Finance Matters

Archive for February 6th, 2010

Google’s Super Bowl commercial will be a brand ad for its search engine, John Battelle reports, not an ad for its Nexus One smartphone, as we had previously suspected. (Which, we’d still argue, makes much more sense.)

This commercial is called “Parisian Love” and shows a person’s search queries while romantic piano music plays in the background.

Google CEO Eric Schmidt all but confirmed the company would be advertising during the Super Bowl in a tweet earlier this afternoon. “Can’t wait to watch the Superbowl tomorrow,” he said. “Be sure to watch the ads in the 3rd quarter (someone said “Hell has indeed frozen over.”)”

Here’s Battelle:

Well I’ve got a pretty reliable source who is telling me Google plans to hit the branded advertising big leagues this Sunday – the source says Google’s “Parisian Love” ad (below) will air during the third quarter of the Super Bowl.

Now that would be a true turning point for the brand – a brand that, for nearly ten years, dismissed brand advertising as a waste of money (“The last bastion of unaccountable spending in corporate America,” in Eric Schmidt’s words back in 2006), and built its entire fortune on turning the advertising model upside down.

…

I can’t find the ad in this lineup of SuperBowl advertisers, but I’d not be surprised if Google had asked CBS to keep their name out of the pre-game hype (my source was told Google was keeping this quiet). File this as a strong rumor for now, as I can’t get a secondary confirmation – though Google’s response was pretty telling.

Don’t miss: The 10 Best Tech Super Bowl Ads Ever

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See Also:

• Google To Air Nexus One Ad During Super Bowl? Or Search Ad?
• No, No, THIS Is The Greatest Super Bowl Ad Of All Time
• The 10 Best Tech Super Bowl Ads Ever

Update: John Battelle says it’s going to be a brand ad for Google’s search engine. (Embedded below.) Weak! Everyone knows Google has a search engine. Not everyone knows Google sells smartphones.

Earlier: It appears that Google will be airing an ad during Sunday’s NFL Super Bowl. Will it be for the Nexus One smartphone that Google is trying to sell online?

Earlier this afternoon, Google CEO Eric Schmidt sent out a tweet suggesting that Google will have something to say during the Super Bowl.

“Can’t wait to watch the Superbowl tomorrow,” he said. “Be sure to watch the ads in the 3rd quarter (someone said “Hell has indeed frozen over.”)”

The most logical product for Google to advertise during the Super Bowl is the Nexus One, whose sales have gotten off to a slow start. Assuming first-month sales estimates of 80,000 are even remotely accurate, that is a very poor showing from Google.

In the long run, Google’s cellphone business isn’t specifically about getting people to buy the Nexus One, but rather just about getting people to buy smartphones directly from Google, disrupting the carrier-dominated retail market.

But Google has only advertised the Nexus One online so far. So most people probably still have no idea it exists, or that Google even sells cellphones in the first place.

A Super Bowl ad could change that immediately. Recall the awareness that Hulu’s ad created last year, which drove traffic up permanently.

What if it’s not a Nexus One ad?

It could be for Google’s search engine, to counter Microsoft’s Bing ads, as TechCrunch’s MG Siegler poses. But we think that’s less likely: Google hasn’t lost any market share to Bing, and it certainly doesn’t need to remind people that Google search exists. (Or YouTube, Gmail, etc.)

Don’t miss: The 10 Best Tech Super Bowl Ads Ever

Here’s the ad John Battelle says will be running during the game:  

Join the conversation about this story »

See Also:

• No, No, THIS Is The Greatest Super Bowl Ad Of All Time
• The 10 Best Tech Super Bowl Ads Ever
• Google Swarms Super Bowl Advertisers For YouTube Ad Dollars

All Things D’s Walt Mossberg, the New York Times’s David Carr, and TechCrunch’s Michael Arrington went on Charlie Rose and talked about the Apple (AAPL) iPad.

It’s a lot of gushing, with a little whining about AT&T and Flash.

Watch:

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See Also:

• Apple Secretly Working On A Second, Less Disappointing Tablet–More Like A Mac Than An iPhone–Says TechCrunch
• NY Startup ScrollMotion Plans To Build Textbooks For The iPad
• Steve Jobs’s iPad Keynote In Just Three Minutes

Some great, clear thoughts from Rolfe Winkler on the matter of Europe’s Greek (and Spanish) problem.

As he puts it, there are only three scenarios, two of which are awful, and one is nuclear:

1) The PIIGS cut their budgets to pay back debt. Such austerity programs are typically very difficult to get done in democracies. Deficit spending stays high long past the point that it’s possible to work off debt over any reasonable period. To successfully dig out of the hole requires cuts so deep, voters never agree to them.

2) Europe bails them out, which is the easiest solution in the short-run. Richer European countries certainly have the wherewithal to bail out a small country like Greece or Portugal. But it’s a dangerous precedent to set. What about Spain? It’s 14% of the Euro economy compared to 6% for Portugal/Ireland/Greece combined. If economies keep spending with an eye towards a bailout from the ECB, eventually you get #3.

3) The monetary union breaks apart. The customary way out of a debt crisis is to devalue one’s currency, see Argentina in 2001. It couldn’t maintain it’s dollar peg and still service its debt, so it devalued its currency and defaulted on debt. But this locked the country out of the international capital markets and drove them into a deep, though brief, Depression. For Greece to devalue, it would have to pull out of the Euro, pass a law that it’s debts are payable in new local currency and then devalue.

Please, if you think there’s another scenario, put them in the comments.

Read more of Rolfe’s thoughts here >

And don’t miss: 15 countries on the verge of a sovereign debt collapse >

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See Also:

• Niall Ferguson: The Next Greece? It’s The US!
• 7 US States That Are Worse Off Than Greece, Portgal, Ireland, And Spain
• Goldman: If Greece Is Handled Wrong, All Of Southern Europe Will Fall Like Dominos And 30% Of Euro GDP Would Be At Risk

(This guest post originally appeared at the author’s blog)

In last week’s Barron’s, I read the following quote from a fairly prominent hedge fund manager:

*Redacted* “favors emerging stock markets, Brazil and Turkey in particular, over developed markets, but he is bearish on China, citing what he views as ‘extraordinary economic imbalances and the mismanagement of its economy’.”

Let me help you out with that notion, homeboy… Liking Brazil while disliking China is like favoring the Indianapolis Colts in the Super Bowl but betting that Peyton Manning will have a bad game.

I’m hearing this “Brazil is great but watch out for China” thing a lot lately.  It just doesn’t work that way.

China and Brazil are quite possibly the most symbiotic investment story going right now.

It’s completely understandable if you don’t like what’s happening in China, including the crane-filled skylines, the widening gap between those who can and cannot afford city real estate, the ghost cities and the infrastructure being built just for the sake of building.  But if you are a disbeliever in the Chinese boom or its ability to continue, how could you possibly want to invest in an economy like Brazil that is completely beholden to China’s appetite for building materials, finished goods and food?

Brazil’s burgeoning middle class and the rise of their own internal consumer culture are highly appealing to investors, especially when you look at the progress they’ve made in beating back inflation.  But don’t for a minute think that the Brazilian consumer isn’t flourishing as a result of the world’s insatiable appetite for the country’s mineral and agricultural wealth.

Companies like Vale (VALE) and Petrobras (PBR) have been coining money by selling to the Chinese Dragon and that same money is precisely what has trickled into the Brazilian population’s purse.

China displaced the US as Brazil’s number one trading partner in 2008; the annual trade balance between the two nations has grown exponentially over the last decade and is now in the range of $36 billion.  In May of 2009, they also signed a $10 billion oil agreement.

Many of China’s steel plants have been running in overdrive since before the 2008 Summer Games.  What made this possible was the metallurgical coal they imported in huge quantities from Brazil (400 million tons last year).  This is in addition to the Brazilian metals and petroleum products shipped to China to facilitate the building of several metropolises and the highways to connect them.  And then there is the agricultural export business, in some ways even more crucial for Brazil, which includes the shipping of soybeans and cellulose products.

The revenues from this relationship have been extremely beneficial to the 90 million or so Brazilians who are now considered middle class (aka Class C).  They buy cell phones, visit dentists and decorate their homes with the dividends from the export business.

And as the US and Japanese economies have retreated over the last two years, Brazil has specifically targeted China as a market to sell into and has become increasingly reliant on it.

What my friend the hedge fund manager doesn’t seem able to connect is the fact that should China’s internal issues cause a blow-up or a slowdown of any consequence, Brazil’s export industry will be perhaps the hardest hit, followed soon after by its consumer class.

And frankly, in the absence of Chinese demand, who could possibly pick up the slack for Brazil’s export industry to keep chugging along?  The US?  LOL.  Europe?  Yeah, ok.

The codependent relationship between China and Brazil is as fundamental as that of the shark and the remora fish.  Any investor who believes otherwise is bound to be heartbroken.

As Old Blue Eyes sang: “This I tell ya brother – ya can’t have one without the … other!”

Read more market commentary at The Reformed Broker >

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See Also:

• The 10 States About To Get Murdered By The Coming Chinese Import Slowdown
• With New Muscle, Blackrock Is Betting Big On Brazil
• Geithner: We’re All Good Because China Will Save Us And Let The Yuan Strengthen