Facebook Slows Sales Growth With Apple’s Privacy Policy

Apple warned that sales growth slowed in the last quarter Of a corporation. App privacy rules continue to create uncertainty for social media companies. Facebook’s ad sales, a major source of revenue, slowed growth in the first quarter since Apple began demanding apps to ask users if they wanted to be tracked in April. This change makes it harder for advertisers to target their ads to the right audience and get information about their performance.

Facebook also announced on Monday that it will change its reporting structure to split a unit called “Facebook Reality Labs” that contains augmented reality and virtual reality products and services. This move separates the unit’s results from its core business segment, which includes its flagship Facebook platform and other apps such as Instagram. The company said its investment in Facebook Reality Labs is expected to reduce overall operating profit in 2021 by about $ 10 billion.

Revenues in the third quarter reached $ 29.01 billion, up 35% from the year-ago quarter, but below the $ 29.56 billion expected by FactSet polled analysts. This is the smallest increase since the fourth quarter of last year, well below the 52% in the first half of this year.

Advertising revenue fell slightly from the second quarter, including the largest complex market segments, the United States and Canada. European sales also declined from the previous quarter.

Facebook warned in its July earnings report that changes in privacy for Apple’s iOS operating system could compromise ad targeting capabilities in the third quarter as more people update their iPhones and iPads.Last week’s snap Ltd

Apple’s policy has accused stock prices of falling by more than 20% as earnings growth is expected to slow this quarter.

Facebook’s third-quarter earnings were up 17% to $ 9.19 billion, or $ 3.22 per share. According to the company, the number of monthly users was 3.58 billion, an increase of 12% over the previous year.

Facebook’s share price rose more than 3% in after-hours trading on Monday after the end of a regular session. The company’s stock fell 5% last week after Snap reported an advertising issue related to Apple’s changes.

Michael Nathanson, an analyst at Moffett Nathanson, said: Social media companies start a busy week of earnings for tech giants. After the bell on Tuesday, Apple and Amazon.com will report quarterly results. Ltd

Numbers scheduled for Thursday. All are expected to achieve healthy top-line growth year-over-year as they continue to embrace the digital products and services offered by consumers and businesses.

According to Jeffreys analysts, global supply chain disruptions were expected to slow Facebook’s sales growth as vendors with limited inventories cut advertising costs. Still, the investment firm said digital advertising is powerful and new advertising products from Facebook’s Instagram service will be up and running to provide a new source of revenue.

Facebook said it expects revenue to grow from $ 31.5 billion to $ 34 billion this quarter, reflecting factors such as “Apple’s iOS 14 changes continue to headwind.”

Parents of Facebook, Instagram and WhatsApp have also tackled other challenges. This includes scrutiny of strict regulations in Washington and criticism of the company’s operations by its own supervisory board following a series of Wall Street Journal investigations called Facebook files.

Share your thoughts

What do you think about the current state of Facebook’s business? Join the conversation below.

Last week, UK competition regulators fined Facebook £ 50.5 million ($ 69.6 million worth) for violating reporting requirements while reviewing a proposal to acquire Giphy, an online provider of animated images. Facebook has separately agreed to pay a monetary penalty as part of its settlement with the US government. It accused social media companies of illegally booking lucrative jobs for migrant workers sponsored for permanent residence, instead of looking for and considering available US workers.

Facebook CEO Mark Zuckerberg has recently promoted his vision for the Metaverse. It is loosely defined as a broad future online world where people exist and interact in a shared virtual space through digital avatars. He recently described the Metaverse as the next generation of the Internet and the next chapter in his company. Facebook said last week it plans to create 10,000 jobs in Europe over the next five years to work on Metaverse-related efforts.

Zuckerberg emphasized the message in the company’s earnings report. “I’m particularly excited about the roadmap that helps build creators, commerce and the Metaverse,” he said. Facebook said it expects to increase its investment over the next few years. The company added that next year’s costs will be as much as $ 97 billion for technical staff, product staff, and infrastructure-related costs.

Sarah E. Needleman

By: Sarah E. Needleman

Source: Facebook slows sales growth with Apple’s privacy policy – Texas News Today

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Braze Begins The IPO Process Amid Pandemic-Era Growth In Digital Marketing

A decade after its founding, the marketing tech startup Braze is beginning the process of becoming a publicly traded company.

Today, the New York-based company filed its Form S-1 with the U.S. Securities and Exchange Commission to go public on the Nasdaq stock exchange under the ticker symbol “BRZE.” Braze is part of the growing industry of marketing campaign management software companies, a market sector that the research group IDC says could reach $15 billion in 2021 and $19.4 billion in 2024.

The customer engagement company provides technology for brands to interact directly with consumers through various channels. By using Braze’s platform, companies can use data from email, apps and other digital platforms to better understand their customers before targeting them with personalized messages. Well known brands that use Braze for their marketing include Burger King, Anthropologie, Birchbox, Grubhub, IBM, Hinge, Nascar, PayPal, HBO, iHeartRadio, Sephora and Rosetta Stone.

According to its SEC filing, Braze reported large revenue growth in the past two years with $150.2 million in fiscal-year 2021 and $96.4 million in 2020. While the company has experienced momentum in 2020 and 2021, it’s still not profitable: Net losses totaled $31.43 million in 2021 and $31.36 million in 2020. Braze also reported annual recurring revenue passing $200 million in 2021, up from $100 million in 2019.

When Braze was cofounded in 2011 by CEO Bill Magnuson, Jon Hyman and Mark Ghermezian, it wanted to build a business that was mobile-first to help companies adapt to changing consumer behaviors. At the time of publication, the company was unavailable for comment about its IPO plans, but in a letter included in the S-1 Magnuson wrote that the “goal was to build a company that would capitalize on new technology to help the world’s best companies grow by trusting us with their most valuable asset: their customer relationships.”

“While technological change drove us forward, we knew that humanity should always guide us,” Magnuson wrote. “Great human relationships are built on mutual understanding, engaging communication and shared experience. It’s thus no surprise that the secret weapon of exceptional, enduring companies is the quality of their customer engagement.”

In the past two years, Braze has continued to grow its customer base from 728 in January 2020 to 890 January 2021 and 1,119 as of July 2021. The company has also continued to scale its cloud-based platform and now reaches 3.3 billion monthly active users through its customers’ applications, websites and other digital platforms—up from 2.3 billion in January 2020 and from 1.6 billion in January 2019.

Issues around privacy are also something Braze listed as a risk factor, citing international, federal and state regulations including newly passed legislation in California, Virginia and Colorado and existing laws such as the European Union’s General Data Protection Regulation. Several pages of the S-1 detail many of the laws and provide a glimpse into the various ways rules around data privacy could impact the company both legally and financially.“The laws are not consistent, and compliance in the event of a widespread data breach could be costly,” according to the SEC filing. “In addition, while we contractually limit the types of data our customers may process and store using our platform, we cannot fully control the actions of our customers. The failure of customers to comply with their contractual obligations may subject us to liability, and we may not have sufficient recourse to cover our related liabilities.”

Braze’s S-1 filing comes just a day after the advertising technology company Basis Globally Technologies—formerly known as Centro—confidentially filed its own S-1 with the SEC, further adding to the string of ad-tech and mar-tech IPOs that have taken place this year. Companies that have either gone public or begun the IPO process in 2021 include the content recommendation company Taboola, ad measurement firms DoubleVerify and Integral Ad Science and other marketing tech companies such as Zeta Global and Sprinklr.

Over the past decade, Braze has raised $175.1 million, according to Crunchbase. It raised an $80 million Series E round led by Meritech Capital Partners in 2018, just a year after raising a $50 million Series D round led by ICONIQ Capital. Other investors have included Battery Ventures, InterWest Partners, Rally Ventures and Blumberg Capital.

While Braze was growing quickly even before the Covid-19 crisis began, the company said the pandemic has accelerated the adoption of digital and mobile usage. Braze is also betting on the increased reliance on first-party data, especially as companies adapt to finding ways to reach people without as much third-party aggregated data.

“Modern brands know that when a customer is intermediated by a third-party aggregator, ad platform or distribution channel, it’s not really their customer relationship,” Magnuson wrote. “The highest value customer relationships are informed by first-party data and cemented through direct engagement.”

Follow me on Twitter or LinkedIn. Send me a secure tip.

I’m a Forbes staff writer and editor of the Forbes CMO Network, leading coverage of marketing and advertising especially related to the ever-evolving role of chief

Source: Braze Begins The IPO Process Amid Pandemic-Era Growth In Digital Marketing

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3 Bonding Exercises Businesses Are Using To Combat The Great Resignation

Quirky activities can improve employee retention and company culture, according to Inc. 5000 CEOs. It’s cheesy, but it works. So says Frank B. Mengert, founder and CEO of ebm, a North Haven, Connecticut-based benefits and HR tech company, about his company’s weekly video call, known as “Friday Vibes.” The one rule: You can talk about anything but work.

These unconventional meetings–ebm’s sometimes involve games like Two Truths and a Lie–have helped reduce turnover in the company since they started them in May 2020. At a time when employees are quitting in record numbers and rotating through workplaces without ever meeting co-workers in-person, such bonding activities can potentially improve team dynamics, says Timothy Golden, professor at Rensselaer Polytechnic Institute’s Lally School of Management and a longtime researcher of remote work.

From Inc. 5000 CEOs, here are three ways to forge bonds between team members in your still-virtual workplace.

1. “Anything but work” check-ins

Consistency is crucial to Friday Vibes, Mengert says. Every Friday at 4 p.m., anywhere from half to all of ebm’s 47 employees hang out on one Zoom call and chat about non-work topics or play games, especially with new hires. Most Friday Vibes go over the allotted time, he adds. Serious topics like mental health come up sometimes, or the team might spend the whole hour discussing types of cars they’ve driven before.

A couple of months into the pandemic, the team at Burlingame, California-based gaming and strategy research firm IDG Consulting started to look a little haggard, says CEO and president Yoshio Osaki. The 11-person company went remote in 2018 but over time, IDG employees lost an element of interpersonal connection. “We were our own little islands,” he says.

When the pandemic hit and people started going through lockdowns and additional childcare stress, Osaki finally realized that since the company went remote he had been checking in on what people were doing, not how they were doing. And morale seemed to be taking a hit as a result.

That’s actually pretty common in a remote environment, Golden says. People tend to be more task-oriented than relationship-oriented, so managers have to find ways to rebuild interpersonal trust and rapport virtually. Osaki’s solution was to implement a 30-minute mandatory non-work chat every other week (it’s since expanded to 60 minutes).

The calls provided fun bonding time, but some turned less lighthearted. Osaki realized that some employees needed additional help and added an annual $1,000 self-care stipend to make it easier to pay for things like therapy. He learned an employee had back pain and bought them an ergonomic chair.

Another had gotten into building computers, so they bought him some tools, and he ended up building one for their data scientist. And beyond the insight on employees’ needs, Osaki says, “We saw an increase in productivity as well as creativity.” In sum, starting the chat has been an important factor in making 2021 a record year for IDG’s revenue.

2. Gratitude sharing

Telling your employees you appreciate them seems like obvious advice–but helping them do it in structured ways helps you keep from losing them, according to Keegan Caldwell, founder and managing partner of Boston-based Caldwell Intellectual Property Law. Every Friday at noon, employees share whom they’ve been grateful for over the last week.

“What we found was this was the most important meeting for us to have,” Caldwell says. He started it three years ago, inspired by his 12-step recovery process and his ability to make it through the associated challenges. Since then, he estimates, it’s improved retention by 10 percent.

For Boston-based Winthrop Wealth and CEO Max Winthrop, it’s about the “small wins.” On their morning call, the team has the option to share their tiny victories, like putting in extra effort to help a client’s family after their spouse died. The company started it after doing a workshop in the fall of 2020 with self-actualization and sharing activities–and Winthrop hasn’t lost an employee since. It also helps him keep perspective as a leader, he says: “The small contributions add up to the greater success.”

3. Games and experiences

Every month or so, employees at government IT contractor Kech play bingo and Pictionary, compete for who has the cutest pet photo, or speculate about how they would survive a zombie apocalypse. Chris Carpenter, the Williamsburg, Kentucky-based company’s CEO and co-founder, likes to mix it up. Her company, which operates call centers for government services, had high turnover before the pandemic. But she says she’s managed to keep a core group of employees by adding fun and human connection into their workdays.

Most events come with prizes, and Carpenter estimates she spends $2,000 on gift cards a year for the winners. She organizes them herself and regularly gets messages from employees asking when the next game will be.

When it comes to games, pick something that is collaborative rather than competitive to boost organizational cohesion, says Sean Newman, a visiting professor at Rollins College and senior vice president of operations at London-based financial services firm Aon. And try to use bonding activities or games to build up relationships between specific employees. “To the extent that your games can show the manager really cares and establish that relationship… it can be a real positive outcome for retention,” he says.

Games and more elaborate, planned events can help avoid the dreaded Zoom happy hour, says Jonathan Conelias, CEO of Boston-based ReElivate, which provides virtual experiences for clients including Amazon and Google. His advice: Try to plan something special and interesting that gives employees a shared experience to refer to, like an escape room.

Lauren Greenwood’s company, YouCopia, which is based in Chicago and provides organizational home goods for consumers, simply does  “welcome lunches”  on the first day for new hires with three weird questions for everyone else to answer. (The meals were virtual for part of the pandemic but now are in-person for smaller groups.) If you’re too busy to organize creative bonding activities–or it’s just not your thing–hire someone to handle it, she advises.

By Gabrielle Bienasz, Editorial assistant, Inc.@gbienasz

Source: 3 Bonding Exercises Businesses Are Using to Combat The Great Resignation | Inc.com

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Biggest U.S. Retailers Charter Private Cargo Ships To Sail Around Port Delays

Source: Biggest U.S. Retailers Charter Private Cargo Ships to Sail Around Port Delays – WSJ

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Corporate Taxes Poised to Rise After 136-Country Deal

 
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Nearly 140 countries agreed Friday to the most sweeping overhaul of global tax rules in a century, a move that aims to curtail tax avoidance by multinational corporations and raise additional tax revenue of as much as $150 billion annually.

But the accord, which is a decade in the making, now must be implemented by the signatories, a path that is likely to be far from smooth, including in a closely divided U.S. Congress.

The reform sets out a global minimum corporate tax of 15%, targeted at preventing companies from exploiting low-tax jurisdictions.

Treasury Secretary Janet Yellen said the floor set by the global minimum tax was a victory for the U.S. and its ability to raise money from companies. She urged Congress to move swiftly to enact the international tax proposals it has been debating, which would help pay for extending the expanded child tax credit and climate-change initiatives, among other policies.

“International tax policy making is a complex issue, but the arcane language of today’s agreement belies how simple and sweeping the stakes are: when this deal is enacted, Americans will find the global economy a much easier place to land a job, earn a living, or scale a business,” Ms. Yellen said.

The agreement among 136 countries also seeks to address the challenges posed by companies, particularly technology giants, that register the intellectual property that drives their profits anywhere in the world. As a result, many of those countries established operations in low-tax countries such as Ireland to reduce their tax bills.

The final deal gained the backing of Ireland, Estonia and Hungary, three members of the European Union that withheld their support for a preliminary agreement in July. But Nigeria, Kenya, Sri Lanka and Pakistan continued to reject the deal.

The new agreement, if implemented, would divide existing tax revenues in a way that favors countries where customers are based. The biggest countries, as well as the low-tax jurisdictions, must implement the agreement in order for it to meaningfully reduce tax avoidance.

Overall, the OECD estimates the new rules could give governments around the world additional revenue of $150 billion annually.

The final deal is expected to receive the backing of leaders from the Group of 20 leading economies when they meet in Rome at the end of this month. Thereafter, the signatories will have to change their national laws and amend international treaties to put the overhaul into practice.

The signatories set 2023 as a target for implementation, which tax experts said was an ambitious goal. And while the agreement would likely survive the failure of a small economy to pass new laws, it would be greatly weakened if a large economy—such as the U.S.—were to fail.

“We are all relying on all the bigger countries being able to move at roughly the same pace together,” said Irish Finance Minister Paschal Donohoe. “Were any big economy not to find itself in a position to implement the agreement,  that would matter for the other countries. But that might not become apparent for a while.”

 

Congress’ work on the deal will be divided into two phases. The first, this year, will be to change the minimum tax on U.S. companies’ foreign income that the U.S. approved in 2017. To comply with the agreement, Democrats intend to raise the rate—the House plan calls for 16.6%—and implement it on a country-by-country basis. Democrats can advance this on their own and they are trying to do so as part of President Biden’s broader policy agenda.

The second phase will be trickier, and the timing is less certain. That is where the U.S. would have to agree to the international deal changing the rules for where income is taxed. Many analysts say that would require a treaty, which would need a two-thirds vote in the Senate and thus some support from Republicans. Ms. Yellen has been more circumspect about the schedule and procedural details of the second phase.

Friction between European countries and the U.S. over the taxation of U.S. tech giants has threatened to trigger a trade war.

In long-running talks about new international tax rules, European officials have argued U.S. tech giants should pay more tax in Europe, and they fought for a system that would reallocate taxing rights on some digital products from countries where the product is produced to where it is consumed.

The U.S., however, resisted. A number of European governments introduced their own taxes on digital services. The U.S. then threatened to respond with new tariffs on imports from Europe.

The compromise was to reallocate taxing rights on all big companies that are above a certain profit threshold.

Under the agreement reached Friday, governments pledged not to introduce any new levies and said they would ultimately withdraw any that are in place. But the timetable for doing that has yet to be settled through bilateral discussions between the U.S. and those countries that have introduced the new levies.

Even though they will likely have to pay more tax after the overhaul, technology companies have long backed efforts to secure an international agreement, which they see as a way to avoid a chaotic network of national levies that threatened to tax the same profit multiple times.

SHARE YOUR THOUGHTS

Do you agree with the global minimum tax on corporations? Why or why not? Join the conversation below.

The Organization for Economic Cooperation and Development, which has been guiding the tax talks, estimates that some $125 billion in existing tax revenues would be divided among countries in a new way.

Those new rules would be applied to companies with global turnover of €20 billion (about $23 billion) or more, and with a profit margin of 10% or more. That group is likely to include around 100 companies. Governments have agreed to reallocate the taxing rights to a quarter of the profits of each of those companies above 10%.

The agreement announced Friday specifies that its revenue and profitability thresholds for reallocating taxing rights could also apply to a part of a larger company if that segment is reported in its financial accounts. Such a provision would apply to Amazon.com Inc.’s cloud division, Amazon Web Services, even though Amazon as a whole isn’t profitable enough to qualify because of its low-margin e-commerce business.

The other part of the agreement sets a minimum tax rate of 15% on the profits made by large companies. Smaller companies, with revenues of less than $750 million, are exempted because they don’t typically have international operations and can’t therefore take advantage of the loopholes that big multinational companies have benefited from.

Low-tax countries such as Ireland will see an overall decline in revenues. Developing countries are least happy with the final deal, having pushed for both a higher minimum tax rate and the reallocation of a greater share of the profits of the largest companies.

 
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How Taking A Step Back Can Lead To Business Growth

For most business owners, the saying “one step forward, two steps back” sounds miserable, but in many cases, taking a step backward can propel you forward and actually change your life for the better.

As an entrepreneur, you have responsibilities outside work. These might include providing for your family’s needs, teaching your children values and growing your relationships. It’s a lot to manage, especially when you’re bogged down fixing issues in your business or exhausted from overwork.

If your business demands so much time that it becomes the obstacle that keeps you from doing the things you’ve always said you wanted to do, it can leave you feeling defeated and depleted, no matter how “successful” you are.

Business owners who feel stuck in their business must first create systems. These systems not only benefit you and your family. They benefit the people in your business and can fuel the growth of your business like wildfire when implemented properly.

My company recently walked a client through this process. I hope following this process will be transformative for your business and life, as well.

The client and his family lived a life that from the outside would seem normal. They would take a vacation once per year and go out to dinner once or twice per week. They would spend as much time together as they could, but something was missing, causing him and his family to suffer because of it.

As a business owner, you can likely relate to this story. Things are going well enough — but not great. It’s not what you envisioned your life looking or feeling like.

Our client was a reliable and diligent business owner. He showed up when he said he would. His attention to quality fed his business so he got most of his business through word of mouth. In fact, he would have to turn business away because he was too busy. So, where’s the problem?

The problem was that he was the business. He had a couple helpers working for him, but it was just one small crew. If he couldn’t schedule something on his personal calendar, it couldn’t get done.

He came to us looking to outsource his accounting. It was his first step to buy time back. financial

Over a few calls, he opened up about how much he hated his current business situation, so I asked him, “Why don’t you do what you did with your accounting and unload more of the workload and responsibilities in other parts of your business?”

The first step is always the hardest, because oftentimes, it’s a step back. Most business owners know that if they can start delegating in more areas of their business, they will be able to do what they want. They can live a life of financial freedom and time freedom. They can create more memories with their family and take back control of their life.

After some review, I explained to our client that he would easily qualify for equipment financing with little upfront capital. This would mean he could hire another crew, doubling his ability to serve his customers.

The key to duplicating yourself is duplicating the systems and processes that allow for quality of work to remain high. For most, this is the biggest step back. You see margins drop and your time expenditure temporarily increases. It is predictably more chaotic and uncomfortable.

On the other side of that hard work, though, is a fully operating replica of your workmanship without you doing the work. For people like the client above, this means not having to turn down jobs or work overtime. You can then duplicate your craftsmanship as needed to service growing business inquiries.

To do so, there are a couple of steps you can take in your business to help ensure it stays healthy as you grow. First is ensuring you have a personal runway: Lower margins will mean less available money for you as the owner. Be ready for this with your own finances by not making any large personal purchases that will overextend you before scaling. This should be obvious but can get you into trouble if you’re expecting to be able to pay yourself more in the beginning of the scaling process.

If you’re financing equipment and hiring more crews, your monthly expenses will increase drastically. Be prepared for this by ensuring you have a full pipeline. Make sure you allocate some of your budget to ramp up your marketing, and pay attention to the number of projects you earn from word-of-mouth referrals so you can estimate how many leads you’ll get per project your first team accomplishes.

Also, ensuring you have a lead generation system in place that you can dial up or dial back is key. Not just relying on word of mouth but having an avenue of getting leads through paid ads and understanding how much those leads generally cost and how many convert to customers will also allow you to have more security in scaling. It will feel less risky and you’ll have a feeling of investing your money into your future instead of risking the future of your company trying to build it bigger.

Eventually, you will be able to fully step back and own the business instead of being owned by the business. But how?

Create leaders from within your organization. Train them to take ownership of their work by incentivizing with bonuses tied to profit earned and created. Create bullet-proof standard operating procedures that allow high-quality work to be replicated on every job. Invest in your team members’ success so they’ll invest in yours.

What happened with our client? Within 18 months, he has four crews and only has to work 20 hours a week doing the creative stuff he prefers. The best part? It’s attainable for you, too, if you are willing to take the leap of stepping back to skyrocket your business growth.

Follow me on Twitter or LinkedIn. Check out my website.

Cofounder Easier Accounting & Real Business Owners. 20+ years of experience growing & running multiple businesses. Author & public speaker.

Source: How Taking A Step Back Can Lead To Business Growth

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China Leaps Ahead in Effort to Rein In Algorithms

Beijing is building a system to ensure that the automated processes of Internet platforms are fair, transparent and in line with the ideology of the Communist Party

Regulators called for the algorithms to be fair and transparent, following the ideology of the Communist Party of China.

The campaign puts China one step ahead in policing tech forums, as governments around the world grapple with how to respond to automated technologies that reshape business, social interactions and politics.

Earlier this year, the European Union proposed restricting certain uses of artificial intelligence to reduce potential harm. In the US, lawmakers are investigating Facebook’s influence Inc. NS

Algorithm-driven content on users, after Businesshala reported that the company’s Instagram app has a negative impact on children’s mental health.

China has targeted algorithms more aggressively under the close watch of its domestic tech sector. Draft guidelines released this summer would require algorithms to protect the rights of workers and consumers, and restrict the use of algorithms to manipulate user accounts, online traffic or search results.

“We don’t necessarily see China as a regulatory innovator, but in this case they are,” said Rogier Creamers, an assistant professor at Leiden University in the Netherlands, which focuses on Chinese technical policy.

Under a three-year plan released last week, Chinese regulators outlined steps to monitor algorithms, including a registration process and the establishment of a technical team to evaluate the mechanisms and risks of an algorithm.

The latest campaign builds on a broad regulatory push in China’s tech sector that has prompted investigations into some of the country’s biggest companies, including e-commerce giant Alibaba Group Holding. Ltd.

The push is partly directed at business practices that regulators deem harmful so workers or consumers.

Companies such as Meituan and Didi have faced heat over the working conditions of drivers, as well as calls for creating algorithms that schedule workers’ tasks and pay more transparently. Officials have also warned tech companies this year against exploiting personal data and using algorithms to charge discriminatory prices from customers.

China’s Cyberspace Administration, Alibaba and Didi did not respond to requests for comment. China is currently celebrating its National Day holiday.

Meituan declined to comment. The company previously published an explanation of its delivery algorithm and said it is making changes to give delivery drivers more flexibility.

Experts said it would be a challenge for regulators to tighten controls on algorithms without hindering development or innovation in one of China’s most successful sectors. Internet companies rely on complex mathematical instructions for tasks ranging from analysis of social-media behavior to mapping optimal distribution routes.

While algorithms have contributed to technological advancement and societal development, the CAC said in last week’s announcement, they have also brought “challenges to ideological security, a fair and equal society, and the protection of the legal rights of Internet users.”

Beijing-based partner at law firm Bird & Bird, James Gong, said tighter regulatory oversight of algorithms is likely to impact China’s internet industry.

Mr. Gong said of the country’s Internet companies, “Almost all of them use algorithms and automated decision-making and profiling to ensure that their marketing is more accurate and to improve business efficiency and increase profits.” Is.”

A senior manager at ByteDance Ltd said the requirement to register the algorithm would only add a step, restricting the learning of user behavior and recommendation services, as well as requiring disclosure of proprietary technology that could hurt the company’s business. .

ByteDance, which owns social-media sensation TikTok and its Chinese sister app Douyin, is known for its powerful algorithms that drive user recommendations and content.

“The regulatory environment is clear, and we need to start thinking about how to adjust accordingly,” the ByteDance manager said. He said that since most of the new regulation is still under debate, it is difficult to say what the immediate commercial impact will be.

ByteDance did not respond to a request for comment.

Sam Sachs, senior fellow at Yale Law School’s Paul Tsai China Center, said China’s approach could appeal to other countries that want a thriving digital economy while maintaining a firm grip on political and social discourse. However, she said there is still a lot of uncertainty over the details and enforcement of these new rules.

“I think they understand that this is an impossible task that they have set for themselves,” Ms Sachs said. “I would also say that three years can be ambitious.”

The CAC guidelines also state that algorithms used by Chinese companies must uphold core socialist values ​​and promote “positive energy” in content provided to users.

China is taking more control of online content and communities. In recent months, it has severely restricted online-videogame time for players under the age of 18, banned pop-idol rankings and criticized online male personalities for being too sacrilegious. are visible.

“It’s almost taking online censorship up a notch,” Ms Sachs said. “It is saying that you have an obligation to ensure that any content that is algorithmically driven that you feed into the online space is to shape socialist values.”

By: Stephanie Yang, Reporter, The Wall Street Journal

Source: China Leaps Ahead in Effort to Rein In Algorithms

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Apple Pay Fees Vex Credit-Card Issuers

Banks are nudging Visa to change the way it processes some Apple Pay transactions, according to people familiar with the matter.

According to people familiar with the matter, banks are pressing Visa to change the way some Apple Pay transactions are processed. Some banks are pushing back, weakening the card network Visa Inc.

To change the way some Apple Pay transactions are processed, according to some. This change will reduce the fees that banks pay to Apple.

According to people familiar with the matter and a document seen by Businesshala, Visa plans to implement the change next year. Apple executives have told Visa officials they oppose the change, the people said. The two companies are in discussion and it is possible that the planned change will not start.

Currently, banks pay the fee to Apple when their cardholders use Apple Pay. Under the new process planned, the fee will not apply to automatic recurring payments such as gym memberships and streaming services.

The dispute reflects a long-running tension between the tech and finance giants. Companies like Apple and Amazon.com Inc.

Consumer payments have been expanding over the years. Banks often bargain with them for fear of being left behind. But deals don’t always work out: Alphabet Inc. NS

For example, Google is dropping plans to introduce bank accounts to users. Apple said in a statement that “our banking partners are an important part of the growth of Apple Pay.”

The company said, “Our bank partners continue to see the benefits of providing Apple Pay and invest in new ways to implement and promote Apple Pay for our customers for secure and private in-store and online purchases. “

Major networks including Visa and MasterCard Inc.

There are effective gateways between banks and Apple Pay, as they help to load banks’ cards into mobile wallets. The change will apply to Visa-branded cards, though other networks may follow suit.

Mobile wallets are smartphone apps on which people can load their debit or credit-card credentials and use their phones instead of tangible cards to make payments. The transaction fee is charged to the buyer’s card.

When Apple introduced Apple Pay in 2014, the iPhone had already discontinued the music player, camera, and GPS system. Banks and card networks are worried it will displace card payments as well.

Banks agreed to pay 0.15% to Apple for every purchase made by their credit cardholders. (They pay a separate fee on debit-card transactions.) Those charges account for most of the revenue Apple makes from its digital wallet, according to people familiar with the matter.

The terms had the potential to be uniquely attractive to Apple. Banks do not charge Google for its Wallet.

Visa and MasterCard also agreed to make an unusual concession to Apple: Apple will be able to choose which issuers it will allow on Apple Pay and which issuers will accept cards, according to people familiar with the matter. Visa and MasterCard generally require that all entities that accept their credit cards must accept them. Apple agreed not to develop the card network to compete against Visa and MasterCard, the people said.

But since then, customers have been slower to adopt Apple Pay than bank and card network executives expected. And some bank executives were outraged when Apple launched its own credit card with Goldman Sachs Group in 2019 Inc.,

People familiar with the matter said, because it made Apple a direct competitor.

Apple said in a statement that it “works closely with approximately 9,000 banking partners to offer Apple Pay to customers in approximately 60 countries and territories.”

Visa has shared its planned technological change with at least a few banks in recent months. A document reviewed by the Journal explains the new process that doesn’t mention fees, but details a change to so-called tokens issued by Visa for mobile-wallet payments.

When consumers load their credit cards on Apple Pay, Visa issues a special token that replaces the card number. This allows the card to work on Apple Pay and also helps protect the card in a potential data breach, among other benefits.

Visa is planning to start using a separate token on recurring automatic payments. This effectively means that after making the first payment on the subscription, Apple will not receive a fee on the following transactions.

According to people familiar with the matter, some of the larger banks first tried to lower their Apple Pay fees around 2017, but were not successful.

By: AnnaMaria Andriotis

AnnaMaria Andriotis reports on credit cards for The Wall Street Journal. She covers Visa, Mastercard, American Express and Discover as well as the big banks’ credit-card divisions. She also writes about consumer credit broadly, with a focus on issues that have a big impact on U.S. borrowers. She has been a reporter with The Wall Street Journal since 2014 and got her start at Dow Jones more than 10 years ago. You can email AnnaMaria at annamaria.andriotis@wsj.com and follow her on Twitter @AAndriotis.

Source: Businesshala News Exclusive | Apple Pay Fees Vex Credit-Card Issuers

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The Future Is Looking Up for Small Businesses But Hiring Struggles Continue

A shortage of workers remains a big concern for business owners, and there’s no clear evidence yet that the end of federal unemployment benefits is boosting the labor supply

A lot has changed since unemployment reached a record rate of 14.8 percent in April 2020. Job openings are at their highest number since 2000 — and businesses can’t seem to fill them fast enough.

After any number of pandemic-related setbacks, small businesses are once again optimistic about the near future. Nearly three-fourths expect to increase sales in the next six months — but hiring struggles are putting a damper on these prospects, according to a survey of 500 small-to-medium-size businesses conducted in August 2021 and released yesterday by PNC.

Labor availability is the most-cited concern, and of the those experiencing hiring difficulties, 58 percent point to enhanced federal unemployment benefits as the culprit. With expanded federal unemployment benefits having ended on Labor Day — reducing unemployment pay by $300 a week — businesses widely believed this cut-off would lead to a surge in job applicants.

But the expected surge hasn’t yet materialized. A study released in late August authored by economists Kyle Coombs of Columbia University, Arindrajit Dube of the University of Massachusetts Amherst, and others, showed that in the 22 states that ended these federal employment benefits earlier in June, there was only a small rise in employment in subsequent months — 4.4 percent.

Small businesses are now addressing the labor shortage directly by improving pay and benefits. Of those businesses surveyed, more than four in 10 say they’ve increased compensation to help attract and retain talent, and 44 percent have started allowing more flexible work arrangements. Nearly half have also begun implementing improved health and safety measures.

These changes don’t come without a cost. More than half (54 percent) of business owners surveyed say they anticipate raising prices to compensate for increased labor costs and inflation. Once this cost is passed on to consumers, individuals who previously received federal unemployment benefits may, at last, feel increasing financial pressure to re-enter the job market.

By Rebecca Deczynski, Staff reporter, Inc.@rebecca_decz

Source: The Future Is Looking Up for Small Businesses — But Hiring Struggles Continue | Inc.com

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Bull Markets Usually Don’t End With a Bang

Unlike bear market lows, which tend to be short and sharp, bullish stock market highs tend to occur gradually over time as a sector or investment style first peaks and declines. , then another.

This means that investors should not manage their equity portfolios assuming that there will be a specific day before which it would make sense to be 100% invested and then be in cash. Even if the precise timing of the stock market wasn’t incredibly difficult, it would still make more sense to gradually build up cash as individual positions hit their targets.

Of course, there is no way to know whether the current stock market – which abruptly retreated from record highs in late September, ahead of Friday’s rally to begin October – has entered such a protracted peak process. But the bull market will end someday, if it hasn’t already, and it’s important to review the characteristics of past highs so that you don’t manage your portfolio on the assumption that you will be able to peak in real time.

A recent illustration that not all sectors and styles are reaching their bullish highs at the same time appeared at the top of the internet stock bubble in early 2000. Although the S&P 500 and Nasdaq Composite indexes did reach their bullish highs in March 2000, value stocks – and small cap value stocks, in particular – continued to rise. The S&P 500 at its October 2002 bear market low was 49% lower than its March 2000 high, and the Nasdaq Composite was 78% lower, but the average value of small-cap stocks was 2% higher than what it was in March 2000, according to data from Dartmouth professor Kenneth French.

Although this is only an example, it is not unique. Consider what I found while analyzing the 30 bull market highs since the mid-1920s that appear in the timeline maintained by Ned Davis Research. In each case, I determined the dates on which various sectors of the market reached their particular bullish highs: the large, mid and small cap sectors, as well as the styles of value, growth and mix, as measured by the market. share price. -accounting reports. On average over the 30 bull market highs, there was a 225-day gap between the first date one of these sectors peaked and the last. It’s been over seven months.

There are exceptions, especially when an external event causes the market to collapse and virtually all sectors fall in unison. The stock market crash of 1987, as well as the declines following the terrorist attacks of September 11 and the pandemic lockdowns of March 2020, are good examples of this. But in most cases, it is more accurate to view a bullish top as a process rather than a one-time event.

Another reason to view market highs as a process is that, the day major stock indices such as the S&P 500 hit their bullish highs, you will have any idea that a bear market is imminent. . Instead, you’ll likely be caught up in the exuberance of the moment. Only with hindsight will it become clear that a bear market was starting.

This exuberance leads investors to be too heavily invested in stocks during the later stages of the bull markets. Believing that the exact day of the peak has not yet been reached, they hold on to their stock positions for too long. Viewing market highs as a process can counterbalance this exuberance, as it causes investors to focus on their individual positions rather than on the market as a monolithic whole.

Many resist this advice because their memories play tricks on them, leading them to believe that it is possible to spot a bullish top the moment it occurs. This is certainly not the case, according to my company’s daily monitoring of advice from stock timers – advisers who tell clients how much of their investment portfolios should be in stocks and cash. Over the past four decades in which the S&P 500 peaked in the bull market, the average level of exposure to equities recommended by these timers was 65.7%. This is a higher level of exposure than 95% of all other days over the past 40 years.

On the days when the S&P 500 hit its lowest bear market level, by contrast, the average exposure level recommended by stock timers was only 5%. Remember October 2007. Even though the S&P 500 was on the verge of entering a 57% 16-month decline, hardly any of the 100 or so stock stopwatches my company monitors were considering anything. the type.

This failure was true even for market timers with the best long-term records entering that month. One of the long-term top performers at the time was telling clients that a bear market was such a distant possibility it wasn’t even on his radar screen. Another went from full investment to 25% margin – borrowing to invest even more in stocks – the day before the exact day of the S&P 500 bull market high.

If these market professionals with good, long-term track records weren’t able to anticipate the onset of one of the most serious bear markets in U.S. history, you’re kidding yourself if you think that you can always do better. You are more likely to be successful by viewing the end of a bull market and the start of a bear market as a process rather than a one-time event.

By: Mark Hulbert

Mr. Hulbert is a columnist whose Hulbert Ratings follows news bulletins about investments that pay a fixed fee to be audited. He can be contacted at reports@wsj.com.

Source: Bull Markets Usually Don’t End With a Bang – WSJ

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