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tv   Bloomberg Business Week  Bloomberg  March 18, 2018 7:00am-8:00am EDT

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carol: welcome to "bloomberg businessweek." i'm carol massar. jason: we are inside our headquarters in new york. carol: what is new about the leaders on wall street. jason: plus, the hottest local economies across the country. carol: and amazon hitting its prime. jason: all of that is ahead on "bloomberg businessweek." ♪ carol: we are with the editor in chief of "bloomberg businessweek," joel webber. and a very timely story that looks at succession planning we are seeing at well-known
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big banks, financial firms, and it starts with a wonderful story about my cohost that looks at blackstone. joel: we tried to make this a package that looks at a wider moment of succession on wall street and jason looks at buy side. blackstone is gigantic and they recently had someone named jonathan gray. jason's story is a look at gray, who has been this real estate guru and when you look within blackstone and their portfolio, they are more of a real estate company than a private equity company. jason: it was a fascinating story to work on in some ways because this has been a career success on success for jonathan gray. he is 48 years old, the only job he has had is at
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blackstone. he got there out of university of pennsylvania and did signature deals along the way, they owned hilton hotels for a while, and now he finds himself in the number two job at a firm that controls $434 billion in assets. carol: this is a firm that is so identified with schwartzman. he is not going anywhere. joel: no, but the important thing with all these succession stories is it is about stability. making sure not only employees know who is in charge, but investors. that is a powerful thing with gray because when we talked to investors, one of the things you get is his acute eye. he would remember specific umbers, that is like ocd probably. there is a big takeaway for that. if you are entrusting billions of dollars to these people, that is the kind of professionalism you expect. jason: it is important to note
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in the private equity world that this has been a consistent theme. not only at blackstone, but the other names people probably know. kkr, carlisle, apollo, all of these firms have gone through these processes the past with for months. joel: and on a bigger macro level, this is 10 years after the financial crisis. the people who stared us through the financial crisis are passing the baton to the next generation. carol: speaking of that, let's talk about another story that is part of this. what happened with goldman this week. lloyd blankfein took us hrough the crisis. he is one of the great leaders on wall street, but got pressured to think about his succession plan. joel: we don't know the nuances of this. it started with a tweet from "the wall street journal" and
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then chaos unfolded, which culminated with a breaking news announcement monday that one of the two heirs apparent at goldman was out of the picture, schwartz. solomon, his counterpart, has become the heir apparent. hat whole story is the succession package because of the backdrop. we talked about buyside, now we can talk about sell side. this is the ivory tower of wall street. who is next in charge is a big deal. jason: we heard more about what is happening from goldman and jpmorgan. >> two of the most fascinating guys on wall street. >> leaders of the preeminent banks, the two preeminent global banks. so many parallels between them. they started in 2006 within six months of each other. nobody knows this, but dimon had a chance to work with goldman sachs at the beginning of his career. they rose to prominence, both new yorkers. from brooklyn and queens,
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respectively. they both had cancer, which they beat. all these parallels and i was looking at a picture of them during the financial crisis. dimon, his alpha male-ish self and blankfein with a cheshire at grin. i thought that is a buddy comedy. we have all seen that movie. we have seen that movie poster. jason: one of these things you point out is this idea that you have these two guys who have a very successful buddy comedy. very lucrative. these are caretakers, not entrepreneurs, who have both become billionaires, we think. and probably have put as much of a stamp on wall street as any two ceo's in history. hugh: you look at them and yes, bloomberg obviously tracks these things and we have determined they are both
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billionaires, and they got there largely through owning their own company stocks. not as bezos has, founding a company, they are caretakers. that is a little unusual. dimon gets a lot of credit for creating value. what he did at citi and taking that and going from bank one and being hired at jpmorgan, he traded a lot of value, he brought a lot of value. it will be interesting if when he leaves, there is a jamie premium. lloyd has taken what they do and amped it up in terms of the risk taking out of the financial crisis, they made billions of dollars and killed everybody -- yet they didn't adapt themselves that ell. they didn't adapt themselves
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as well to the post crisis. jason: what happens next? this is about succession and in next chapter for each of these banks. there are people on the benches. how do you game this out? hugh: it is clear for goldman, and if it didn't go this way, that would be really interesting but david solomon rose up through the investment bank, is widely seen as the heir apparent, i would say one to two years when you name a ingle heir apparent. as the next guy. you don't want to keep them there too long. i would see one to two years. jamie has said five years. jason: jpmorgan is a little more public aided because of that. they named two co-presidents. yet if he hangs on for another five years, you point out it could be a different set of people competing for this job. hugh: there is a certain twisted logic to it.
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you have paired copresidents, they are the hit by the bus folks. if something happens to jamie, you have obvious successors. s you build up your bench, you have a pair of women named mary, and another gentleman, they all lead businesses or our chief financial officer -- if you see them being groomed and put into other areas where they get diverse experience, you will see these are people who can really start thinking about being the next ceo. jason: the design director turned david solomon and lloyd blankfein into cover photos. >> we have a story about the heir apparent at goldman, but succession is not a super visual thing, but once we looked at the photo, it was emarkable. >> it says so much. i was involved in some of the
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stories underlying this and we did talk a lot about this idea that the new boss looks a lot like the old boss and captured it so well there. >> this is one of those covers where it is a really simple idea but we took a lot of time making sure we had the words and placement to make the joke work. really fast and get the idea across. carol: the other story is that a woman wasn't considered. just to remind you it is the same old same old in terms of executive leadership on wall street. >> this is one of those images that gets it every aspect of the story in a nice way without having to say all those words. we don't have to talk about the diversity thing in words, but you see it in image. carol: still ahead, a look at wall street's struggle to promote female leaders. jason: and trump moves closer to a presidency of one. carol: republicans and democrats get a political wake-up call from pennsylvania. jason: this is "bloomberg businessweek." ♪
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♪ carol: welcome back to "bloomberg businessweek." i'm carol massar. jason: and i am jason kelly. you can find us online at businessweek.com. carol: and our mobile app. this week, president trump fired rex tillerson from the state department. jason: and lost one of the last moderating voices in his administration. carol: we spoke to editor matthew philips about what it means to be surrounded by loyalists. matthew: the ax had been looming over rex tillerson for months. they disagreed fundamentally n a lot of things on foreign policy and tillerson had just gotten back from his first trip to africa as secretary of state. it was one of his more difficult trips. he had just had a member of his family pass, got sick there, gets woken up in the middle of the night by the president calling him and saying i am going to do this sit down with the north koreans.
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tillerson spends the next few days without sleep, calling all around the world, telling people the president is going to do this and this is the reason you brought a guy like rex tillerson into the white house. he is adept at sitting down next to dictators and getting concessions out of them. jason: and made quite a good living out of doing that as the ceo of exxon mobil. matthew: if you wanted him for one thing, you would think it would be this. he was prepping to spend the next few months working with the white house preparing the president for this may sit down with kim jong-un and lo and behold, he found out on twitter like the rest of the world that he no longer had a job. jason: you mentioned there was a difference in substance. there is also a seeming difference in style between these two guys even though back in the day, trump did seem to like his look, right? he cast him as the secretary of state, but it didn't go the way people thought. matthew: central casting has
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rex tillerson as the look of globetrotting energy ceo. when rex goes in -- he was taken by rex's broad shouldered experience running exxon in the past decade. as you say, they differed from there on almost everything. any attempt to have a relationship between these two guys fell by the wayside and rex was a methodical take-it-slow process guy and the president is anything but. carol: it is a reminder of a trend we have seen within the white house and that is that people who disagree with the president, even though he says he likes different opinions, people who disagree are leaving the white house. we had rex tillerson, gary cohn who disagreed about the tariffs and pushing back on globalization. what is going on within the trump white house? matthew: that is the point of the piece in axiom. we are approaching the
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presidency that donald trump probably wanted in his heart of hearts, which was a presidency of one. he attempted to surround him with outside professionals who are moderating influences, who could not only guide an experienced commander, but temper his impulses. people like gary cohn, people like rex tillerson. he has thrown that off, says i am going to be trump and we are closer to the way he ran his business, which was at his desk on the phone, surrounded by a handful of people taking orders. jason: yet, there are fewer loyalists there, too. the departure of hope hicks, rob porter -- the circle is really dwindling in a lot of ways. what are the implications of that? matthew: isolation. ideologically, physically -- i mean, this is an unprecedented situation in a lot of ways, but you've got to wonder how
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much of this is what he prefers. jason: in politics, democrats scored a big victory in trump country this week. carol: we talked to peter about the special election in pennsylvania. peter: conor lamb is a former marine captain, ex-federal prosecutor ran first-time candidate as a democrat in a district of southwestern pennsylvania that has been heavily republican. so republican that democrats didn't even bother fielding a candidate in 2014 and 2016. ran amazingly strongly, as have other democrats in the senate in virginia and alabama. to the point where he might have won, might have come close to winning, we were not sure as we were taping this but whatever the case, it is a big wake-up call for the republican party. what i am saying and has not
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gotten as much attention is this is going to be a challenge for the democrats too. it is looking now like democrats will take the house back in november and if they do, they will have quite a range of members in the democratic caucus. all the way from blue dog democrats like conor lamb, to real liberals -- people to the left of bernie sanders and elizabeth warren, who are on a warpath against donald trump. carol: when we also talk about european politics, we see coalition building in various countries. what would that mean in the house in terms of how effective it might be in getting policies done? if there is such a range? peter: we can look at the problems bedeviling paul ryan right now in the house because he has that same problem. you have some republicans who
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are just out there, the freedom caucus, folks like that. no compromise, and then you have others who are trying to do business. ryan is having trouble getting stuff done. imagine that in the house, the same thing happening with the next speaker, whether nancy pelosi or someone else. jason: that has stalled. it made obamacare's repeal essentially impossible. even issues the president wanted to get done, he ran into resistance from various sections of his own party. peter: i talked to one consultant in alabama who has worked in the field for a long time and was around back in 2006 when the democrats came to power, midterm elections, and nancy pelosi was elected speaker of the house. his point was look, you'd
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rather be in power than not. she did a pretty good job of managing those blue dogs, understanding that they weren't going to win unless they hewed to the needs and desires of the people back in their districts. she gave them a little slack and i think that is crucial for whether it is she or hoever takes the speakership next year, that person will have to think that way. carol: next, where wages are increasing the most in the united states. jason: and how companies from iowa to maine are dealing with a massive labor squeeze. carol: this is "bloomberg businessweek." ♪
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jason: welcome back to "bloomberg businessweek." i'm jason kelly. carol: i'm carol massar. you can listen to us on radio on sirius xm channel 119, and
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in new york, boston, washington, d.c., and in the bay area. jason: and in london on dab mux three and in asia on the bloomberg radio plus app. this week, the entire economic section is devoted to three places in the u.s. where the economy is humming. arol: we talked to gina about these three cities. jeanna: what we wanted to do is take a look at three places where we have reached full employment. where anyone who could potentially want a job has one. look at what happens when you run a labor market hot like that. the rationale behind it is the federal reserve is staring down a situation where in the next year, they expect to be under 4% unemployment. we wanted to know what happens, what does that look like in america. that was the goal. jason: how did you pick the places where you ended up going?
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jeanna: ames, iowa has the lowest unemployment in the country, so it was obvious. portland, maine had low unemployment and is an interesting story because it has a rapidly aging population. maine has the oldest median age in the country. we thought that added an interesting element to the mix. marietta, georgia is one of the only places in the country that is seeing a pickup in inflation at a time of low unemployment. we wanted to see if the phillips curve is playing out there. jason: let's start in iowa. it is not a place a lot of folks spend a lot of time and you frame ames really nicely in terms of why people should care. jeanna: is the home of iowa state university and that is the major employer there. it has this interesting dynamic, because you have a thick labor market at the entry level.
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you have a lot of people exiting school, potential workers. you have employers who are crowding into this place trying to catch people as soon as they exit the door. you can also feel the competition for these workers and that the same time, it is a tight labor market everywhere else. all the services that support university are having trouble hiring people. that was interesting. carol: what are they doing? your labor pool is so big, what are they doing to train unskilled workers, bring in more to the labor pool? jeanna: what really surprised me about ames is it did not confirm any of my priors. i expected to meet a ton of employers hiking wages left and right trying to attract talent. what i found was a bunch of inventive to attract talent, not necessarily raising wages. there were anecdotal reports of wage raises, but a lot of what i heard was working on a more flexible schedule, and if its network, ping-pong table
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is in the office, or working on doing something to pull people who wouldn't have been previously qualified into the field. the chamber of commerce there is pushing this program that trains people for advanced manufacturing jobs and they are advertising for it at food banks and shelters, which i thought was an interesting phenomenon. jason: youth driving the story in iowa, then you went to portland, maine. not as young. you visited a chocolate store, tell us about that. jeanna: portland was an interesting case for me. i started at a chocolate store in freeport, part of the statistical area. i found this guy who is sitting at this nexus of the retail shift in the fact that retail is changing to online, and also a manufacturer. he is also dealing with the fact that he is struggling to find manufacturing. his name is andy wilbur and he is the proprietor of the hocolate shop.
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he took it over from his parents. he had to face down tough decisions. this man loves chocolate, you can tell when you talk to him. he takes a lot of pride in how handmade all of his chocolates are, but is having to make choices about switching to automation because he can't find workers for his factory. carol: but he has raised wages? jeanna: 20% over the past three years, which is dramatic and something you might expect to see in this tight of a labor market. but he doesn't have pricing power so he can't pass that on to customers. if he did, he would lose out online and his wholesale business, which is driving his growth. jason: and you dispatched margaret to marietta, just outside atlanta. a different scene there, attached to a major u.s. city, but facing inflation, you said. jeanna: marrieta is one of the
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most interesting cases to me because it is dealing with this combination of a low unemployment rate in marrieta itself and also feeling it in atlanta because atlanta is really booming. that combination is driving up wages and inflation. it is one of the only places in the country that we are seeing this tight labor market eally spill over and cause a dramatic run-up in prices. carol: why some of japan's elderly women see prison as a safe haven. jason: and the global ambitions of india's controversial yogi turned tycoon. dramatic run-up in prices. carol: this is this is "bloomberg businessweek." ♪ retail.
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jason: i'm jason kelly. carol: i'm carol massar. globalism versus nationalism, make your call. jason: spending your golden years in a japanese prison. carol: and the yoga guru in charge of a corporation. jason: all of that is coming up on "bloomberg businessweek." ♪ ♪ carol: we're back with the editor-in-chief of bloomberg businessweek, joel weber. remarks this week looks at globalization. with so many nationalist politicians pushing back on
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globalization, but there is a lot of good that gets done as a result of it. joel: we wanted to think about how overall themes are merging now and a lot of the trump policies that have emerged of late, especially with the resignation of gary cohn, have centered around this idea of nationalistic policies. keep in mind, the global economy has been global for a while. free trade sentiment is part of the reason the world is a more affluent place now. jason: and part of what you address in this story is globalization gets knocked down, but it gets up again. remember "tubthumping?" joel: it has almost felt resilient, and we see that in europe and in asia, and we have even seen it in the u.s. a little and that is why these tariffs have had these carveouts because it is not quite as easy as it seems to pull this off.
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carol: globalization means you are going to a low cost producer that helps in a developing economy and helps them become consumers, which benefits the whole world. joel: reversing globalization helps the few, but hurts the many. that is the overarching tension we are seeing between the global sentiment and the nationalistic fervor. carol: let's talk about another future story. this is one of my favorites, that is the photo essay. it looks at the elderly in japan. we know in terms of demographics, the japanese have an aging population, but tell us what is happening. joel: it is the oldest population in the world. the elderly population is twice as much as in the u.s., and when we specifically looked at women as this photo essay does, which is just remarkable, some of these stories -- in japan, they are ending up in prison.
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there is an elderly crime wave because the women are so isolated that they can't take care of themselves and are shoplifting. what is happening is, if you look at the number of women in prison, one of five are seniors. nine out of 10 of them are in jail for shoplifting. they are shoplifting, getting arrested and going to prison so someone else can care for them. carol: there is a phrase in the story talking about them being economically vulnerable. you used to have generations taking care of older generations, you used to see that in japan. you do not see that as much anymore. joel: and you lost it. one of the nuances that come out of this is that the guards are becoming caretakers. carol: at the prison. joel: the prison guards are becoming caretakers and you're seeing this attrition because people didn't sign up to be caretakers. it is a nuanced story about demographics.
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jason: another fascinating feature this week, a global issue, takes place in india. there is a guru there who is a tycoon. joel: he happens to be, this is a multibillion dollar company and some analysts have said he can take on nestle and unilever within india and they are using all products and ingredients that are popular within india. he is technically worth zero dollars, which i think is the most fascinating part about this. carol: a pledge to poverty, but -- joel: he is a tycoon and a yogi on top of it. that is why he has such a cult following. this story has so many fascinating nuances. carol: a lot of contradictions in his life. we got more from editor jeremy keane.
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jeremy: when he was younger, he renounced material wealth and came to prominence as a yoga instructor in india when yoga was becoming popular around the world. via tv he was a tv host. from there, he built a company that began doing products and medicine. toothpastes have close in them, that kind of thing. now he is the brand ambassador for $1.6 billion company. carol: so he takes an oath to poverty and built his company, selling products, on tv, it is a big company. tell me how you make sense of that?
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>> you have good partners. he had a schoolmate who is currently the ceo or managing director of the company. he is the 19th richest person in india. a net worth in the neighborhood of $6 billion. baba ramdev remains the ambassador at arms length. at key points, they are hired other smart people. another fellow who was ceo for three years and took the company from 50 products to more than 500. carol: this is a huge company in india and significant to a lot of folks who live there. jeremy: his products are everywhere, it is the largest growing consumer goods company of the country. it competes with big names, nestle, unilever, they have had
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to adjust their models to some degree to compete. jason: and you have a larger-than-life personality who has a mysterious past and present to a large extent. he is omnipresent and yet elusive at the same time. jeremy: the reporter was a -- expresses surprise that he sent a few emails and was suddenly invited to the holy city where the company was based, hopped a train and went to what sounds like a well appointed estate. even though baba ramdev's net worth is zero, he seems to live comfortably and says as much. there is no set of codified rules for him that says you can't live well.
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although most you see if you go down to the ganges, they have taken a vow of poverty, live off of alms, and this fellow has taken another path. jason: he is not begging. joel: no, and he says this is part of his mission as a yogi. he wants people in india to be healthier, spiritually well, and he sees the company as a vehicle for doing that. carol: next, will a woman ever get a shot at the top at goldman sachs? jason: and the rise of the gif economy. carol: this is "bloomberg businessweek." ♪
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jason: welcome back to "bloomberg businessweek." i'm jason kelly. carol: i'm carol massar. you can find us online at businessweek.com. jason: and on our mobile app.
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let's get to the finance section where we go into the succession planning at goldman sachs. carol: those plans didn't include a woman. >> we haven't seen a woman in charge of a major bank on wall street. this week, when goldman sachs made david solomon the sole president, he is the front runner to become the next ceo. it means it would continue the pattern of men running wall street banks. but solomon says the bank needs to do better at promoting women to the top ranks so one day, we will see a ceo. carol: sounds like a lot of lip service. >> we have been hearing it for years. we know the economy does better when women are in charge. but the banks ceos all say that
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not only are they still run by all men, but the people below the leaders are still also all men. jpmorgan has a couple of candidates who are a little promising. carol: mary erdos and a few others. let's be fair, we are talking about goldman because their succession plans were laid out this week. they are front and center but you are right, it is all the firms. we don't see a lot of women in prominent positions. >> when we look at other firms, a lot of them have under 25% of women on their executive teams. that is not too many women. you need more women and not just a token to be in position to be selected as ceo. carol: why is it happening still? especially when you talk about goldman 10 years ago with blankfein saying this is important. why are we still having this conversation? is it because it is a boys club?
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jason: listen, we talked to an executive coach, that is literally the phrase he used. he is an executive coach who specializes in wall street and goldman sachs was one of his main clients. he says it is a boys club and our reporting over the last year has shown there is a ways in which wall street is not getting better at certain kinds of diversity -- for example, black bankers. in some cases, getting worse. we talked about the fact that black bankers are disappearing from wall street, so something isn't working and it is a fair enough hypothesis to put forward that in 2018, there is something about powerful white men, where they are still not comfortable with the idea that they will be succeeded by women and people of color. >> you can have women coming into your pipeline at the entry level position, but a lot of people say if i don't look up and see someone in a role that is powerful, revenue making, that could lead to ceo, you get
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discouraged. you leave and the people you start out with, the men that get promoted over you, that is discouraging and you might go to another career. carol: in the technology section, a profile of tenors. jason: this is a .gif search engine. carol: it is attracting a huge audience, bigger than twitter. here is editor jeff muska's. >> it has been running about four years and builds itself on the backs of people's desires to put .gifs in messages to one another or tweets or anything else. carol: take a step back, because we know what they are. it is a video file. >> short video chips, graphic interchange format. it goes back to the early days of the web. in the past 10 years, people have the bandwidth to see video all the time and they be have become a bigger deal.
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jason: people will text them to each other, drop them in in email and it is usually a silly face or someone falling down, but it has gone commercial. they have taken a commercial direction. >> advertisers now see .gifs as one of the key ways they are trying to get their brand messages into people's messages to one another. the sales pitch, as they try to become more commercial -- it has mostly sustained itself on venture funding -- .gif's can act as a way for people to share ads. jason: where did this company come from? >> it is basically the brainchild of a couple of guys who were either short form video search engine creators -- the other guy sold a company -- a giant video game company, and they got their start after
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creating branded .gif's for the premiere of "taken 3," the liam neeson revenge vehicle. they have attracted interest from the likes of dunkin' donuts, nestle, kfc -- now they have about a dozen brands paying them anywhere from $100,000 to $500,000 a pop to put premade .gif's next to search results. carol: they have created an ad network. give us an example. >> on valentine's day, dunkin' donuts paid tenor to put a valentine shape desert with meme language "donuts before dudes" next to .gif's searching love. carol: every file in tenor, is it being paid for by a company? >> know, so far it is the occasional ad. they have a dozen corporate
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clients so far and the service has only been in place for about a few months. the hope is they will expand the ranks of branded .gif's and add them to the messaging service called .gif keyboard that as of this week is rolling out on every new samsung smartphone. jason: how much intellectual property concern is there around .gif's in terms of who owns it and all of those issues? how much of the market do they have cornered, i guess? >> the section 230 question hasn't been litigated in this area. for the moment, while tenor isn't the early leader in terms of .gif market share -- giphy is the biggest.
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tenor is the only one trying to commercialize itself with established brands. carol: how amazon became corporate's nightmare. this is "bloomberg businessweek." ♪
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carol: welcome back to "bloomberg businessweek." i'm carol massar. jason: i'm jason kelly. you can listen to us on the radio and in new york, boston, 91 fm in washington, d.c. and in the bay area. carol: and in london and asia. this week, a profile of amazon's growth spurt the last five years. jason: and how the rest of corporate america is struggling to keep up.
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>> we still have to explain how amazon got to the point where it is today, where it is the muscular unusual company that literally every other company in corporate america is afraid of and has to have an amazon strategy at this point. jason: you pointed out in this that on conference calls, it is the most talked about company, more so than trump or taxes, or maybe second only to taxes? >> we have a function in the terminal that allows you to see keywords that come up in conference calls and other areas like that. if you do the analysis of companies in the s&p 500, they mentioned amazon more often in the last year than they mentioned donald trump. not as often as they mentioned taxes, but you can see -- it goes to show how often companies get asked about amazon in almost any industry you can think of. carol: it has become a verb like
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google or xerox. >> we talk about that in the piece. google and xerox are verbs because of their products. amazon is because of what it does to other companies. carol: take us back. i feel like a day doesn't go by without us talking about amazon. tell us how sprawling they are. shira: the scope of amazon is uncommon. business school case studies are about focus, companies drilling down into one, maybe two areas they do well, but amazon has a dominant e-commerce operation. it has an extremely successful cloud computing business where it rents computing horsepower and other services to companies large and small, including the u.s. government. it has a video service, it
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delivers items in one to two hours, it owns the whole foods grocery store chain, it announced this health care joint venture with berkshire hathaway and j.p. morgan. its fingers are in many pots. jason: what makes it so? jeff bezos is arguably one of the most fascinating figures in business, in media, potentially in politics in an indirect way. is this bezos materialized? what is the connection? shira: part of it is that amazon for the last 15 years has broken all of the rules of modern corporate america and gotten away with it, and part of it may be that bezos has this long-term vision of the company. he articulated that literally from the first moment the company went public in 1995, and
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it was always about -- look, don't think isn't it kind of weird that amazon is buying a grocery store chain? trust us, we have a long-term vision for the company and investors for the most part have trusted jeff bezos. jason: more amazon. we look up the ketchup flying off the shells at whole foods. carol: we talked about sir kensington's. >> it took the world by storm in 2010, but the real birth of it was in 2008 at brown university in a campus apartment. these two econ majors read this gladwell story about how heinz dominated the category and they were foodies, but let's give this a try. they started making ketchup in their kitchen and came across this all-natural, not too sweet version and they started packaging it and two years
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later, they were able to sell 40,000 jars. jason: such an interesting example of capturing a moment in the zeitgeist. in >> precisely, ketchup is a comfort food staple and if you are a college kid you think about it in terms of burgers and fries, but they looked at the bigger picture and saw an opportunity that happened to coincide with america's culinary obsession or renaissance, where people wanted to upgrade every aspect of their pantry and foods. jason: and are willing to spend money on it. they are not price-sensitive and quite the opposite, are willing to pay a premium. kate: it is a badge of honor if you are going to spend eight dollars on a bottle of ketchup that looks really cool, iconic, black-and-white logo. you get to say here is my ketchup. you can brag about it. carol: we talk about the disruption of so many industries, wall street, the
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financial sector are, but food is being disrupted too. they are this week's game changers. kate: that's right, these are dusty isles of the grocery store that have been unchanged for decades, basically. these two guys came in and it is basically the middle of the grocery store that is unchanged, so they walked down those aisles and see what looks the same. jason: they are picking off new subcategories, looks like. kate: they see the potato chip category, there are dozens of choices. salsa, you can have a different line every day. but ketchup was not changing and now they have a new product that has one dominating brand and they are getting into the ranch dressing game. carol: because hidden valley kinds of owns it. kate: totally, and the dressing category is a $2 billion industry and of that, ranch dressing takes up 36%.
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the next closest one is italian dressing, broadly defined, and that is a 17%. of the ranch dressing category, hidden valley is 51%. carol: "bloomberg businessweek" is available online and on the app. jason: favorite story? carol: i liked the photo essay on elderly women in japan. the aging demographic story is not new, but many women in japan are shoplifting and ending up in prison and are happy to be there. i found it a striking story. jason: also in the way it was presented. the images are powerful and capture it in a way words don't. speaking of powerful images, the two bald guys on the cover got me. if presented a fascinating package about succession on wall street. not just that goldman sachs, but jpmorgan and all across. carol: more bloomberg television
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starts right now. ♪
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♪ nejra: regulation rollback -- the u.s. senate passes legislation that would ease constraints on regional and community banks, but will the house go even further in slashing dodd-frank rules? going dark -- mifid ii has been implemented, but how much disruption will we see? and the future of the banking union. what there is to say about europe's future and further integration. welcome to "bloomberg markets: rules and returns." i am nejra cehic in london. rules and returns goes into the regulatory challend

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