Talking Point by Emma Barnett – Daily Telegraph
Facebook’s much talked about $1bn purchase of photo-sharing app Instagram marks the start of a new chapter for the social network as an umbrella company.
Mark Zuckerberg, Facebook’s 28-year old founder and chief, has found himself in a rare and enviable position. Now that his social network has been valued at $100bn, he can comfortably afford to wipe out any of its competitors with large purchase prices and lots of change to spare.
Instagram, with its 30 million users, the majority of which are young, (compared to Facebook’s ageing membership as its popularity grows amongst parents and grandparents) has been scooped up by Facebook for a mere one per cent of its market cap.
The move heralds a new era for the social network. Zuckerberg has personally pledged to not only keep the photo-sharing app open; he has said it will continue to work with other rival social networks, such as Twitter and location-sharing service Foursquare.
Using his own Facebook profile to announce the deal, which is the first of its size for the social network, Zuckerberg stressed that it would be business as usual for Instagram’s 30 million users: “We need to be mindful about keeping and building on Instagram’s strengths and features rather than just trying to integrate everything into Facebook.
“We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook.”
Until now, the cash rich Facebook, has shut down any acquisition it has made and folded them into social network’s product. Gowalla, a location-sharing app was duly closed after purchase this year; as was Snaptu, a social network mobile application.
However, by committing to keep Instagram alive and building on its success, Facebook has overnight become an umbrella company – owning and running more than one brand for the first time.
Like Google and Microsoft before it, Facebook has started to purchase companies which can grow its reach, appeal and crucially, its monopoly of the social web.
Google buying YouTube for $1.65bn in 2005 was a no brainer for the company wanting to own every part of search – despite the video-sharing service having cost the search giant hundreds of thousands of dollars every year since.
Facebook has been on a journey for the last few years to become a platform – upon which all social interactions of the web take place.
It has, until now, aped any of its competitors’ raison d’etre rather than buying them up. When Twitter took off, suddenly Facebook’s news feed started to resemble the microblogging platform. When Foursquare’s popularity grew, suddenly you could share your location with your Facebook friends – via a new check-in button on the Facebook mobile app.
Facebook’s purchase of Instagram, which has yet to turn a profit, has correctly prompted much talk about the inflation of the new technology bubble. However, that conversation aside, which concerns investors more than the regular social network user, it has begun its journey towards becoming a portfolio company, which will start owning and operating any competitor social website or app which can enhance Facebook and help it fulfil its mission: to make the world a more social place.
MORNING BRIEFING – By Benedict Brogan (Daily Telegraph)
DAVE’S ASIAN TOUR CONTINUES
David Cameron flew from Indonesia to Malaysia earlier this morning, but not before giving a speech in Jakarta hailing the “extraordinary journey” undertaken by Indonesia towards democracy. Our report, from Rowena Mason, who is on the ground with the PM, is here.
Cameron said Indonesia were proof that “democracy and Islam can flourish alongside each other.” The Guardian says it marks “one of his most significant speeches on Islam.” But the PM made one awkward mistake – accidentally referring to Indonesia as India.
As Nick Watt reminds us, Dave is actually the first PM in Malaysia since John Major in 1993. The purpose of the trip is to revive ties with an old but neglected friend.
Team Cameron is carrying posters to promote Britain – the Sun’s Emily Ashton points out that this one looks a lot like Ed Miliband.
Tomorrow Dave will be in Burma, greeting – the real photo opportunity of this trip – opposition leader Aung San Suu Kyi. Remember, his defence contractor friends will be in attendance only as tourists .
MAKING A DONATION
The PM may be enjoying playing the statesman in Asia, but back in Britain, the focus is still on his policies – in particular, his proposal to limit tax relief on charitable donations.
As we report, speaking yesterday, the PM said that: “George Osborne said in the budget very carefully we would look at the effect on charitable donations because we want to encourage charitable giving… We’ll look very sympathetically at these concerns”
The makings of a U-turn are now in place. Dave is sympathetic, it’s about draft legislation due later this year – so plenty of time to tweak it – and there’s evident support for limiting the cap to donations to foreign charities, though even that sounds dodgy: why should the UK taxpayer underwrite support for charitable works abroad (what’s that you say Andrew Mitchell?)
In our leader, we welcome that: “Even from a distance of 8,000 miles, it must be apparent to David Cameron that the Government made a mistake in the Budget by capping tax relief on charitable giving”.
The Times (£) agrees with us: “the Government has made both a presentational mistake and a substantive one”, as does the Mail, which reckons that the blunder is George Osborne’s fault for heading to the US before the Budget. Only the Guardian strikes a different note : tax relief for the charitable donations is just a subsidy for the “rich to indulge their philanthropic activities.”
Then there’s Dave’s own tax affairs. After we predicted he would, David Cameron admitted yesterday that it is “increasingly likely” that he will publish his tax return, but he is “weighing up the pros and cons”, pointing out that it could deter good people from entering politics.
Nick Clegg meanwhile said that “the principle need to be a simple one – us politicians – as servants of the public – should make our own arrangements transparent”. But he ruled out his wife publishing hers (she earns lots more than Nick).
The FT’s (£) report on the topic is useful; they’ve been calling around friends of Cabinet members to work out what they think of the idea. As one says: “Transparency is, of course, a good thing, but unlimited transparency can produce perverse results”. Another said, reluctantly, that “if No 10 insists that is what we have to do, then so be it”.
PENSIONS TIME BOMB
We’ve splashed on the IMF’s warning that our ageing population could cost us as much as £750 billion. What happened to pensions reform? As I noted in my column yesterday tax seems only to be going up.
Nick Clegg’s big green energy speech yesterday went down about as well as you would expect: the Deputy Prime Minister is under fire in the Mail. He hailed the coming of new green policies before jumping into his ministerial Jag, which is apparently unacceptable.
He said: “There is a myth doing the rounds in political debate today that here in the UK environmentalism has hit a wall, that green is for the good times, that we cannot up our efforts to protect our environment while simultaneously growing our economy, that we have to make a choice.” Isn’t that “myth” being put about by George Osborne?
Our leader agrees with George: “It is time the Chancellor’s view prevailed.”
THE CRYING GAME
Back in London, the mayoral race is turning into a real drama – or at least, Ken Livingstone seems to think it is. Slightly bizarrely, the Labour candidate was spotted blubbing while watching his own mayoral party election broadcast, which featured a group of “real Londoners” explaining why they need Ken back in City hall.
Livingstone described his broadcast as a “tear jerker”, noting the “appalling responsibility” of becoming mayor. Ed Miliband, who was left comforting his candidate, said that Livingstone had “fought his way back into this race because of the powers of his ideas” . (Good of Ed to admit he was out of it).
But as Patrick Wintour notes in his analysis for the Guardian: “the impression could also linger of Livingstone lost in an act of vanity, crying at his own election material.” The latest poll, from ComRes in Tuesday’s Evening Standard, puts Ken on 47 per cent behind Boris on 53 per cent, once second preferences are counted.
You can watch the party election broadcast here, if you really want to. In it, Ken promises to resign if he is elected and he fails to deliver his promised 7 per cent fare cut by October of this year. Still no explanation of how he’ll pay for it…
Still, at least London has a mayor. The Times (£) has a fascinating report on how local councils are trying to scupper David Cameron’s plans to give other cities mayors too. In Bristol and Nottingham, which are both holding referendums this May, the councils have published leaflets attacking the plans.
As Jill Sherman reports: “Although David Cameron wants to devolve power from Whitehall many authorities fear that a directly elected leader will emasculate councillors’ influence.”
All the more reason for those cities to vote Yes on May 3, I’d have thought.
This is worth noting: the culture, media and sport select committee have warned Jeremy Hunt (via a leaked letter) that Heathrow will not be able to withstand the strain of the Olympics. The result, they reckon, could be that tourists will be deterred from returning to Britain – if they arrive at all.
John Whittingdale, the committee chairman, told the Culture Secretary that two members of his committee – Therese Coffey and Gerry Sutcliffe – had attended a briefing by Heathrow operator BAA and were not confident that: “Heathrow was ready to cope with the arrival of a huge number of competitors, Olympic family and visiting tourists in timely fashion”.
Which is all too believable. How is that plan for expanding airport capacity in the south east going then?
Latest YouGov/Sun poll: Conservatives 35%, Labour 41%, Liberal Democrats 8%
TWEETS AND TWITS
Ever since Pastygate Tory MPs have been trying to prove they are men of the people. Some are struggling more than others. Yesterday, Welsh minister tweeted:
“@David Jones: On platform waiting for Euston train. Cardiff train just pulled in. Amazing number of stops on the route.”
One step at a time, David.
In The Telegraph
Sue Cameron: The cities are taking power from Whitehall
Leader: A charitable retreat
Best of the rest
Zoe Williams in the Guardian: Cuts are a coalition catechism. When will the left challenge it?
Paddy Ashdown in the Times (£): Snoopers’ charter breaches the coalition deal
Steve Richards in the Independent: Bus fares and gas bills are once more deciding who we vote for
Mehdi Hasan in the Guardian: If you don’t want Boris, you have to vote for Ken
Today: David Cameron visits Malaysia.
Today: London Mayoral hustings for disabled people, Coin Street Neighbourhood Centre, Southbank, London
10.15am: UKIP leader Nigel Farage and UKIP Mayoral Candidate Lawrence Webb appear at the party’s local elections and mayoral campaign launch
12.00pm: Ed Miliband appears at the City Ground in Nottingham to open Nottingham Forest’s new “Champions’ Centre”, with former Nottingham Forest captain John McGovern
The Sunday Telegraph has established Mr Galloway has channelled his substantial media earnings through one service company and set up another such structure just seven weeks ago.
New details of Mr Galloway’s financial arrangements follow a dispute over a similar arrangement used by Ken Livingstone, Labour’s London mayoral candidate, who was found to have lowered his tax bill legally by receiving some payments though a personal company.
Mr Galloway, who has previously served as an MP for constituencies in Glasgow and London, was elected to represent Bradford West in a by-election 10 days ago.
Records filed at Companies House show that he is the sole director of Molucca Media Ltd, a company founded on Feb 17 this year. It is thought that it takes its name from a group of islands in Indonesia — the politician’s fourth wife, whom he married last weekend, is of Indonesian extraction.
Mr Galloway has used another company, Miranda Media Ltd, to receive his sizeable earnings as a journalist, author and public speaker for more than four years.
Easy Love-Your-Heart Walks to Take Now!
“Walking is man’s best medicine,” declared Hippocrates, the ancient Greek physician, and modern medicine agrees. A recent study at Massachusetts General Hospital, in Boston, found that exercising briskly for just 10 minutes (including walking at a pace that elevates your heart rate but allows you to carry on a conversation) delivers immediate benefits in burning calories and fat and maintaining healthy glucose levels.
The American Heart Association recommends you multiply that 10-minute walk by three and get 30 minutes of exercise at least five days a week. Ready to get started? Here are three easy 10-minute walking workouts you can do anywhere—at home, in the office or outdoors