public apology and a name change, are just the way they do business in Hollywood.  

Two people who have dealt closely with Mr. Beckerman said they were introduced to Saadi el-Qaddafi at film festivals abroad, though never in Los Angeles. Both said they found Mr. Qaddafi, a former professional soccer player, to be vibrant, forthcoming and committed to the notion of building rapport between Libya and the United States.

Neither expressed qualms about past allegations that Libya had backed terrorists or abused its people. Both pointed out that Hollywood had routinely welcomed investors whose peripheral connections might not be the purest.

I just hope we can all keep this in mind the next time George Clooney or Jessica Simpson tries to tell us how to live or what to believe about medicine.

BW: Tech Talent Wars Intensify

John Heylar and Douglas McMillan of BusinessWeek had a report Wednesday on the state of the talent war in high technology.  Let's just say that the recession is over if you happen to be a talented software engineer.

In January, Google (GOOG) rebuffed Twitter's bid to hire Sundar Pichai, a star product-development vice-president, by making a substantial counteroffer, say people familiar with the situation. Google also recently awarded a $5 million bonus package to a top engineer to keep him from defecting to a startup, according to a person with knowledge of the competing offers. The bonus will be paid out over several years. "Companies are now becoming very concerned about retention," says Jeff Sanders, vice-chairman of search firm Heidrick & Struggles. "You are seeing them do equity grants not during standard cycles. They are really taking a look at the top 10 percent of performers and asking themselves, 'Are they locked in?' "

The story is a Halley's Comet, reporting on other people who get pay packages you could only dream of never gets old, but the reporters back it up with both primary examples as well as information from the usual HR talking heads.

Frankly, I want to live in a world where how much money someone makes is a cover story, rather than how many people have lost their jobs.

Yeah, This Daily Thing Isn't Working For Me...

I have four posts slated from the last two days and am not going to get to them until this weekend.  Sigh.

For anyone who's interested, here are the bullets:

•  Tunisia's PR firm fired the client according to this report from NPR's Marketplace.
• The FT reports on increasing oil production in the United States, which was interesting for the U.K. view of what the U.S. is up to - our media don't say this stuff about us.
• David Pogue of The New York Times writes a witty and biting open letter to the cable companies.
• Sarah Portlock of The Star Ledger in Newark writes about technology in which a piece of technology the size of a rubik's cube could replace big ugly cell phone towers.

Hope to return to regular blogging soon...

Wired: Foxconn's Suicide Problem May Be Overstated

This blog has covered the Foxconn suicide streak on occassion because PR people often look at crisis situations and wonder "what would I do if it really got that bad."  

Communicating for a company whose PR problem is that it's workers kept jumping off buildings - well, you have to pay attention.

Which is a long preamble to this story by Joel Johnson in Wired Magazine (the March cover) in which he examines the suicide rate among Foxconn employees against the overall rates in China and finds that it's actually fairly close to the average.

I seem to be witnessing some of those damage-control efforts on this still-warm fall day as two Foxconn executives—along with a liaison from Burson-Marsteller, a PR firm hired to deal with the post-suicide outcry—lead me through the facility. I have spent much of my career blogging about gadgets on sites like Boing Boing Gadgets and Gizmodo, reviewing and often praising many of the products that were made right here at Foxconn’s Shenzhen factory. I ignored the first Foxconn suicides as sad but statistically inevitable. But as the number of jumpers approached double digits, latent self-reproach began to boil over. Out of a million people, 17 suicides isn’t much—indeed, American college students kill themselves at four times that rate. Still, after years of writing what is (at best) buyers’ guidance and (at worst) marching hymns for an army of consumers, I was burdened by what felt like an outsize provision of guilt—an existential buyer’s remorse for civilization itself. I am here because I want to know: Did my iPhone kill 17 people?

You know Burson gave him the data on suicide rates among American college students. Just the initial framing of the story has to be considered one of the great triumphs of media relations.  Somehow, the company has seized the narrative.  The story turns into a weird kind of negative muckraking, wherein the journalist is trying to shock his audience that life in a Chinese factory isn't so bad, all things considered.

That 17 people have committed suicide at Foxconn is a tragedy. But in fact, the suicide rate at Foxconn’s Shenzhen plant remains below national averages for both rural and urban China, a bleak but unassailable fact that does much to exonerate the conditions at Foxconn and absolutely nothing to bring those 17 people back.

But the work itself isn’t inhumane—unless you consider a repetitive, exhausting, and alienating workplace over which you have no influence or authority to be inhumane. And that would pretty much describe every single manufacturing or burger-flipping job ever.

He does close by blaming consumerism for sins like forced overtime and family separation that they lead to - but overall any PR person confronted with this problem would have to be ecstatic at this result.

Another key point to observe is that media team found exactly the right reporter to work this piece, which is a hidden talent as most PR involves "taking what you can get" from whoever will take your calls.  This guy had the guilt to do the story, the talent to do it well and the objectivity to report the story in full rather than making it either a hit piece or self-indulgent whining.

The team had to find exactly the right reporter to handle this - and they did.