Category Archives: Business

Arts, Business, Google, Government, Research, Science, Society, Technology

How different internet giants dominate countries across the globe…

WORLDWIDE ANALYSIS OF SEARCH ENGINE USE

China’s Baidu is popular in Korea, ahead of its own search engine Naver.

Google has become so much a part of everyday life many people now use the brand name as a verb for searching, but a new map highlights exactly how far and wide the site spreads across the globe.

The map, created by researchers at the Oxford Internet Institute, used data from millions of people’s browsing history worldwide and shows Google as the most popular site, in 62 countries.

Facebook was the second most visited site globally, in 50 countries, while the third place site – China’s Baidu search engine, was popular in just two countries.

The map, pictured, was created by researchers at the Oxford Internet Institute. It used data from millions of people's browsing history worldwide and shows Google as the most popular site, in 62 countries, shown in red. Facebook, shown in blue, was the second most visited site globally, in 50 countries

The map, pictured, was created by researchers at the Oxford Internet Institute. It used data from millions of people’s browsing history worldwide and shows Google as the most popular site, in 62 countries, shown in red. Facebook, shown in blue, was the second most visited site globally, in 50 countries

To work out the number of visitors, Dr Mark Graham and Stefano De Sabbata from the institute combined the number of estimated average daily unique visitors, with the estimated number of page views for that site from users in a particular country, for a particular month.

The data shown in the map covers the period of July and August this year and uses information collected by website analytics firm Alexa.

Each colour represents that most visited website in that country and each three individual blocks represent around one million users.

The countries are unusual sizes as the map effectively exaggerates countries that almost exclusively use one type of search engine.

Google is shown in red, Facebook is blue. Yahoo is shown in purple and has a stronghold over Japan, while China’s favourite site is the search engine Baidu.

Baidu is also popular in Korea, ahead of the country’s own search engine Naver.

The majority of most-visited sites were search engines, but Facebook was also popular.

Although Facebook was predominantly popular in the west, it was also the most visited site in Nepal and Mongolia.

The Al-Watan Voice newspaper was the most visited website in the Palestinian Territories, the email service Mail.ru is the most visited site in Kazakhstan, the social network VK was the most visited in Belarus, and the search engine Yandex was the most popular site in Russia.

The researchers said: ‘The supremacy of Google and Facebook over any other site on the Web is clearly apparent. We also see an interesting geographical continuity of these two ’empires’.

Google is shown in red, Facebook is blue. Yahoo is shown in purple and has a stronghold over Japan, while China's favourite site is the search engine Baidu, shown in green. Baidu is also popular in Korea, ahead of the country's own search engine Naver

Google is shown in red, Facebook is blue. Yahoo is shown in purple and has a stronghold over Japan, while China’s favourite site is the search engine Baidu, shown in green. Baidu is also popular in Korea, ahead of the country’s own search engine Naver

‘The situation is more complex in Asia, as local competitors have been able to resist the two large American empires.

‘At the same time, we see a puzzling fact that Baidu is also listed as the most visited website in South Korea – ahead of the popular search engine Naver.

‘We speculate that the raw data that we are using here are skewed. However, we may also be seeing the Baidu empire in the process of expanding beyond its traditional home territory.’

Areas in sub-saharan Africa aren’t covered by Alexa, yet Kenya, Madagascar, Nigeria, and South Africa are within the sphere of Google’s empire. Whereas Ghana, Senegal, and Sudan prefer Facebook.

On this map the countries bathed in blue are used to depict the global spread of Facebook, as of September 2013. The map shows a rising popularity in Africa, South America, and India - as also highlighted in the Oxford Institute map

On this map the countries bathed in blue are used to depict the global spread of Facebook, as of September 2013. The map shows a rising popularity in Africa, South America, and India – as also highlighted in the Oxford Institute map

Among the 50 countries where Facebook was listed as the most visited website, 36 of them had Google as the second most visited, with the remaining 14 countries listing YouTube, the Google-owned video site.

The countries where Google is the most visited website account for half of the entire internet population – over one billion people.

A large proportion of the population in China and South Korea use the internet, giving Baidu second place overall in terms of visitors.

The 50 Facebook countries account for about 280 million users, placing the social network in third.

‘We are likely still in the very beginning of the Age of Internet Empires,’ the researchers conclude.

‘But, it may well be that the territories carved out now will have important implications for which companies end up controlling how we communicate and access information for many years to come.’

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Britain, Business, Government, History, Politics, Society

A Royal Mail sell off makes business sense but there are risks…

ROYAL MAIL PRIVATISATION

In a world that is fundamentally different to that of the 1980s, the announcement by the Government this week that it will proceed with a £3 billion sale of Royal Mail, is the right way forward for the business if it is to survive. Margaret Thatcher baulked at the prospect and was, famously, a privatisation too far. Mrs Thatcher remarked in the Eighties that she was ‘not prepared to have the Queen’s head privatised’. Later, Michael Heseltine, and more recently, Peter Mandelson, had their privatisation plans for Royal Mail scuppered by dissenting MPs in the House of Commons.

Vince Cable, the Business Secretary, however, notified the Stock Exchange this week of the Government’s intention to float the company, which will probably take place in November. The announcement represents a further expression of economic confidence as the economy slowly recovers from a deep and difficult 5-year recession. The privatisations of British Gas and British Airways, some three decades ago, coincided with a rising tide of opportunism. The parallels are noticeable as that is beginning to be felt once more.

The sale of Royal Mail affords something similar, too, to those earlier flotations: the spread of share ownership. More than 15,000 employees are to receive 10 per cent of the shares, with the rest being offered to institutional investors and ordinary members of the public.

While not without risks, the Government’s plan does have much to recommend it. Royal Mail has suffered from both chronic under-investment and deep-rooted inflexibility as the world around it has radically changed. Royal Mail is heavily unionised and has lumbered on, but the effect has been missed opportunities on a vast scale as rivals have been able to compete on the more lucrative parcel-delivery markets, even as the digital revolution and e-mail decimated traditional letter deliveries.

Moya Green, who took over in 2010, has brought Royal Mail back into the black, which was largely helped by the Government’s takeover of its £5 billion pension deficit. Following the flotation and barring unforeseen disasters, the first dividends, totalling £133 million, will be paid in July.

Despite the Government’s plan and opportunity, the Communication Workers Union has responded in time-honoured fashion by threatening to strike. How it envisages industrial action will help its members or Royal Mail is not wholly clear. The CWU will be holding a strike ballot early next month to protest against potential changes in pay and conditions.

Some of the union’s wider concerns will be shared by many, such as the protection of minimal universal services, guaranteeing a six days-a-week service at a uniform and affordable tariff. This has after all been the hallmark of Royal Mail since its inception and is much prized. But the legislation underpinning the privatisation, which passed through Parliament two years ago, protects the universal service and will remain enshrined in law. That guarantee has been reaffirmed by the Government following its announcement to privatise.

The digital and communication revolution has hit Royal Mail hard, with a fall of 10 million in the volume of letters sent daily. That decline has been arrested to some extent because of the huge increase in goods that are ordered online and need to be delivered.

The benefits of privatisation should not be underplayed. A fleeter-footed business, no longer restricted by government investment rules and with access to private capital, will be better placed to undertake the sweeping modernisation and rationalisation the organisation still needs to go through if it is to compete and vie for business successfully. Upon being privatised, Royal Mail would then not have to compete for scarce government funding which it currently does against other government departments and budgets, such as schools, hospitals, and the police.

But there are risks. The most immediate is that the shares are sold too cheaply, repeating the mistakes of previous flotations and leaving taxpayers cheated and resentful. Over the longer term, the challenge will be a regulatory one. Though it is almost certain that the Royal Mail will continue to be bound by the universal service obligation mandating a six-day nationwide postal delivery – bar senior management tinkering with a system that could loosen some of those ties – what is unclear is how such a costly service will be funded in the future. There may be hope that booming business elsewhere, such as through online shopping, will enable cross-subsidy funding. Critics have warned of unaffordable hikes in stamp prices or even state bailouts.

Mrs Thatcher’s unwillingness to sell off Royal Mail was not only a sentimental attachment to tradition, but sprang from a hard-headed assessment of the political pitfalls of tampering with a venerable national institution. While such hazards remain, a flotation of the Royal Mail is the right decision for the Treasury, and arguably the right decision for the organisation.

In predictable style, Labour has denounced the sale – yet, it was the last government that ended the Royal Mail monopoly and opened up the postal market to competition, thereby making the eventual privatisation inevitable.

Royal Mail can be categorised as one of the foundation stones of the modern British state, one that can trace its origins to 1516, when Henry VIII established the office of Master of the Posts. For it to remain an important part of the national story, it now needs to be a commercially viable venture that is ready and willing to compete in a market with far different demands and pressures.

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Banking, Britain, Business, Economic, Finance, Financial Markets, Government, Society

Bank of England Governor turns fire on bankers…

BANK REFORM

… The bank governor is determined to prevent a Japan-style economic crisis in the UK.

The new Bank of England governor, Mark Carney, has launched a stinging attack on ‘socially useless’ bankers and has called for a ‘change of culture’ in the industry.

The former Golden-Sachs executive, who succeeded Lord King as governor of the Bank of England last month, hit out at self-obsessed bankers who are, he says, detached from reality.

The Canadian has also defended the decision to peg interest rates to unemployment – a move that looks set to see rates remaining at 0.5 per cent for at least another three years.

Mr Carney expressed ‘tremendous sympathy’ for savers who have ‘done the right thing’ but insisted drastic action was needed to ‘secure the recovery’ and prevent a Japanese-style economic crisis in Britain.

This followed his announcement last week that the Monetary Policy Committee (MPC) will not raise rates from o.5 per cent until unemployment falls to 7 per cent or lower. Unemployment is currently running at 7.8 per cent and is not expected to reach the new threshold until the end of 2016.

Turning his fire on the banking industry, Mr Carney said:

… There has to be a change in the culture of these institutions.

He said that ‘finance can absolutely play a socially useful and economically useful function’, but added it must focus on ‘the real economy’. The Bank governor said banking is ‘socially useless’ when it becomes ‘disconnected’ from the economy and society and ‘only talks to itself’.

Mr Carney, who is also chairman of global banking watchdog the Financial Stability Board, added:

… A lot of what we are doing internationally is to strip out this type of behaviour.

The Canadian said the decision to peg interest rates to unemployment – a tactic known as ‘forward guidance’ by central banks – would boost the economy by ‘more than half a percentage point of GDP’ over the next three years.

Amid a fierce backlash from savers he insisted low rates were required to ensure the economy finally recovers from the biggest boom and bust in history.

‘The best way to get interest rates back to normal levels is to have a strong economy,’ he said. ‘We’re in the very early stages of a recovery from the weakest period on record.’

He said Japan made two mistakes after its recession in the early 1990s – failing to fix the banking system and pulling back from measures to stimulate the economy too quickly.

… As a consequence, almost a quarter of a century later, interest rates are still at rock bottom levels in Japan… We don’t want to make those mistakes here in the UK.

COMMENT

Mark Carney’s predecessor, Lord King, started a hard line on the need for banks to reform their cultural practices, by being useful contributors to society and by insisting that they strengthen their balance sheets so they no longer expose the taxpayer to excessive risk.

In some recesses of the banking sector, the appetite for running their operations on wafer-thin levels of capital remained undiminished by the worst financial crisis the world has ever seen.

Some in the City of London had hoped that Mr Carney would administer a snub to King by letting off bankers more lightly.

Given the governor’s role as chairman of the Financial Stability Board, and his personal championing of higher leverage ratios whilst at the Bank of Canada, that always seemed improbable – and so, thankfully, it has proved.

The Bank of England governor, Mark Carney, has defended the decision to peg interest rates to unemployment – a move that looks set to see rates remaining at 0.5 per cent for at least another three years.

The Bank of England governor, Mark Carney, has defended the decision to peg interest rates to unemployment – a move that looks set to see rates remaining at 0.5 per cent for at least another three years.

In his first public pronouncement on the subject Mr Carney made it crystal clear that he, no less than King, wants the banks to start serving the real economy instead of just themselves. He made a point of praising King’s work in improving bank balance sheets and of name-checking Andrew Bailey, who heads the Prudential Regulation Authority, the body that controversially forced Barclays and Nationwide to raise more capital.

The governor’s backing for the moves to make these two financial institutions formulate credible plans to increase their base capitals can longer be in question.

The great myth put about by the banking lobby is that higher levels of capital automatically constrain their ability to lend to households and firms and so hold back growth at a time when the economy is weak.

Whilst this seems to be a notion that has been swallowed wholesale by some in the Treasury and the Department of Business, it is not true.

Banks can improve their capital position by retaining earnings, scaling down bonuses and cutting back on other types of less socially useful business.

The new rules will, over the long-term, increase lending to the real economy, not harm it, and will give us safer and more secure banks, which can only be good for stability and growth.

Undoubtedly, there are plenty of questions over Mr Carney’s big idea of forward guidance, from the impact it will have on savers and on pensions, the risks to inflation and the distinct absence of a clear message due to the get-out clauses.

But on bank reform and conditions for capital holdings, Mr Carney should be applauded.

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