fortune--2020-02-13--The head of Amazon’s cloud denies crushing the competition (but says Amazon is still number one)

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The part-time DJ David Solomon, brilliantly profiled last year by Jen Wieczner in Fortune, is a pretty good interviewer too. The CEO of Goldman Sachs spent nearly 40 minutes at a San Francisco banking conference Wednesday gently probing Andy Jassy, CEO of Amazon Web Services, with questions that yielded some interesting answers.
Solomon’s query on competition yielded a surprising response given that Amazon executives typically say with a straight face they pay no attention whatsoever to competitors. On the downside, Solomon managed to avoid asking Jassy about AWS’s failed quest to win the Pentagon’s JEDI cloud-computing contract or its quixotic effort to depose Donald Trump about it.
Some highlights:
Jassy stressed that AWS sells to “every imaginable business vertical,” a key marketing point for the Amazon unit, given its roots of selling first to itself and then, for years, primarily to startups. Jassy also referenced the 6,500 government agencies worldwide that are AWS customers—though he didn’t call out any, such as the CIA—and he mentioned several times the importance of “public sector” clients.
Leaders and followers in cloud computing like to stress how early-days it is for the technology. Jassy quantified matters with a baseball metaphor: “Two outs, bottom of the first, runners on board,” he said. “Runs have been scored, though.” Translation: Many big companies have yet to convert from owning their own data center to renting computing services. But Jassy’s “runs scored” means it’s a real business already. He thinks the trend is so big, by the way, that “we won’t get to the ninth inning in my lifetime (of) working.”
Jassy said Amazon was surprised how long it took competitors to catch on to what AWS was doing, saying his company has a six-to-seven-year head start. No matter how hard the likes of Microsoft, Google, and IBM (none of whom he named) work, he thinks AWS retains an advantage due to better functionality, a larger ecosystem of partners, and more experience.
He pooh-poohed the notion that Amazon’s competitive zeal in the rest of its business will hurt its ability to win customers. For one, technology buyers will buy the best, which, naturally, is AWS. And he sought to dispel the “myth” that Amazon crushes all comers. The three areas he called out are worth noting: Amazon is pursuing a healthcare initiative but great healthcare companies still exist; Amazon tried and failed to make a phone; Amazon has aspirations in payments but “PayPal seems to be doing okay.”
Adam Lashinsky
Twitter: @adamlashinsky
Email: adam.lashinsky@fortune.com
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Contagion update. Coronavirus disrupted Mobile World Congress, which was officially canceled on Wednesday. “Global concern regarding the coronavirus outbreak, travel concern and other circumstances, make it impossible for the GSMA to hold the event,” the conference organizer explained.
Couldn't have happened to a nicer guy. Former Google guy Andy Rubin (yes, that Andy Rubin) is shuttering his smartphone startup Essential. The company's 2017 debut phone was one of the first to feature an edge-to-edge display with just a small, round cutout for the camera. But it was plagued by performance issues and didn't sell well.
In my younger and more vulnerable years. In real-estate tech world (or is it tech real-estate world), Amazon chief Jeff Bezos broke the highest price record for Los Angeles-area property, agreeing to pay $165 million for a Beverly Hills mansion. Previous owner David Geffen paid $47.5 million in 1990.
Working for the clampdown. In our latest Fortune poll, the public expressed some unease about the T-Mobile Sprint merger. Some 45% of Americans are concerned about consolidation among mobile carriers, while 34% are not concerned. T-Mobile customers are most satisfied in the industry, at 92%, with Sprint's the least satisfied, at 82%.
Ups and downs. On Wall Street, Cisco Systems issued a cautious forecast even as its last quarter's sales and profit met analysts' forecasts. Revenue of $12 billion was down 4% from a year earlier. Shares of Cisco, up 5% so far in 2020, lost all 5% in pre-market trading on Thursday. E-commerce platform Shopify said its revenue jumped 47% to $505 million, better than expected. Its shares, already up 34% in 2020, dropped 1% in pre-market trading. And Spotify disclosed in a securities filing that it will pay almost $200 million in cash for podcast network The Ringer.
FOOD FOR THOUGHT
The story of Facebook's origin has been told multiple times, including in the engaging movie The Social Network. But longtime tech journalist Steven Levy has dug up some new information in the form of pages from Mark Zuckerberg's handwritten notebooks. In a long feature for Wired, Levy recounts his many interviews with Zuck over the years and discloses what the future CEO was thinking way back when.
The notebooks have now mostly disappeared, destroyed by Zuckerberg himself. He says he did it for privacy reasons. This is in keeping with sentiments he expressed to me about the pain of having many of his early IMs and emails exposed in the aftermath of legal proceedings. “Would you want every joke that you made to someone being printed and taken out of context later?” he asks, adding that the exposure of his juvenile jottings is a factor in his current push to build encryption and ephemerality into Facebook's products. But I discovered that those early writings aren't totally lost. Snippets, presumably those he copied and shared, present a revealing window into his thinking at the time. I got ahold of a 17-page chunk from what might be the most significant of his journals in terms of Facebook's evolution. He named it “Book of Change.”
IN CASE YOU MISSED IT
Business’s coronavirus conundrum: What’s the best alternative to a handshake? By Eamon Barrett
Airbnb’s bottom line is hurting. New safety efforts could make matters worse By Aric Jenkins
Exclusive: Space Internet startup Astranis raises $90 million By Aaron Pressman
How virtual reality could help women during childbirth By Sy Mukherjee
Businesses lost an extra $500 million from email scams last year. Here’s how By Alyssa Newcomb
Popular antivirus software Avast under investigation for selling user browsing histories By Chris Morris
Huawei poses a 5G spying risk, but other options are hard to come by By David Meyer
BEFORE YOU GO
As we continue worrying about the coronavirus outbreak (which I'll have more time to do since MWC was cancelled), some interesting perspectives have emerged out there. Fortune spoke to screenwriter Scott Z. Burns, who wrote the 2011 thriller Contagion (famous in our household because Gwyneth Paltrow plays patient zero), and his medical adviser Dr. Larry Brilliant, who helped wipe out smallpox in real life. Brilliant is worried about whether coronavirus may be spreading untracked in countries with poor health care systems. "My fear is what we don’t know," he says. "Are there countries with weak immunity systems where the virus has been there for five weeks, spreading unseen?”
Aaron Pressman
On Twitter: @ampressman
Email: aaron.pressman@fortune.com


fortune--2020-02-13--What’s next for James Beard Foundation’s ‘rising star chef’ Kwame Onwuachi

Tesla raises capital two weeks after Elon Musk said it wasn ’ t needed

On the outside, 2019 looked like a huge year for 30-year-old Nigerian-American chef Kwame Onwuachi: The James Beard Foundation awarded him “Rising Star Chef of the Year,” Food & Wine called him a Best New Chef, and Esquire doubled down, naming him Chef of the Year and his restaurant Kith/Kin one of the best new restaurants. His memoir, Notes from a Young Black Chef, came out to rave reviews, and he was named to the Time “100 Next” list.
“Awards and accolades are great,” Onwuachi says of the things he’s been chasing his whole career. But looking forward, he has a new marker for what success will look like to him: letting his mom retire.
In his book, Onwuachi tells the story of rising as a caterer and chef and of his mother’s struggles to raise him while working as a caterer herself. “She worked very, very hard her whole life,” he says. And now the former Top Chef contestant says his new definition of success is to be able to afford to take care of her so she doesn’t have to work. It’s an issue that Onwuachi also looks at through a systematic lens—how he can make changes in the culinary industry for groups—like black women—who have long been pushed to the edges or out of it.
Chef Kwame Onwuachi passing out signed copies of his book, “Notes From a Young Black Chef.” Courtesy of The Culinary Institute of America
Onwuachi keeps a fierce pace—he’s involved with the movie being made of his memoir starring Lakeith Stanfield, is at work on a cookbook, and in addition to Kith/Kin briefly operated a fast-casual chain called Philly Wing Fry. Staying hungry and not becoming complacent or stagnant are other top goals for the year: “You have to adapt and change.” But as he chooses where to place his efforts while riding the current wave of success, the top thing he looks at is the impact he can make.
“There are so many ‘-isms’ that can be blanketed with the bravado of hazing,” Onwuachi said of how the industry treats women and people of color during a recent interview as part of the Culinary Institute of America’s “Conversations at Copia” series in Napa. “It prevents people of color from rising.”
Conversations at Copia Courtesy of The Culinary Institute of America
As he shines a national spotlight on inequity at the same private institute he discusses in his memoir struggling to afford, he also recently went up to New York to speak to women running catering operations out of their homes in the projects (as he did early in his career). “They can get answers to their questions, not from people that are looking down on them from some other pedestal without an understanding of what they’re going through. They have someone that’s been there, that’s gone through that.”
But even his smaller decisions have a bigger impact now. “These things that were hyperlocal in terms of my goals and what I was trying to do, they’re a bit more mapped out now,” he says. “I have to be careful of what I say yes to and make sure I’m making the right decisions moving forward, because they’re not just like a yes or no to this one thing; those yes or noes affect a lot of people.” Those people—particularly his staff—are a huge part of how Onwuachi looks at what he’s doing.
One of the lessons Onwuachi learned over the defeats in his career, he says, is there’s no such thing as a dream restaurant. “A restaurant is more than just the food,” he says. “It’s the way you make people feel when they eat, and the way they feel when they come in and work.” And so now, his dream restaurant has less to do with serving the perfect series of luxury dishes over nine precisely paired courses and more to do with the bigger picture of the concept of hospitality: “I just want to create an environment that people are simply happy to be there and there are tools to become a better person, in and outside of those four walls—focusing on mental health and inclusion, talking about inequity and things like that.”
Still, as focused as his outlook is on the greater good, Onwuachi’s food remains intensely personal, from what he cooked in his 2015 tenure on Top Chef, to the kitchen of Kith/Kin, as well as those that came between: Philly Wing Fry and his short-lived sky-high aspirational restaurant the Shaw Bijou. In his upcoming cookbook, he’ll feature Afro-Caribbean recipes, including ones from his own Nigerian, Jamaican, Southern, and Creole roots. The food, Onwuachi explains, “follows the path that West Africans took when they were ripped from their land to America: starting in West Africa, went to the Caribbean, then to the American South.
“Every dish should tell a story,” Onwuachi says of why his food philosophy stays so close to his own experience. “I am who I am, for sure: I’m myself, an open book, raw and real.” And that makes all the difference in the food, he adds: “That’s when it resonates with people; it resonates with my staff; and it resonates with me, myself.”
More must-read stories from Fortune:
—The most anticipated books of 2020, according to Goodreads
—Cabo’s newest luxury resort favors tranquility over nightlife
—The magic of the wedding industry’s most exclusive conference
—High-tech fitness offerings are the newest luxury hotel must-have
—The best travel destinations for every season of 2020
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.


fortune--2020-02-13--Exclusive: Space Internet startup Astranis raises $90 million

Astranis, a satellite Internet startup focused on bringing overlooked parts of the world online, raised $90 million in new funding.
The deal includes $40 million in equity venture capital led by Venrock, the company tells Fortune. Andreessen Horowitz, which led Astranis’s 2018 fundraising, also participated, marking that firm’s only space investment. The deal also includes $50 million of debt financing.
The new funding will help Astranis deploy its first satellite, already contracted to provide Internet service in Alaska, as well as funding further growth, CEO John Gedmark tells Fortune. The Alaska deal will bring in “many tens of millions of dollars” of revenue over coming years, and the company is in talks with customers like Internet service providers, smaller countries, and in-flight connectivity providers to launch 20 to 30 more similar satellites, he says.
“We’re going to be building them as fast as we can and that still won’t be enough,” Gedmark says.
Astranis is one of a host of companies, ranging from major players like SpaceX and Amazon’s Project Kuiper to startups like Swarm Technologies and Sky and Space Global, that are racing to loft satellites to provide Internet connectivity. Some of the schemes, like SpaceX’s Starlink system, aim to offer Internet worldwide and compete with traditional telecom and cable services on the ground. Even in Astranis’s niche to serve currently underconnected regions, there are multiple players, such as Google’s Loon balloon Internet service and startup GapSat. The race for funding already has forced some to drop out, like startup LeoSat, which shut down last year.
All of the companies are trying to take advantage of the plunging cost of both building satellites and launching them into space. Increasingly capable and tiny computers can fulfill functions that required larger, more power-hungry analog components on older satellites. And new commercial launching companies like SpaceX and Blue Origin have reduced the cost of sending satellites into orbit. That’s helped ignite a new space race, with startups raising almost $6 billion last year for space-focused businesses, up 38% from 2018.
“The capability that we have now in space has crossed the chasm to do things that we just couldn’t do before,” says Ethan Batraski, a partner at Venrock who also sits on Astranis’s board. “It’s now opening up a whole ecosystem and making the space economy a real thing.”
At Astranis, the strategy is a hybrid of old and new. For decades, major satellite communications companies like Hughes and Viasat have lofted bus-sized craft into high orbits, 23,000 miles up, that remain stationary over one point on the ground. Newer entrants like Project Kuiper, Starlink, and SoftBank Group’s OneWeb plan to use hundreds or even thousands of smaller, cheaper satellites in orbits that are only a few hundred miles up to blanket the planet with coverage.
However, Astranis is building smaller, cheaper satellites but then putting them in high, geosynchronous orbits. That means each satellite can provide coverage to a specific country or region at a much lower cost than a typical geosynchronous satellite. And the company doesn’t need to put up hundreds of small, low-orbiting satellites to open for business.
“This is one of the world’s most epic problems–we have four billion people not online,” Gedmark says. Reducing the cost “is what you have to do if you’re going to get four billion people online. Many of those people are in lesser-developed countries and can’t afford the kinds of prices we’re paying for Internet today.”
The business model is straightforward. Each contract with an Internet service provider or other customer covers the cost of the satellite dedicated to the specific customer’s area of coverage. The first Astranis satellite, going up on a SpaceX rocket at the end of this year, will bring in tens of millions of dollars of revenue under contract with Alaskan Internet service provider Pacific Dataport, Gedmark says, declining to provide more details. Pacific Dataport will sell service to consumers and businesses, so Astranis doesn’t have to do retail sales. Under this model, Astranis never has to build satellites and hope customers will come later—the deal is made before the satellite goes up.
Andreessen Horowitz led Astranis’s previous fundraising round in 2018. It’s the only space play in the famed venture capital firm’s portfolio. That’s because most space startups are doing more hardcore rocket design and other hardware endeavors that fall outside of Andreessen’s focus on Internet and software startups, says general partner Martin Casado. But Astranis relies heavily on custom software for the radios on its satellites and is attacking a market, communications, that the firm knows well, he says.
Astranis was also the first to go after the opportunity of putting small satellites in high orbits when almost every other company was going for low orbits. “We love contrarian views because that’s where we believe differentiation is,” Casado says.
More must-read stories from Fortune:
—The strange tale of Jeff Bezos’s $16,840 parking ticket bill
—Post-Brexit U.K.’s surveillance practices could spell problems for business
—Governments deploy surveillance tech to track coronavirus victims
—How marketers are increasingly using A.I. to persuade you to buy
—Predicting the biggest tech headlines of 2020
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-02-13--Carnival ship rejected by 5 ports has finally made it into one. Now a new cruise controversy is brew

Carnival ship rejected by 5 ports has finally made it into one. Now a new cruise controversy is brewing

The 2,257 passengers and crew aboard a luxury cruise liner that was barred by many ports over fears it harbored the coronavirus will finally set foot on dry land, ending an ordeal that’s gone on for almost two weeks.
The Westerdam arrived in Cambodia’s Sihanoukville port early Thursday, and local officials have boarded the vessel, ship operator Holland America Line said in a statement. Some passengers have already been issued tickets home, according to Christina Kerby, one of the guests on the ship.
“The mood is good,” Kerby said of her fellow travelers. “We are all ready to go home.”
The passengers on board the liner, which is part of Miami-based Carnival Corp.’s stable, celebrated Wednesday night after hearing their period of limbo at sea would soon be over, Kerby said. The ship will remain in Sihanoukville for several days, and passengers will be allowed to go ashore, the operator said in a statement earlier.
Cambodia’s Prime Minister Hun Sen said the virus is a global challenge and his nation’s humanitarian efforts have no borders, according to a report by local media Fresh News. The Kingdom of Cambodia doesn’t just cooperate with China, but with all countries, he told the outlet.
Probably one of the best views from the #Westerdam – good morning Cambodia 🇰🇭 ❤❤❤❤ pic.twitter.com/f1HmEXSUvV — Lorraine 🦍🐉🦍🐉💚 (@lorrain34100) February 12, 2020
Thailand was the latest country to turn the Westerdam away even after the operator said it had no reason to believe there were any cases of the deadly virus on board.
Passengers were earlier told by the captain that the ship would drop anchor in the Cambodian port, Kerby said. Her mother, also a passenger, got a ticket to fly out of Phnom Penh — Cambodia’s capital — Friday evening, she said.
Kerby said passengers were also told they would undergo a health check and it could take several days to get all of them on homebound flights arranged by the cruise operator.
Assessing Impact
The Westerdam’s next scheduled voyage, from Yokohama on Feb. 15, is canceled, and the cruise line said it’s “assessing the impact of current port restrictions in Asia on cruises departing Feb. 29 or later.”
Taiwan, Japan, the Philippines and Guam were the other countries or territories that rejected the Westerdam on concerns over the virus, which has killed more than 1,300 people since the outbreak started in central China late last year.
Although Thailand refused entry, it had promised medical help for any sick persons aboard.
A Holland America Line cruise ship has arrived in Sihanoukville, Cambodia. Here’s what to know:
– 2,257 passengers and crew onboard
– #Westerdam has been at sea for 2 weeks
– No #coronavirus cases reported
More @business: https://t.co/jf3HxQbNi9 #クルーズ船 #CoronavirusOutbreak pic.twitter.com/tg9QgpZRKP — QuickTake by Bloomberg (@QuickTake) February 13, 2020
Holland America Line said all the guests are healthy, but Thai Health Minister Anutin Charnvirakul questioned Wednesday whether that could be known with certainty, adding he was ready to consider providing medical aid, food and water if asked.
The Westerdam departed Hong Kong on Feb. 1 on a 14-day Taiwan and Japan cruise. The 1,455 guests and 802 crew members were originally scheduled to disembark at Yokohama on Feb. 15. The ship had sufficient fuel and food provisions to last until the end of the voyage, according to a Holland America Line blog post.
Meanwhile, controversy is brewing over another cruise liner that was allowed to dock in Phuket, Thailand.
Many Thais expressed anger on Twitter after local authorities permitted Seabourn Ovation to berth at the tourist-hub island. The cruise is scheduled to leave Phuket late Thursday after its passengers are done visiting the island, a local official said. The cruise’s passengers, all from Europe, were required to take temperature readings upon disembarkation, she said.
We, citizens didn’t want #seabournovation to dock either, actually any ship with suspected passengers. But we can’t do anything. We can only ‘yell’ on Twitter but the government wouldn’t listen to us. Also, we aren’t a trash can for the world to throw any unwanted thing to us. — IN MY HEAD. (@lostinmymindnow) February 13, 2020
More must-read stories from Fortune:
—Stock scammers are using coronavirus to dupe investors, SEC warns
—Credit Suisse making a comeback, but spying scandal drags down outlook
—Why China is still so susceptible to disease outbreaks
—A new coronavirus red flag on the horizon—a stronger dollar
—Fortune Explains: Tariffs and trade wars
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-02-13--Former PepsiCo CEO Indra Nooyi on her second act and why we should ‘think hard about time’

This is the web version of the Broadsheet, Fortune’s daily newsletter for and about the world’s most powerful women. To get it delivered daily to your in-box, sign up here.
Good morning, Broadsheet readers! Wells Fargo ditches forced arbitration, Rep. Tulsi Gabbard is the only person of color left in the presidential race, and a former Fortune 500 CEO—and our colleague Michal—reflect on the importance of being mindful of how you spend your time. Have a terrific Thursday.
– The clock is ticking. This morning’s essay comes from Fortune senior writer Michal Lev-Ram:
On some level, we all know time is precious. But sometimes the universe chooses to bring that fact home in the most… vivid of ways.
Yesterday morning, I was scheduled to interview Indra Nooyi, the former chief executive officer of PepsiCo. After getting showered and dressed, I took a quick stroll over to grab a cup of coffee when a bird pooped on my head. With no time to start from scratch, I hurried to the closest bathroom to rinse the contaminated parts of my hair in the sink as best as I could.
When I sat down with Nooyi a short while later—doing my best not to worry about the state of head—one of my first questions was about time, and how life has changed now that she has more of it.
“It’s been liberating, not having to run a company,” she told me. “I loved my job running PepsiCo, don’t get me wrong. But I was bound to a schedule, and it was PepsiCo all the time.”
Nooyi, who was in town to speak at the Watermark Conference for Women in Silicon Valley, says she’s now devoting herself to “passion projects,” like writing a book that tackles the challenges of integrating work and family life.
In some ways, she says, she is busier than ever—in addition to working on the book, the long-time CEO is a member of Amazon’s board of directors. But Nooyi also says that, if she wants to take a break during the day, she now has time to take one.
Nooyi has had a spectacular career. But in her goodbye letter to employees in 2018, she admitted that, throughout her tenure at PepsiCo, there were moments she’d wished she’d been able to spend more time with her children and family. “Think hard about time,” she wrote in her parting words to staffers.
The conversation got me thinking: How would I allocate my time differently if I could? I would like to think that I can be intentional about my time even as I journey through what is likely the busiest period of my life, both personally and professionally. But I’m also sure that some realizations can only be made in hindsight. Some level of regret is inevitable, right?
What will I regret? Not having chaperoned more of my kids’ field trips? Not having pushed myself harder at work? Not making more time to do volunteer work, or to read more books, or to floss my teeth?
A few years back, when she was still the CEO of PepsiCo, Nooyi told Fortune that balancing career with family “hurt like hell.” Maybe, when you’re the head of a Fortune 500 company that’s an unavoidable reality. But I certainly hope that’s not how I feel in the future, when I look back at this time in my life. And I wish more people who have been in Nooyi’s position spoke out about the tradeoffs, the difficulties, and the regrets, so that we might all learn from them.
I’m looking forward to reading Nooyi’s book when it comes out. But for now, if you’ll excuse me, I have to go wash my hair.
Michal Lev-Ram
michal.levram@fortune.com
@mlevram
Today’s Broadsheet was produced by Emma Hinchliffe.
ALSO IN THE HEADLINES
- Trump backtracks on the Treasury. Former U.S. attorney Jessie Liu headed the office that oversaw the prosecution of Roger Stone, and was also a nominee to a Treasury Department post as under secretary for terrorism and financial crimes. President Trump abruptly withdrew that nomination on Tuesday, the same day that four prosecutors involved in Stone's case resigned. CNN
- Out in the open. Wells Fargo will no longer require employees who file sexual harassment complaints to go through forced arbitration. A shareholder proposal on the issue preceded the decision—one that could influence the rest of Wall Street. Bloomberg
- Growing pains. Fortune's Polina Marinova chats with Battery Ventures general partner Chelsea Stoner, who is the first and only female partner in the firm's 35-year history. A growth investor, Stoner compares her strategy to SoftBank's: "We need to be there before SoftBank is. We need to find the companies earlier." Fortune
- Friend of Epstein. U.K. regulators are investigating the relationship between Barclays CEO Jes Staley and Jeffrey Epstein. Epstein was a client of JPMorgan's private bank, which Staley at one point led. Staley says their contact began to "taper off" after 2013 and the last time he spoke to Epstein was in 2015 (Epstein was convicted as a sex offender in 2007). "For sure, with hindsight, with what we all know now, I deeply regret having had any relationship with Jeffrey Epstein," Staley said on Thursday. The bank says that the CEO "retains the full confidence of the board." Wall Street Journal
MOVERS AND SHAKERS: Culture Amp hired Atlassian's Aubrey Blanche as global head of equitable design and impact. RapidDeploy hired Kimberly Storin of IBM Cognitive Systems as chief market officer. Mcgarrybowen promoted Lucia Grillo to U.S. COO.
IN CASE YOU MISSED IT
- Pair of heirs. Miky Lee, the Parasite producer who closed out the film's best picture win at the Oscars on Sunday, is joining forces with David Ellison, son of Larry Ellison, and his company Skydance Media. Lee, the granddaughter of the founder of Samsung, will invest $275 million in the venture. In the past, she has invested in DreamWorks and opened South Korea's first multiplex cinema. Bloomberg
- McBath for Bloomberg. Georgia Rep. Lucy McBath endorsed Michael Bloomberg for president. McBath has a long history with Bloomberg, going back to the anti-gun violence activism she began after her son, Jordan Davis, was killed in 2012. Bloomberg's wealth in large part funds the gun control group Everytown for Gun Safety and its Action Fund, which spent heavily to help elect McBath to Congress. Washington Post
- Running for the exits. As candidates exited the Democratic primary race in droves following poor showings in New Hampshire, there's one development to note: The departures of Andrew Yang and Gov. Deval Patrick leave Rep. Tulsi Gabbard as the sole person of color in a race that was once historically diverse. New York Times
- Front lines of the abortion fight. Many GOP state lawmakers have introduced the past year's restrictive abortion bills in part to provoke legal challenges that could get them to the Supreme Court—which is now far more likely to issue a decision against abortion rights. The lawyers with the ACLU's Reproductive Freedom Project, profiled in this feature, are on the front lines of this fight; it's the "hardest we’ve all worked at a concentrated period of time," says deputy director Brigitte Amiri. InStyle
ON MY RADAR
Three strategies women can use to make sure their ideas are heard at work Fortune
Why Altra signing two pregnant runners is a big deal Outside
Survivor has moved on from its #MeToo scandal. Former contestant Kellee Kim has not LA Times
Netflix picks up Naomi Osaka docuseries about the tennis star Deadline
PARTING WORDS
"I just wanted to travel with women who enjoyed motor-biking and not shopping."
-Hayley Bell, one of 3,500 women from 79 countries who rode in the Women Riders World Relay


fortune--2020-02-13--‘Tip of the iceberg:’ Why Covid-19 deaths will keep rising even as the coronavirus outbreak wanes

As signs emerge that China’s coronavirus outbreak may be moderating, a morbid reminder of the disease’s toll is expected to persist, or even rise, in the days to come.
While new cases reported in China appeared to decline after a Feb. 4 peak, the number of dead has grown to around a hundred a day — double the daily count of just a few weeks ago.
But those deaths aren’t a sign the virus is getting more deadly, according to experts.
“Deaths are a lagging indicator,” said Marc Lipsitch, an epidemiologist at Harvard University, who is modeling the outbreak. Once people are infected, “it takes around three weeks on average for someone to die.”
On Thursday, the Hubei province where the outbreak is centered issued a revised count of cases and deaths, using a new methodology. The new method adds 13,332 new cases and 135 deaths to the total in the province — infections that were diagnosed using medical imaging but not a lab test.
Across China, more than 1,300 people have died from the virus and more than 59,000 have been infected, according to authorities. Outside experts have said the number of cases is likely far higher, and Hubei’s announcement that it was counting thousands of new cases in its total will likely add to that analysis.
As of Wednesday, there were 8,204 patients classified as severe cases, according to numbers released by Chinese officials. New confirmed cases have fallen to about 2,000 a day, down from a peak more than 3,500 daily cases last week.
“If cases only plateaued a week ago, we might expect numbers of new deaths to continue to rise for some time yet,” said Steven Riley, professor of infectious disease dynamics at Imperial College London’s MRC Centre for Global Infectious Disease Analysis.
The chaotic nature of the outbreak combined with limited access by international experts to Hubei province, where it began, has made it hard to know the full extent of the epidemic. Bloomberg and other news outlets have reported on a health-care system overwhelmed by the disease, with some severe patients turned away and sent home — making a final count of deaths far more difficult.
“It may be by far that the vast majority of people are those who died at home,” said Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota’s medical school. “We may never know how many people have died from this disease in China. I don’t think we ever will.”
Medical personnel on a mission to help the Covid-19 patients in Hubei province wait to get onboard the express train leaving Nanchang city in central China’s Jiangxi province on Feb. 13, 2020. Feature China/Barcroft Media via Getty Images
Health experts have been working to estimate the deadliness of the disease. A crude analysis done by dividing the number of deaths by the number of confirmed cases yields a mortality rate of about 2%. Other estimates that attempt to account for undiagnosed, milder cases have put it closer to 1%.
“It’s dropping every day as the number of tested patients is going up,” Soumya Swaminathan, chief scientist of the World Health Organization, said in an interview.
Making matters more confusing, the crude mortality rate mixes together a wide variety of disparate populations.
“We are seeing the tip of the iceberg, and it is a very large iceberg,” said Harvard’s Lipsitch.
Confounding Numbers
There are people who were hospitalized for other conditions in Wuhan and who then acquired the infection from coronavirus patients in the same facility. The numbers also include severe cases in Hubei province and other parts of China who were diagnosed early, precisely because of the gravity of their illness. And there is a large swath of healthier patients with mild cases, who are more likely to recover but less likely to ever be diagnosed.
“You are seeing case fatality rates in different populations being glommed together,” said David Fisman, an infectious disease doctor at the University of Toronto. The coronavirus death rate in vulnerable patients may not be relevant to healthy people who get the virus through everyday contact, he said.
While many people want to compare the outbreak to SARS, a coronavirus outbreak from 2002 and 2003 that infected more than 8,000 people and killed almost 800, a better comparison is seasonal influenza, said Anthony Fauci, head of the NIH’s National Institute of Allergy and Infectious Diseases.
Seasonal flu kills about 0.1% of those infected, while pandemics in 1957 and 1968 had mortality rates closer to 1%. The catastrophic 1918 contagion, known as the Spanish flu, had a 2% mortality rate, similar to what’s seen now in Chinese hospitals, Fauci said.
“It’s very different from influenza, but it would be acting like a really bad influenza season,” he said.
The uncertainly about how nasty the virus will turn out to be is a problem for public health officials trying to prepare for its potential spread around the world.
The death rate “is a number that we really can’t nail down at the moment,” said Ian Mackay, a virologist at the University of Queensland in Australia. “It is hard because we need that number to know how much to prepare.”
More must-read stories from Fortune:
—Stock scammers are using coronavirus to dupe investors, SEC warns
—Credit Suisse making a comeback, but spying scandal drags down outlook
—Why China is still so susceptible to disease outbreaks
—A new coronavirus red flag on the horizon—a stronger dollar
—Fortune Explains: Tariffs and trade wars
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-02-14--The world’s top female flamenco guitarists on the Spanish art form and the business behind it

President Xi Jinping ’ s pick to fix Wuhan ’ s coronavirus crisis : The man who lured Tesla to @

Although familiar worldwide, flamenco is more than meets the eye or ear.
Technically, it is a Spanish art form that originated in Andalusia in southern Spain, encompassing the traditions of a mixture of communities—including Jews, Arabs, and the Romani, among others—within its three components: baile (dance), toque (guitar), and cante (song).
Emotionally, the art form is one of the deepest expressions of human passion. “It’s a way of living, feeling, and taking an attitude toward life,” says Celia Morales, a flamenco guitarist with her own school in Ronda, Spain. “It is the joy, the celebration, loneliness, tragedy: It is the music that comforts the senses as much as it hurts them.”
Because of societal, cultural, and even political factors, however, the instrumental expression has—at least until recently—been relegated to men. Although a hefty number of women have pursued careers in the singing and dancing portions of flamenco, very few have become tocaoras—female flamenco guitar players.
“The industry is a reflection of society,” says Miguel Marin, the artistic director and producer of the yearly Flamenco Festival USA. “While singing and dancing women have exercised a leading role and there are more of or an equal number of [female] ‘stars’ in dance and vocals [compared to men], in the guitar [sphere, things have been different]. I am not sure why that happened.”
Some attribute the singularity to Spain’s overall attitude toward women’s rights: Abortion was legalized in the country less than a decade ago, divorce in 1981. Others specifically bring up Francisco Franco’s dictatorship over Spain between 1939 and 1975, and the status of the female population under his regime: “The Franco dictatorship meant the steps made by the women’s movement for women’s rights in the world of work, particularly in certain areas, went into reverse,” explains former flamenco teacher Eulalia Pablo in her book Mujeres Guitarristas.
Most consider the general attitude toward women in the industry to be a result of old-fashioned machismo and sexism, assuming guitar-playing to purely be a man’s job. “In the 19th and 20th centuries, there were many female guitarists, and they had an important role in the evolution of flamenco,” Marin explains. “Machismo might be the cause of this relegation of female guitarists [to the sidelines in following times].”
One such musician was Adela Cubas, a self-taught guitarist who reached fame in Spain but wasn’t able to translate her success across the ocean. “[She] was the first authentic guitarist in history,” says Morales, whose own students are all boys. “At that time, it was frowned upon that a woman was an artist. Much worse if it was flamenco.”
And yet tocaoras outside Spain have more easily been embraced by the art form’s community. Afra Rubino (Sweden), Noa Drezner (Israel), and Kati Golenko (United States) are only some of the musicians whose flamenco guitar-playing skills have been rewarded with fame.
The situation is dire when it comes to education as well. According to El País, the most prominent Spanish-language daily newspaper in Spain, as of 2017, only one in 10 flamenco teachers in the music conservatories peppering Andalusia was female.
As is the case across most cultural circles, although the walk toward gender parity is a slow one, it is peppered by charismatic individuals able to stand out from the masses and achieve recognition in their dedication to the craft, closing the gap between what is and what should be. In flamenco guitarist circles, one such character is Antonia Jiménez, one of the most successful and renowned tocaoras of today.
Hailing from Puerto de Santa María, Jiménez is now in her mid-forties, and she has accompanied flamenco singers (Juan Pinilla, Montse Cortés) and dancers throughout her career. Jiménez has also collaborated with Marta Robles, a classically trained guitarist (flamenco guitars differ from the latter: They are designed to cut through the sound of dancers stomping their feet), on Dos Tocaoras, their own flamenco production.
“I think the reason there aren’t many tocaoras is the consequence of 40 years of dictatorship in Spain,” Jiménez says. “At that moment [in time], the woman was considered like an object in the flamenco world.” Nevertheless, she is hopeful about future prospects: “I see that there is a generation of young girls who are playing guitar very well and who come very strong.”
When prompted to discuss the treatment she’s endured as a woman throughout her over three decades in the business, Jiménez acknowledges that things might be changing for the better. “Today there are fewer differences and, as long as it is in my hand, I always try to be treated as an equal,” she says. “I think that like the global society, people are beginning to become aware of the need for equal treatment for everyone. It goes very slow, but it goes forward.”
If the recent Grammy Awards are any indication, that progress might also include a wider audience for the art of flamenco in general: Contemporary flamenco Spanish singer and songwriter Rosalía performed at this year’s award show and won for best Latin Rock, Urban, or Alternative Album. “Even though flamenco has always been an international art form appreciated throughout the world, now it has broken another wall,” Marin says. “It has become mainstream, which means that many more people can connect with it.”
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—The most anticipated books of 2020, according to Goodreads
—Cabo’s newest luxury resort favors tranquility over nightlife
—The magic of the wedding industry’s most exclusive conference
—High-tech fitness offerings are the newest luxury hotel must-have
—The best travel destinations for every season of 2020
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fortune--2020-02-14--Adding infections, subtracting deaths: What to make of China’s fluctuating coronavirus count

For anyone keeping close track of China’s coronavirus counts this week, the numbers may have been equal parts concerning and confusing.
On Thursday, the Chinese city of Wuhan, the epicenter of the outbreak, reported a record 15,000 new cases of coronavirus, known as COVID-19, from the previous day. Wuhan authorities said the uptick reflected an effort to incorporate probable cases of the virus that weren’t necessarily confirmed in a laboratory so as to help medical professionals treat more patients.
On Friday, an additional 5,000 new infected patients were discovered, bringing the total number of cases reported worldwide to over 64,000. Also on Friday, Wuhan reported 121 new deaths due to the disease while subtracting 108 from the previous total, saying that some deaths had previously been double-counted. The total number of deaths related to coronavirus is now approaching 1,400.
Given low domestic and international trust in Wuhan’s handling of the early stages of the outbreak, China’s data about the coronavirus has given some experts pause; they argue that China should have been more forthcoming with data from the beginning. If nothing else, Thursday’s new numbers “undermine [the] message” that the central government is in control of the situation, Chinese politics professor Sam Crane of Williams College told The Guardian.
Though the change in methodology and subsequent spike in cases may be frustrating to some observers, it gives a “better reflection of the current situation” rather than signifying a huge increase in actual cases, said Martin Chan, a professor at Stanley Ho Centre for Emerging Infectious Diseases at the University of Hong Kong. “The sheer volume of suspected cases at the epicenter” has created a “huge backlog” in testing kits and ability to make lab reports, he said.
What’s more, shifting figures are to be expected, given the “emergency nature of outbreak response,” said microbiology professor Ooi Eng Eong of Duke-NUS Medical School in Singapore.
Projection problems
And the big upside of the methodological change is that patients who haven’t been officially diagnosed with coronavirus might receive better care, said to Benjamin Cowling, infectious disease expert and professor at Hong Kong University’s School of Public Health.
“In outbreaks it is not possible to test every single suspected case or even every single probable case, and for clinical management it is usually sufficient to use the same drugs and the same care strategies for ‘probable cases’ as for ‘confirmed cases,’” said Cowling.
Indeed, there have been ample anecdotal reports of suspected cases in Wuhan that have been left off official tallies, and the new methodology may provide some hope that more of those infected will receive treatment.
Nevertheless, the sudden change in how Wuhan is measuring the outbreak will make it difficult to project the outbreak’s growth in the short term.
“The change in case definition now makes it difficult to compare the number of cases before [it went into effect] with those that are reported after,” said Ooi. And it will make interpreting disease trends “tricky” over the next few days. Gathering significant takeaways from data takes time, Ooi said, so it will be a few weeks before any meaning can be derived from the data reported under the new definition.
Data alternatives
Even before this week, experts had been hunting for alternative sources of data. The situation in Wuhan is so dire, with health professionals focused on patient care, that they knew collecting perfect data from the epicenter would be nearly impossible.
“Experts have been looking at different sources of outbreak data and considering different possible scenarios based on them,” said Eugene Hung, a life science professor at Hong Kong University of Science and Technology. Hung, for his part, has been evaluating the number of cases in people who have left Wuhan’s Hubei province since the outbreak, and found that roughly 1% of them have been infected. Using that model to account for the whole province would put the actual number of confirmed cases in the “hundreds of thousands.”
Infectious disease expert Neil Ferguson at Imperial College London has estimated that only about 10% of those infected in China have likely been detected, and there may be as many as 50,000 new cases per day.
Yet if there’s any encouragement in projections related to the coronavirus, it’s that the vast majority of the cases appear to be mild.
Chan said that the death-to-case ratio seems to be holding strong at around 2%.
“At least this ratio, which is important, appears to be reliable and that is good,” Chan said.
More must-read stories from Fortune:
—Can you catch it twice? Answers to 5 pressing coronavirus questions
—Why China is still so susceptible to disease outbreaks
—Bernard Arnault was briefly the world’s richest man. Then coronavirus struck
—Will summer kill the coronavirus?
—My boss wants me to travel during the coronavirus. Do I have to go?
Subscribe to Fortune’s Brainstorm Health for daily updates on biopharma and health care.


fortune--2020-02-14--President Xi Jinping’s pick to fix Wuhan’s coronavirus crisis: The man who lured Tesla to China

Adding infections , subtracting deaths : What to make of China ’ s fluctuating coronavirus count

Barely a month ago, then-Shanghai Mayor Ying Yong was sharing a stage with Elon Musk to celebrate the release of Tesla Inc.’s China-built Model 3 sedans — the sort of glitzy honor that comes with leading the financial hub of the world’s second-largest economy.
Now, he’s stepping into a more difficult arena. Ying, 62, was appointed Thursday to the top political post in central Hubei province, a region simmering with discontent over his predecessor’s failure to contain a coronavirus outbreak that has killed almost 1,400 people across the country.
The choice speaks volumes about what President Xi Jinping values as he grapples with the biggest political crisis of his tenure. Ying, a former top judge who previously served under Xi in positions in Zhejiang province, is seen first and foremost as a proven loyalist.
“By sending a known ally to Hubei, Xi Jinping is also signaling the personal importance he attaches to Hubei’s recovery,” said Ken Jarrett, a former U.S. consul general in Shanghai who’s now a senior adviser for the Albright Stonebridge Group. “This is intended to reassure the citizens of Hubei that the central government will provide all necessary help as Hubei emerges from this public health crisis.”
Mixed Reviews
Ying replaced embattled provincial Communist Party chief Jiang Chaoliang, 62, a former bank executive who saw his political career crumble in just two months as a new strain of virus spread from the provincial capital Wuhan around the world. Hubei — an industrial powerhouse with an economy the size of Sweden’s — remains on lockdown, with its healthcare system stretched to the breaking point.
The shakeup indicates increasing unease among China’s top leaders with the political fallout from the virus and their desire to regain control of events. Ying’s success could have particular consequences for Xi, since he’s vested his confidence in the former Shanghai mayor to save the party’s prestige at home and abroad.
“The assignment shows the party with Xi Jinping at its core highly trusts me,” Ying said after he took the post Thursday, with a obligatory nod to Xi’s paramount status in the party. He called the new job “a heavy responsibility” and “a major test.”
Ying’s tenure as a virus-fighter has received mixed reviews, even on China’s heavily censored social media, where some complained about what they said was Shanghai’s slowness in tracking infected cases compared to other regions. One Weibo user named Little Landlady in Shanghai said the city needed to “detail every confirmed case like Tianjin, disclose their tracks like Anhui and manage those returning to Shanghai like Suzhou.”
Carlo Diego D’Andrea, vice president of the European Chamber of Commerce in China and chairman of its Shanghai chapter, praised Ying for introducing measures to support small and medium-sized businesses during the virus outbreak. “Shanghai responded very quickly to alleviate business pressures,” he said.
‘A Good Shakeup’
Ying, who joined the party in 1979, started as an official in the coastal province of Zhejiang, working for the Huangyan county industry bureau and the local police. He then spent much of his career in the province’s party-controlled legal system, rising to become president of the Zhejiang Higher People’s Court in 2006.
There, his career intersected with Xi, who led Zhejiang from 2002 to 2007. Ying later followed Xi to the neighboring metropolis of Shanghai and was appointed to lead the Shanghai Higher People’s Court in 2008.
Because of his overlapping experience with the future president in Zhejiang, Ying is often classified as a member of the “New Zhijiang Army,” a reference to the greater Zhejiang region. It’s a well of connections that Xi has repeatedly tapped since taking power in 2012.
“His appointment reflects the belief that the Hubei party apparatus has performed poorly and needs a good shakeup,” said Trey McArver, a partner at Beijing-based consulting firm Trivium China. “Ying is likely to focus on finding why the system performed poorly, and then taking steps to address the issue.”
In 2017, Ying was appointed mayor of Shanghai, a city of more than 20 million that has long been a key base of political power. While he maintained a relatively low profile, he nevertheless gained experience managing an economy roughly equal in size to Poland’s.
Perhaps more importantly, he expressed vocal support for Xi’s key agenda items, once describing the most important consideration for reforming China’s state-owned enterprises as “maintaining the party’s leadership.” He also presided over “criticism and self-criticism” sessions in the Shanghai government last year, in line with Xi’s Marxist approach to political discipline.
Ying’s most high-profile moment was unquestionably the launch of the Tesla Model 3s last month, when he shook hands with Musk and congratulated him on the brand’s local success. “The cooperation between Tesla and Shanghai is just a beginning and has a promising future,” Ying said.
It was a rare moment in the limelight for a low-key loyal party operative. But as Xi faces down the greatest challenge of his rule in Hubei, he appears to have decided that quiet loyalty was what he needs most.
“Ying Yong’s strongest credential is a long affiliation with Xi,” Jarrett said. “Xi wants someone he trusts as Hubei gets back on its feet again.”
More must-read stories from Fortune:
—Business’s coronavirus conundrum: What’s the best alternative to a handshake?
—Bernard Arnault was briefly the world’s richest man. Then coronavirus struck
—Why China is still so susceptible to disease outbreaks
—Contagion writer, scientific adviser reflect on film’s newfound relevance
—Fortune Explains: Tariffs and trade wars
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-02-14--The challenge of our generation

The challenge of our generation

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
Big business has had a bumpy working relationship with the Trump administration—marred by disagreements over trade, immigration, and the President’s response to the Charlottesville riots. But a select group of CEOs has continued to work closely with the White House—and particularly with First Daughter Ivanka Trump—on one of the most important issues of our era: reskilling Americans for the coming technological tsunami.
IBM CEO Ginni Rometty (who is soon to retire) has been one of the leaders, focusing in particular on the notion that a four-year college degree shouldn’t be the only path to workplace success. Creating alternative pathways “has to be a public-private partnership to be successful,” she says.
Apple CEO Tim Cook also has been active. “This is one of the greatest challenges of our generation,” he told me. “It’s a nonpartisan thing. We are all about engaging on policy. We stay away from politics.”
All the CEOs I talked with praised Ivanka Trump’s leadership of the effort. “She is the greatest cheerleader for the workforce, maybe on the planet right now,” said Salesforce CEO Mark Benioff…who doesn’t agree with the administration on much. “Administrations change. My values don’t change. I can work with anyone.”
Other CEOs on the Workforce Policy Advisory Board include Walmart’s Doug McMillon, Visa’s Al Kelly, and Lockheed Martin’s Marillyn Hewson. Are they moving fast enough to meet the challenge ahead? “It’s not fast enough yet,” says Rometty. “But the momentum is definitely building.”
You can read more about the effort in the March edition of Fortune magazine, or online this morning here. And keep your eyes peeled for the public service ad campaign being launched in March by the Ad Council, publicizing alternatives to four-year degrees.
Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Huawei charges
The U.S. has dialed up the pressure on Huawei by hitting the Chinese firm with new charges: racketeering conspiracy and conspiracy to steal trade secrets. Previous charges covered financial fraud and sanctions violations. Huawei: "This new indictment is part of the Justice Department’s attempt to irrevocably damage Huawei’s reputation and its business for reasons related to competition rather than law enforcement." Wall Street Journal
Amazon force
Amazon has forced a pause in the U.S. Defense Department's $10 billion JEDI cloud contract with Microsoft. A Federal Claims Court judge granted Amazon an injunction Thursday, while the case goes ahead. Amazon alleges that it lost out on the military contract because of pressure from President Trump, who is less than keen on CEO Jeff Bezos and his Washington Post. BBC
Big tax
Facebook accepts that global Big Tech tax reform will mean it needs to pay more tax in more places, CEO Mark Zuckerberg will reportedly say in a speech tomorrow. "I understand that there’s frustration about how tech companies are taxed in Europe. We also want tax reform and I’m glad the OECD is looking at this," Zuckerberg will apparently say, per Politico. Reuters
Coronavirus recession
Singapore's prime minister, Lee Hsien Loong, has warned that his country may go into recession as a result of the Covid-19 outbreak. Lee said the economic impact of the coronavirus has already surpassed that of SARS some 17 years ago—a time when the economies of the region were much less interlinked. The Star
AROUND THE WATER COOLER
Handshake alternatives
With conferences discouraging people from shaking hands, given fears over the spread of Covid-19, how should people greet each other and agree deals instead? Suggestions include waving, bowing and clasping hands at chest height. Fortune
Deripaska sanctions
Why did the U.S. hit Russian oligarch Oleg Deripaska with sanctions in 2018? Turns out it's because Deripaska was in 2016 "reportedly identified as one of the individuals holding assets and laundering funds on behalf of Russian President Vladimir Putin." Financial Times
U.K. reshuffle
British Prime Minister Boris Johnson reshuffled his cabinet yesterday—a little more than intended. After being told he had to replace all his advisers, Chancellor (i.e. top finance minister) Sajid Javid quit instead. His replacement is Rishi Sunak, a young minister who unlike Javid was keen on Brexit from the start, and who will have to share Johnson's advisers. The significance cannot be overstated. The balance of power in the U.K. government has always been defined by a healthy tension between the prime minister and chancellor. No longer, perhaps. HuffPost
Climate church
The Church of England has brought forward its net-zero-emissions target from 2045 to 2030, following a Wednesday vote. As Fortune's Katherine Dunn reports: "In setting an operational net zero target, it faces many of the same broad challenges facing governments, companies, and institutions alike: lingering uncertainty over the specifics of how the goal can be met, and how quickly; a lack of clarity on how much the total push will cost; and even how much carbon the Church currently emits." Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-02-14--Putting politics aside to close the skills gap

The world ’ s top female flamenco guitarists on the Spanish art form and the business behind it

The Trump administration’s relationship with business has been fraught from the start, with disagreements over immigration and trade, punctuated by the breakdown of CEO advisory councils after the 2017 Charlottesville riots. But the White House is working closely with CEOs on one of the great challenges of our era: reskilling American workers for the ongoing technology revolution.
The magnitude of that task was laid out by the McKinsey Global Institute at the Fortune Global Forum’s meeting at the Vatican in 2016, shortly after Trump’s election. McKinsey estimated that 23% of U.S. work could be automated by 2030. A massive training effort will be needed to prepare workers for the change.
White House senior adviser Ivanka Trump took up the challenge, cochairing an American Workforce Policy Advisory Board. She was joined by CEOs including Apple’s Tim Cook, IBM’s Ginni Rometty, and Salesforce’s Marc Benioff. In late February, the Ad Council will begin backing the board’s efforts with a campaign that stresses the pivotal idea that a four-year degree shouldn’t be the only path to a good career.
Rometty has been a driver of the business–White House partnership, working with Congress to reauthorize vocational education funding, and with the Department of Labor to expand apprenticeships. Tackling the skills gap “takes the public and private sector working together jointly,” Cook tells Fortune, adding, “It’s a nonpartisan thing.”
CEOs praise the presidential daughter for keeping the effort moving. “She is the greatest cheerleader for the workforce maybe on the planet,” says Benioff, who doesn’t agree with the White House on much. “Administrations change. My values don’t change. I can work with anyone.”
The advisory board is focusing on four themes: “rebranding” education to stress the value of vocational training; improving systems for matching curriculums to job skills; focusing recruiting and hiring on skills rather than degrees; and challenging companies to invest more in education and training.
Trump tells Fortune that the CEOs’ role is critical: “The people who know what jobs are going to be created and what jobs are going to be displaced need to be leading the effort.”
Big Number
16 Million
Number of U.S. workers who are likely to change occupational categories by 2030 because of automation.
Source: McKinsey Global Institute; assumes a “midpoint” level of automation adoption.
Courtesy of the Ad Council
A version of this article appears in the March 2020 issue of Fortune.
More must-read stories from Fortune:
—Why China is still so susceptible to disease outbreaks
—The rich own stocks, the middle class own homes. How betting it all on real estate is a wealth gap problem
—14,000 recalled baby carriers could drop infants on ground
—Stock scammers are using the coronavirus outbreak to dupe investors, SEC warns
—WATCH: Why CEOs are pessimistic about 2020 business outlook
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-02-14--China finds promising coronavirus treatment in blood plasma from recovered patients

China’s state-owned medical products maker is collecting plasma from the blood of people who have recovered from the novel coronavirus after discovering it helped critically ill patients.
China National Biotec Group Co. has been using this plasma, which contains highly potent antibodies, to treat more than 10 seriously ill patients since Feb. 8, the company said in a statement on its official WeChat account Thursday night. It claimed that those receiving the treatment improved within 24 hours, with reduced inflammation and viral loads along with better oxygen levels in the blood.
Drugmakers and the Chinese authorities are racing to develop a cure for the contagion that has so far killed more than 1,300 people, infected over 63,000 and has no approved treatment or vaccine. China has also unleashed a flurry of clinical trials — as many as 77 have been registered — in a bid to curb the outbreak that’s threatening its economic growth.
The announcement triggered a rally in the stocks of blood product makers on Friday. Beijing Tiantan Biological Products Corp., Shanghai RAAS Blood Products Co. and Hualan Biological Engineering Inc. jumped to their daily trading limit of 10%, according to data compiled by Bloomberg.
‘Generate Antibodies’
“Patients who have recovered from the novel coronavirus pneumonia, will generate antibodies that can kill and remove the virus,” the company said in the statement, citing unidentified experts. “In the absence of a vaccine and specifically targeted drugs, using this plasma is the most effective way to treat the infection and can significantly reduce the death toll.”
China National Biotech also called on people who have recovered from the disease to donate their plasma in a separate statement.
China’s National Health Commission has listed plasma among treatment measures for critically ill patients in its latest treatment guideline.
Human clinical trials are also underway for multiple drugs such as Gilead Sciences Inc.’s experimental therapy remdesivir and AbbVie Inc.’s anti-HIV pill, Kaletra. Several other antiviral drugs as well as traditional Chinese herbal medicines are also under study for their virus-fighting potential.
More must-read stories from Fortune:
—Business’s coronavirus conundrum: What’s the best alternative to a handshake?
—Bernard Arnault was briefly the world’s richest man. Then coronavirus struck
—Why China is still so susceptible to disease outbreaks
—Contagion writer, scientific adviser reflect on film’s newfound relevance
—Fortune Explains: Tariffs and trade wars
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-02-14--Strong dollar, cheap oil—the twin shocks that could roil markets well beyond coronavirus

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Happy Valentine’s Day, everyone. San Valentino, the Italian patron saint for whom this day is named, hailed from just up the road here, in the Umbrian town of Terni. No doubt he too would have been enamored with these markets.
Markets update
Risk-off is, well, off the cards today. The Asian markets have rebounded from early losses. In fact, as I type, the Hong Kong and Shanghai markets are up. Europe is flat, but the U.S. futures are in the green.
Yesterday, the global equities markets took a hit from coronavirus data that was both surprising and confusing. That triggered a testy White House response about the lack of data transparency coming out of China, a familiar complaint. Today, the numbers aren’t quite so bad; they’re not all that uplifting either. China reported a total of 4,823 new cases overnight, pushing the global tally to above 64,000, and the death toll to 1,380.
Let’s step back and look at the bigger picture, as we do each Friday.
By the numbers
We don’t have a chart today, but we do have the big figures that have moved markets this week, and the ones that will likely play a big role in the weeks ahead. Here we go.
3. As in three cents. A whole three U.S. cents. Yes, we’re starting with the dollar. Coronavirus is the most disruptive shock of 2020 so far. Dollar strength is a close second. And of course they’re interlinked. As we discussed earlier, a strong dollar makes exports more expensive, and messes with the competitiveness of American companies abroad. A number of multinationals have already been warning of exchange-rate effects on earnings calls. Get used to that. The dollar is up against most major currencies this year. As of this morning, it’s gained 3 cents to $1.084-to-the-euro since the coronavirus crisis hit in mid-January. That’s a big jump in FX circles, and it’s likely to eat into the bottom lines of most multinationals.
365,000. As in barrels of crude. On Thursday, the International Energy Agency delivered a new 2020 forecast for oil. They predict coronavirus will decimate demand, and so they’re cutting their outlook 30%, by 365,000 barrels per day. The price of benchmark Brent crude has rebounded in recent days, but it’s still down about 18% for the year. While some of us will celebrate cheaper prices at the pump, this forecast is the result of a giant demand shock, and clearly represents a sign of weakness in the global economy. As a Rystad Energy oil analyst says, this is the worst hit to oil since 2008. We all remember what happened that year.
576.69 or 288.03. Take your pick. The first number represents how many points we are from Dow 30,000; the other is what’s separating us from Nasdaq 10,000. Both the Dow Jones Industrial Average and Nasdaq are up in the past week. Bull Sheet readers will recall I’ve asked for your bets on when we’ll hit the big Three-Oh. (You can still hit me up; message me!) So far, I’ve had a number of bullish Dow 30K predictions, that, in hindsight, look really sensible. I should create a tie-breaker question: which index will hit its milestone first: the Nasdaq or the Dow?
***
Have a nice weekend. We’ll see you next week!… Programming note: There won’t be a newsletter on Monday (Feb. 17) as the U.S. markets are closed for the President’s Day holiday.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
Correction: The International Energy Agency has cut its 2020 oil forecast by 365,000 barrels per day. A previous version of Bull Sheet incorrectly stated the forecast was cut to 365,000 barrels per day.
Today's reads
U-turn. Tesla CEO Elon Musk was definitive during the company's January 30 earnings call. Despite its current heat of expansion, "it doesn't make sense to raise money because we expect to generate cash despite this growth level," he said. But now comes news that Tesla will sell another $2 billion in stock, Erik Sherman reports in Fortune. Musk himself plans to buy up to $10 million in shares in the offering. While some analysts pined for more consistency in the company’s messaging, investors were unfazed, bidding the shares up 5% on Thursday to $804.
London calling. Bankers and fund managers are buying top-end London homes at a rate unseen since 2013 as concerns about the city’s post-Brexit future recede, Bloomberg reports. Financiers accounted for around 35% of the homes bought for more than 2 million pounds ($2.6 million) in the U.K. capital’s toniest neighborhoods last year, according to broker Knight Frank. Across London’s priciest neighborhoods, such as Mayfair and Chelsea, home sales increased by 34% in the last three months of the year.
Inflation disconnect. Inflation remains at historical lows, currently running only slightly above the Federal Reserve's target 2% level. But a Fortune analysis of inflation data and price changes in critical areas vital to consumers suggests that, for many, rising prices in a variety of categories are making everything from rent to college and healthcare seem out of reach. These are the reasons for that disconnect.
Market candy
Happy birthday. On this day in 2005, the story goes, the Internet domain name www.youtube.com was registered. Valentine’s Day was a good day to launch YouTube because founders Chad Hurley, Steve Chen and Jawed Karim, who met while working at PayPal, initially conceived it as a dating website for single people to upload videos introducing themselves. Some 20 months later, Google snapped up the video-sharing bazaar for $1.65 billion. Some thought it had over-paid, but time has proved them wrong. Needham analyst Laura Martin said a few months ago that YouTube would be worth $300 billion as a stand-alone company. The company says it now has more than 2 billion users—or almost one in three internet users (including my kids, who prefer it to TV).


fortune--2020-02-14--‘It’s a better gift than wine now:’ Coronavirus makes toilet paper a hot new currency

In the high-stakes world of gift giving in Asia’s financial hubs, Montblanc pens and leather folios are out — toilet paper and surgical masks are most definitely in.
As fears of the novel coronavirus (Covid-19) spread across the region, pharmacies and supermarkets in Hong Kong and Singapore are running out of basic supplies like toilet paper, paper towels, hand sanitizer and especially masks.
That’s created an opportunity for financial service providers looking to wow clients and bolster relationships. The Singapore arm of online trading provider IG Group went viral after handing out party packs with 3M Co. N95 face masks, digital thermometers and bottles of Dettol antiseptic.
IG began distributing the gifts after Singapore raised the viral alert to orange — a critical level. What started as an amusing idea from the company’s local management team quickly spiraled and now its staff and clients have been receiving the care packs in the office and via mail. The gift has proven timely with some banks across the central business district evacuating their offices and requiring employees to work from home.
“It all started as a precaution for friends and family and then others started asking how to get the masks and other things,“ said Terence Tan, head of business development at IG Asia Pte. “So we thought: Why not get these things for our staff and clients?”
He said the first packages for clients went out today and they’ll send out more packages as additional supplies come in.
American Joel Werner runs a hedge fund, Solitude Capital Management in Hong Kong. On February 10, he bought the equivalent of 216 rolls of toilet paper on Amazon.com Inc. after his family tried in vain for days to find any in Hong Kong. The shipping alone cost $200 but he thinks it was worth it. He kept half of the bounty and plans to give the other half to friends and colleagues.
“It’s a better gift than wine now,” he said.
Household items also are gaining traction in the social lives of those in the financial hubs. Friends gathering at a restaurant in Hong Kong this week were asked to bring contributions of face masks or toilet paper for a lucky draw.
And in a sign of love in the time of the coronavirus, photos of bouquets stuffed with instant noodles and vegetables instead of roses are making the rounds of Singapore’s finance WhatsApp groups for Valentine’s Day after a run on supermarkets forced them to impose limits on shoppers.
It all goes to show that when crisis strikes, it’s the thought – and thickness of the toilet tissue — that counts.
More must-read stories from Fortune:
—Can you catch it twice? Answers to 5 pressing coronavirus questions
—Why China is still so susceptible to disease outbreaks
—Bernard Arnault was briefly the world’s richest man. Then coronavirus struck
—Will summer kill the coronavirus?
—My boss wants me to travel during the coronavirus. Do I have to go?
Subscribe to Fortune’s Brainstorm Health for daily updates on biopharma and health care.


fortune--2020-02-14--A cruise industry crisis: No one wants to be stuck on the next coronavirus-hit ship

Edgar Chan, a 28-year-old software engineer from Hong Kong, was among the thousands quarantined on the World Dream cruise ship off the city this month after passengers on an earlier cruise tested positive for the lethal new coronavirus.
He won’t be taking another vacation at sea any time soon. Being stuck on what local media called the “zombie ship” was annoying, and worrying about getting sick was frightening. “Getting a cold on a cruise is normal, but getting a virus, a highly infectious disease, is horrible.”
The cruise industry’s fear is that Chan is far, far from alone.
Asia — Chinese travelers in particular — was supposed to be a great growth market. But across the region, cruise line operators have had to cancel departures and in some cases keep guests on board, often without ports willing to let them disembark. Coverage of passengers being quarantined on ships such as the World Dream, run by Genting Hong Kong Ltd., and Carnival Corp.’s Diamond Princess have been broadcast around the globe, creating a public relations disaster. Another Carnival boat, the Westerdam, was rejected by multiple ports before being accepted by Cambodia on suspicion there could be a virus case on board.
“This is terrible for the cruise industry,” said Christopher Muller, a professor at Boston University’s School of Hospitality Administration. “In the new markets of Asia, the rebound will take longer since the overall market is not as mature and built up.”
Royal Caribbean Cruises Ltd., the industry’s second-biggest player, said on Thursday that it had canceled 18 sailings in Southeast Asia, and if it’s forced to eliminate all its excursions there through April, it could cost the company $1.20 per share in earnings this year.
The comments echoed those of Carnival, its bigger rival, which said on Wednesday that its earnings this year could fall as much as 65 cents per share, under similar circumstances. Carnival had about 4% of its capacity in China in 2019 — and was hoping that would grow to 5% in 2020, according to a public filing.
On Sunday, Hong Kong authorities allowed the 3,600 passengers to disembark the World Dream, while on the Diamond Princess, which is idling in Yokohama harbor, Japanese authorities have diagnosed 218 cases of the virus, including 44 new cases on Thursday. About 3,500 people are being kept in quarantine aboard the cruise liner, and health authorities are set to let high-risk passengers who test negative off the ship.
Estimating the potential impact to company earnings at this point is nearly impossible and that won’t change until the coronavirus outbreak is over and media coverage of the industry’s troubles ends, Instinet analyst Harry Curtis told his clients this week.
Making matters worse for the industry, the crisis is coming during the “wave” season, which is when cruise lines see most of their bookings for the coming year.
“It is a bit early to prophesize about long-term impacts,” said Ross Klein, a professor who has done extensive research on crime, viruses and other bad things that happen on cruise ships. “We can only watch to see how deep the problems go and how the industry is effected in the short term.”
Just a few years ago, cruise line operators with long-established customer bases in the U.S. and Europe began targeting Asia and its growing ranks of middle class consumers. The number of ships in the region rose to 79 last year from 43 six years earlier, according to the Cruise Lines International Association.
Passenger capacity in Asia topped 4 million in 2019, the trade group said. That was up from 1.51 million passengers in 2013.
The Chinese market has proved tough to crack, however. Last year, Norwegian Cruise Line Holdings Ltd. moved its ship, the Norwegian Joy, from China to Alaska. The vessel had been designed specifically for the Chinese market, with tea rooms and other amenities appealing to Asian guests, but they didn’t turn out in the numbers the Norwegian had anticipated.
Cruising has survived bad publicity in the past, including the wrecking of Carnival’s Costa Concordia in 2012, which killed 32, and an engine fire aboard the Carnival Triumph the following year, which left passengers stranded at sea without plumbing while millions at home watched what cable TV news dubbed the “poop cruise.”
Passenger volumes continued to rise in spite of it all, with the industry welcoming a record 30 million guests worldwide last year.
The industry will likely take a financial hit only from the canceled sailings and depressed bookings in Southeast Asia, said Stewart Chiron, a cruise industry commentator and travel agent. “Other destinations are sailing full,” he said in an email from the Royal Princess ship in Jamaica.
Given the newness of the Chinese market, that’s where the impact could be most severe.
Ingrid Leung, owner of Incruising Travel Asia Ltd., has specialized in booking cruises for people in Hong Kong and Macau since 2008. She usually sees just a handful of cancellations in a year, because most people go to great lengths to plan and pay for trips.
But she said she has had 10 cancellations just this past month. “That’s very, very unusual for us.” Bookings for sailings in the spring and summer have also taken a hit.
“I was hoping to expand in 2020,” Leung said. “But it’s not going to happen now.”
She said she’s not giving up though. “People are forgetful. If we can survive in the next three months, if the coronavirus situation gets better, people will start booking again.”
More must-read stories from Fortune:
—Can you catch it twice? Answers to 5 pressing coronavirus questions
—Why China is still so susceptible to disease outbreaks
—Bernard Arnault was briefly the world’s richest man. Then coronavirus struck
—Will summer kill the coronavirus?
—My boss wants me to travel during the coronavirus. Do I have to go?
Subscribe to Fortune’s Brainstorm Health for daily updates on biopharma and health care.


fortune--2020-02-14--Telehealth startup Ro launches a ‘digital health clinic for men’

This is the web version of Brainstorm Health Daily, Fortune’s daily newsletter on the top health care news. To get it delivered daily to your in-box, sign up here.
Happy Thursday, readers.
Telehealth firm Ro just launched what it’s dubbing a “digital health clinic for men” via its men’s health-focused arm Roman.
The company, which has its roots in the direct-to-consumer erectile dysfunction market, has recently expanded its ambitions beyond the men’s health space, including with telehealth services for smoking cessation and a vertical meant to advise women who are about to go through menopause.
But the new effort underscores how important the men’s health business is to Ro’s portfolio.
The so-called “Health Guide” is a digital publication from Roman. It’s sort of a man-centric WebMD, addressing questions men may have about everything from STIs to hair loss and diabetes.
As for the peer review process, Ro stated that anything published in the guide would be “information drawn from medical societies and governmental agencies unless explicitly stated.”
I spoke with Ro’s CEO, Zachariah Reitano, a few weeks ago about a separate project the company was working on—a partnership with drug giant Pfizer meant to leapfrog the company’s rivals in the generic Viagra space.
Here’s how Reitano described the importance of that partnership: “I compare it to buying coffee. You can buy coffee at two different places. All the coffee contains caffeine. But so many things go into making that cup of coffee that go into the quality of that product and experience.”
The comparison is intriguing. And Ro’s efforts in this crowded market could be a signal for how other telehealth companies follow.
Read on for the day’s news.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
A new lawsuit claims Juul bought ads on children's websites. BuzzFeed News reports that internal documents from vaping giant Juul explicitly targeted young people, including by buying ads on Nickelodeon, Cartoon Network, and other children's websites. "Juul knew it was selling to kids," said Massachusetts Attorney General Maura Healey. "They plastered the internet." Juul has consistently maintained that it has never deliberately targeted teens as a market for its vaping devices. (BuzzFeed)
INDICATIONS
Eisai's weight loss drug pulled from the market over cancer risk. Japanese pharma giant Eisai said on Thursday that it's pulling its weight loss drug Belviq from the market following Food and Drug Administration (FDA) concerns that the treatment may be linked with a slightly elevated risk of cancer. While Eisai takes some exception to that claim, the company has still agreed to voluntarily withdraw the product. (The Japan Times)
THE BIG PICTURE
Business versus the coronavirus. My colleague Erika Fry has a fascinating piece on the coronavirus—and how it's currently turning many businesses upside down. Erika spoke with Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota, who had this to say: "Trying to contain this is like trying to contain the wind." (Fortune)
REQUIRED READING
For tackling climate change, English bishops look to God, by Katherine Dunn
Why so many things seem expensive despite historically low inflation, by Erik Sherman
Home broadband providers face an uncertain future in the 5G era, by Don Reisinger
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fortune--2020-02-14--When innovation doesn’t equal improvement

Michael Avenatti is convicted of trying to extort Nike

This is the web version of Brainstorm Health Daily, Fortune’s daily newsletter on the top health care news. To get it delivered daily to your in-box, sign up here.
I imagine a decent number of you have seen the Sam Mendes’ World War I drama 1917, which depicts the insanity of trench warfare. So keep the movie (or any other WWI drama) in mind when thinking about this: The helmets used by soldiers in the first World War were just as effective as modern combat helmets in protecting soldiers from overhead blasts, according to a new study by Duke University researchers. Surprised? I was too.
Biomedical engineers at Duke’s Pratt School of Engineering found that pretty much all helmets were effective at numbing the effects of blunt force trauma to the head and warding off shrapnel. But some of the century-old helmets fared even better at handling certain types of blasts.
“While we found that all helmets provided a substantial amount of protection against blasts, we were surprised to find that the 100-year-old helmets performed just as well as modern ones,” said lead author Joost Op ‘t Eynde in a statement accompanying the report.
And, in some cases of protecting the brain against shock waves created by nearby and overhead blasts, the old school helmets actually offered more protection than their modern counterparts.
Here’s how the engineers came to their conclusions: They strapped various helmet types on the heads and necks of dummies, which were also outfitted with “shock tubes” that emulated the effect of an overhead explosion on a soldier’s head. The specific magnitudes of the shocks were calibrated to various types of shells historically used in combat.
The pressure that made its way to the crown of a dummy’s head was then used as a proxy for determining how risky a blast might be for brain health. According to the researchers, the test’s top performer was the 1915-era French “Adrian” helmet design, which bested both German and British rivals, as well as modern day, advanced combat helmets.
It just goes to show that, sometimes, you can still take plenty of public health lessons from history.
Enjoy your Valentine’s Day. We’ll be taking a short break for Presidents’ Day on Monday, but will be back in your inboxes with more on Tuesday, February 18.
In the meantime, read on for the day’s news.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
Medtronic expands its robotic surgery ambitions. Medical technology giant Medtronic is expanding its footprint in the robotic surgery space with the acquisition of London-based Digital Surgery. The purchase will bolster Medtronic's artificial intelligence and analytics surgery business. The acquisition price was not disclosed. "Computational power has impacted our lives in so many ways, and within surgery it is almost absent," said Dr. Jean Nehme, CEO and co-founder of Digital Surgery, in a statement. Digital Surgery has a product suite which includes software that helps train surgeons and sniff out efficiency gaps in the operating room. Medtronic has been putting up a challenge to rivals like Intuitive Surgical, the dominant player in the robot-assisted minimally invasive surgery field, and Johnson & Johnson.
INDICATIONS
AstraZeneca shares fall as coronavirus drags its 2020 outlook. The coronavirus' effects on business supply chains round the world continued to manifest themselves on Friday. British drug giant AstraZeneca said that its 2020 financial outlook would be marred by uncertainty over the coronavirus given China's key role in its revenue pool. In 2019, some 60% of Astra's total $8.1 billion in emerging market product sales came from China (including 21% of its overall global product sales). The ongoing disruptions in China related to the Covid-19 outbreak clearly represent a threat to the company's business. AstraZeneca stock dropped as much as 4% in Friday trading. (Fortune)
The windfall of cancer immunotherapy drugs. Cancer immunotherapy has been booming over the past few years, with new treatments such as Merck's Keytruda and Bristol-Myers Squibb's Opdivo raking in billions in sales across dozens of different cancer types. That hasn't just inflated drug makers' bottom lines—it's been a boon to investors as well, writes Ryan Derousseau for Fortune. Ryan writes that immuno-oncology treatments were a $22 billion business in 2019 alone, and that titanic figure could nearly double by 2023. What has that meant for investors? Growing demand for shares of companies like Roche, which earns nearly 60% of pharmaceutical revenues from cancer therapies, and bullish outlooks for other firms in the space. (Fortune)
THE BIG PICTURE
Parsing China's fluctuating coronavirus counts. Tracking a virus' spread can be tricky business (not to mention a source of confusion and frustration). But this evolving information is critical to keep track of since it provides context about critical issues such as transmission and mortality rates. For instance, Wuhan, the Chinese city where the outbreak began, reported 15,000 new cases of coronavirus on Thursday; another 5,000 patients were added to the count on Friday—but at the same time, the city has been shifting its total death count from the virus, adding certain deaths while subtracting others from the tally. What gives? A combination of adjustments for double-counting and reporting previously unconfirmed cases to provide a more detailed count. (Fortune)
REQUIRED READING
Putting politics aside to close the skills gap, by Alan Murray
Why a strong dollar and cheap oil could mean bad news for markets, by Bernhard Warner
Coronavirus has had a multi-billion dollar impact on a (former) world's richest man, by Adrian Croft
Mobile World Congress vows to return after canceling this year's event over coronavirus concerns, by Aaron Pressman
Sign up for other Fortune newsletters.


fortune--2020-02-14--Why Facebook’s Hobbi app shouldn’t be a ‘major concern’ for Pinterest investors

Pinterest shares tumbled 5% on Thursday and another 1% on Friday after Facebook introduced a new app called Hobbi that lets users create photo collections for their projects and interests.
While Hobbi isn’t exactly a Pinterest copycat, the existence of the stealthily-launched app, which was first reported by The Information, was enough to spook investors in the short term.
“Facebook has 2.5 billion users. Anytime they roll anything out, there’s a lot of power behind that user base,” Ygal Arounian, an analyst at Wedbush Securities, told Fortune. “If it’s a compelling product, just because they have that base built-in, there is a risk [for investors].”
The app was built by Facebook’s New Product Experimentation (NPE) Team and was listed under the NPE brand name—not Facebook—in the App Store. The group, which premiered in July, is tasked with building new consumer-focused apps. If apps don’t catch on, the team is supposed to shut them down quickly and move on to the next big idea, according to Facebook.
Since last year, NPE has launched Bump, an app for making friends through conversations, and Aux, a social music listening app. Both apps are not currently in the U.S. App Store. A meme editing app, called Whale, has already shut down.
Facebook declined to comment about Hobbi or its plans for it. In a statement, a Pinterest spokesperson downplayed the similarities.
“Upon first look, Hobbi appears to be a photo saving app that lacks the discoverability, search, and recommendations of Pinterest. As described in the App Store, it’s meant to help you document and remember the things you do, which is about the past, while Pinterest is about discovering ideas and inspiring action for the future,” the spokesperson said.
The statement, however, acknowledged that any similarities in other apps only validate the work Pinterest is doing to build community around a visual search engine.
“As we see companies try to copy elements of Pinterest, it validates the importance of a personal place online to explore your own interests, something we’ve been working on since the beginning,” the spokesperson said.
Hobbi shouldn’t be a “major concern” to Pinterest investors, according to Arounian.
“It’s a separate app, so it makes it harder to build up that user base. It doesn’t automatically have 2.5 billion potential users the same way Facebook Dating does,” he said, referring to how Facebook Dating is a part of a of Facebook app. “However, they could always roll it back into the app.”
Even still, shares of Pinterest fell another 1.4% on Friday, marking what has become a familiar pattern when Facebook appears to step on the turf of a rival.
No company perhaps has felt that pain more than Snap. Facebook-owned Instagram integrated Snapchat-style stories into its app in August 2016. Instagram co-founder Kevin Systrom told TechCrunch at the time that Snapchat deserved “all the credit.”
By April 2017, Instagram Stories surpassed Snapchat in users and has continued to grow. As Instagram announced major milestones with stories, Snapchat’s stock took a hit on the news.
While Snap went through a difficult two years, the company had a stellar 2019, adding 31 million new daily active users, and is cruising into 2020 with momentum.
Snap’s shares surged 196% in 2019 , according to data from S&P Global Market Intelligence, and many analysts have rated the stock a “buy”.
When Mark Zuckerberg announced Facebook’s plan to enter the world of online matchmaking in 2018, it sent shares of Match Group spiraling by as much as 20% at one point. Shares of Match and its parent company at the time, IAC, also fell nearly 5% in September when Facebook officially launched its dating service in the United States.
However, Facebook’s bark may be bigger than its bite in this case. Analysts say Facebook Dating hasn’t gained much traction against dating behemoth Match, which counts Match.com, Tinder, and Hinge among its portfolio dating brands.
The bottom line is this: First movers still have an advantage, and it’s not necessarily a company-killer when Facebook introduces a challenger or copies their features, Arounian said.
“Anytime Facebook does something, it bears paying attention to,” Arounian said. However, he said in this case, Pinterest has the first mover advantage, while Hobbi isn’t quite the Pinterest clone it was billed to be in some media reports.
“We don’t see this as a meaningful risk to Pinterest,” he said.
More must-read stories from Fortune:
—Airbnb’s bottom line is hurting. New safety efforts could make matters worse
—How businesses lost an extra $500 million from email scams last year
—Antivirus software Avast investigated for selling user browsing histories
—Huawei poses a 5G spying risk, but other options are hard to come by
—Predicting the biggest tech headlines of 2020
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-02-14--Michael Avenatti is convicted of trying to extort Nike

Why Facebook ’ s Hobbi app shouldn ’ t be a ‘ major concern ’ for Pinterest investors

Michael Avenatti, the combative lawyer who gained fame by representing a porn star in lawsuits involving President Donald Trump, was convicted Friday of trying to extort sportswear giant Nike.
The verdict was returned Friday by a federal jury in Manhattan following a three-week trial in which prosecutors said Avenatti threatened to use his media access to hurt Nike’s reputation and stock price unless the company paid him up to $25 million.
The convictions for attempted extortion and honest services fraud carry a combined potential penalty of 42 years in prison.
Avenatti glared at the jurors as the verdict was being announced but said nothing.
Afterward, he shook hands with his lawyers and told them “great job,” before he was led back to the cell where he has been held since a judge found he had violated his bail conditions.
His lawyer, Scott Srebnick, declined to comment but said he would appeal the conviction. A judge set sentencing for June.
Avenatti, 48, became a cable news fixture in 2018 and 2019 as journalists courted him for information about porn star Stormy Daniels and her claims of a Trump tryst before he became president, and a payoff to remain silent about it. At his peak of notoriety, Avenatti used Twitter and TV appearances to relentlessly criticize Trump and even considered running for president himself.
But Avenatti’s fall was swift. He was arrested as he was about to meet Nike lawyers last March to press his demands for millions of dollars to conduct an internal probe of the Beaverton, Oregon-based apparel maker.
Avenatti maintained he was taking the aggressive position at the urging of his client, Gary Franklin, who ran a youth basketball league in Los Angeles and was angry that Nike ended a decadelong sponsorship that provided $72,000 annually and free gear. He sought $1.5 million for Franklin, as well.
Franklin testified that two Nike executives forced him to pay money to the mother of an elite high school basketball player and to pass along payments to the handlers of other players while doctoring paperwork to hide the purpose of the funds.
Avenatti did not testify, but his lawyers said he was following the wishes of Franklin and an entertainment executive who advised him to be aggressive to force Nike to fire corrupt executives and fix its culture.
Besides the extortion trial, Avenatti also faces an April trial in New York on charges that he defrauded Daniels of book proceeds and a May trial in Los Angeles on charges that he defrauded clients and others of millions of dollars.
He remains held without bail. Federal prosecutors in Los Angeles succeeded last month in getting him locked up after saying he violated his $300,000 bail by moving money around illegally after his arrest.
More must-read stories from Fortune:
—These are the Democratic candidates who qualify for the next debate so far
—2020 candidates’ positions, and records, on economic issues that affect women
—The case for a national primary
—Fortune Explains: The debt ceiling
—Can Amazon convince a federal court to depose Trump over a $10 billion Pentagon contract?
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