Less advertising, less profit. Simple as that.
Nov. 3 (Bloomberg) — MasterCard Inc., the world’s second- biggest payments network, fell in New York trading after cost cuts aided a jump in third-quarter profit, prompting one analyst to question the quality of earnings.Shares of MasterCard dropped as much as 5.9 percent, the most since April 20, after the company said it cut advertising and marketing spending by almost 30 percent in the third quarter. Chief Executive Officer Robert Selander said in July expenses would be “significantly higher” in the second half.
“MasterCard did beat the number, but a lot of that was on much lower than expected advertising expenditures,” said Robert Dodd, an analyst with Morgan Keegan Inc.
Things aren’t looking up for newspapers.
Amid the secular and cyclical slowdown in print advertising, McClatchy Company (MNI, the third largest newspaper company in the U.S. and the publisher of 30 daily newspapers including the Miami Herald and Sacramento Bee, reported third-quarter 2009 results.
McClatchy is facing the same dramatic decline in advertising revenue, as the rest of the newspaper industry. Total advertising revenue fell 28.1% year-on-year to $266.1 million. However, circulation revenue stabilized, up 6.7% to $69 million due to increase in circulation prices. As a result, total revenue slipped 23.1% to $347.4 million.
To combat the downturn, management undertook cost-cutting initiatives, focused on building Internet operations and reduced debt load. McClatchy had lowered its headcounts, and cut executive pay. The company was able to lower its cash expenses by 29.4% and total operating expenses by 30.2%.
Ticket distributor Ticketmaster and concert promoter Live Nation have been hoping to merge. Britain’s antitrust regulator objected today in a preliminary ruling. It believes the merger would severely limit competition and hurt consumers. I think it’s right, and its decision is something of a no-brainer.
Let’s break it down. Imagine you want to go see a concert. Since Live Nation has, by far, the strongest influence in the concert space, you will probably be going to one they promoted or produced. So to buy those tickets? Well, you probably have to go through Ticketmaster, since it has vast control over concert ticket distribution.
How cornered would they have the market? According to this CNN Money article from back in February about the proposed merger, their combined market share would be close to 80%. If that isn’t a threshold for antitrust regulation, then I’m not sure what is.
It makes sense business-wise for them, but as a frequent concert attender I am concerned about prices sky-rocketing.
General Motors said Wednesday it would wind down its Saturn brand after Penske Automotive Group abruptly called off negotiations to buy the unit.
Penske pulled the plug because it couldn’t secure future products for Saturn showrooms beyond 2011, when GM is scheduled to stop producing Saturns.
Although it had negotiated a supply agreement with another manufacturer, the deal was rejected by that manufacturer’s board of directors, Penske said in a statement. “Without that agreement, the company has determined that the risks and uncertainties related to the availability of future products prohibit the company from moving forward with this transaction.”
Makes sense I mean Mike T. is the only person to ever own a Saturn.
NEW YORK — AOL LLC said Tuesday it has hired Shashi Seth from software maker Cooliris Inc. for the position of senior vice president of global advertising.
AOL could certainly use a new advertising strategy. Does anyone actually USE AOL’s services anymore…besides AIM? Ten years ago sure but now my browser is Firefox, my service comes from Verizon, and I search with Google.
Great idea buying AOL, Time Warner. What’s that? Ten years later AOL is a worthless asset?
The Walt Disney empire is to buy the superheroes stable Marvel Entertainment for $4bn (£2.5bn) in a star-studded Hollywood deal that unites family names such as Mickey Mouse with lucrative characters including Spider-Man, the Incredible Hulk and the X-Men.
Disney hopes to put Marvel’s 5,000 characters to work on its television channels and in video games, theme parks and movies. The agreed takeover is for a mixture of cash and stock, with Disney shares accounting for roughly 40% of the buyout price.
The tie-up unites two companies with similar business models – they both take characters which capture the popular imagination and promote them vigorously around the world on every possible media platform and through third-party licensing deals.
This vastly continues the rampant pandemic known as infantilization.
I watched the new ABC show Shark Tank tonight. Here’s how it works: there are four greedy sons (and one daughter) of a bitch who are out there to steal away the ideas of prospective businessmen and women. The prospective businessmen and women (contestants) try their best to sell their product and investment offer to the five sharks. The sharks are typically hard to please, unless the products have made a decent profit and great sales. They also demand more than half of the ownership of the contestant’s company or product. The contestants are usually left with two options that look something like this: 1) sell a majority of the equity to the sharks or 2) walk away with no investment. It comes down to this: doing it yourself or having billionaire big business people run the operations for you. For instance, one contestant selling a life saving seat belt attachment rejected the sharks’ offer (which would have given them complete control his patent, his idea) because he would have “sold out” in essentially the same manner that independent rock musicians do when they sign to a major label. That’s really a core aspect of the show: does the contestant want to be completely immersed in something that he created…something that he knows what direction it should go in…OR does the contestant want somebody with more “business knowledge” to take control in the name of greed and “branding”? The first contestant was selling a line of clothing called Crooked Jaw Fashions. The sharks were only interested in the brand awareness/target audience of the clothing line. I’m probably going to keep watching this show even though I despise the sharks. And you might say well aren’t the contestants dumb for coming on to the show? Not really. They are asking for extra funding, like any investor might. When the contestant sacrifices control of the business, the operation, in my opinion, becomes unethical. Another contestant on tonight’s show made a Shakespeare rock disc collection to help students better understand the great English writer. Awesome idea! But he sold it away to the sharks. He’s only going to get 5% in royalties. Seems kind of ridiculous.
I’ve often thought to myself: why am I majoring in business if the corporation is something I so much despise? Business is not just the corporation. Business is everywhere. It exists in many forms and is hardly avoidable. There are good businesses and bad businesses, necessary businesses and unnecessary businesses. Wherever there is a (potential) market for something, there is a business. There’s very little that can stop business. There are government regulations placed on businesses and there are third party watchdogs monitoring business activity, but when it comes down to it…business is often inevasible and free of regulation, for at least some period of time. Maybe you’ve thought about business’ impact on you. Business has made you healthy, fat, smart, entertained, and a bunch of other adjectives too abounding to enumerate individually. Business is not God, even though the corporation, through branding and excessive marketing, tries to make itself appear omnipresent and omnipotent. The corporation is an enemy to business because of this. Business is not its own legal entity. A business is a human run operation that involves humans providing goods and services. We mustn’t let a particular organization take on certain human characteristics. This is where profit kind of fucks everything up. Because profit must be delivered to shareholders in a corporation, that’s a corporation’s only “obligation.” But, in essence, the humans running these organizations owe their earnings to a lot more people, or at least they should. Earning money for X corporation alone does not really allow for humanity to function sanely. The incentive to, for example, improve the livelihood of employees is usually not present because improving the livelihood of employees is a business expense, instead of a true “profit” to society. Most things that would otherwise help society economically or otherwise are corporations’ enemies. With small and midsized businesses, they have grassroots level focus; most customers, employees, and products consume, work, and are manufactured in a small bubble of area, as opposed to jobs and products that are outsourced. This way people will be less prone to exploit other people and/or the environment around them; the powerless (the poor, the working class, the non-corporations) are more likely to become self-sufficient and treated with dignity. I’ve kind of diverted, but what I’m trying to say is that I’m fully in favor of business. I love business and the potential value it serves to humanity. We (future business leaders) have to find feasible means of intimately bringing good to the entire world by scaling back so called “global” operations. It can be done. Just give us some time.