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Tuesday, November 13, 2018



New Yorkers reacted to the news that Amazon was coming to town with roughly the same amount of enthusiasm that Tory MPs showed for Theresa May's Brexit deal.
  • It's not a Brexit-level fiasco: The politicians who negotiated the deal, for instance, didn't immediately resign in order to protest the deal they negotiated, a la Brexit secretary Dominic Raab.
  • Still, politicians immediately realized that their constituents did not consider this a win. What looks like a lovely new source of income tax to City Hall (25,000 workers making an average of $150,000 apiece) looks more like a source of inequality and gentrification to the people currently living in Long Island City, many of whom were looking forward to that land becoming affordable housing.
The similarity between Brexit and Amazon HQ is that voters are increasingly vocal in speaking out against systems that are seen to benefit the wealthy elite first and foremost.
Amazon vs. Google: On Dan Primack's Pro Rata podcast, New York Deputy Mayor Alicia Glen said that the city drove a hard bargain with Amazon, forcing the company to open up its new campus to all New Yorkers, rather than closing it off for employees only.
  • The fact that Amazon was reluctant to make that concession is a stark contrast to Google, which has quietly bought up more than 6 million square feet of non-campus New York real estate — enough to support some 20,000 highly paid workers.
  • Amazon likes flashy buildings; Google, by contrast, for all the space it owns in New York, is largely invisible.
  • Google has neither requested nor received any kind of tax-break sweeteners from New York. That means it's getting roughly $3 billion less than Amazon. (Surviving bad press in Toronto, it turns out, is much easier.)
The bottom line: Amazon has created a lot of ill will by setting city against city in a cruel and elaborate HQ2 game. That's not a great way to make friends in a world where mistrust of Big Tech is at record highs.
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3. Facebook's executive trainwreck
Photo Illustration: Sarah Grillo/Axios
Facebook had even worse press than Amazon this week, thanks mainly to a devastating New York Times article on Wednesday.
The focus of the story is the manner in which Facebook's top two executives — Mark Zuckerberg and Sheryl Sandberg — react to bad news. Rather than deal with it directly, they tend, in the words of the article's headline, to "delay, deny and deflect."
  • The conclusion: "Bent on growth, the pair ignored warning signs and then sought to conceal them from public view."
Facebook also hired Definers, an opposition-research specialist in Washington, in a move that ended up backfiring spectacularly. Zuckerberg now denies (implausibly) that either he or Sandberg had ever heard of Definers before the Times article appeared.
Facebook shares closed at $139.53 on Friday, down 36% from their high of $218.62 in July, less than 4 months ago. That's a loss of $228 billion in market capitalization and a sign that the market has lost faith in Facebook's executive leadership.
  • Zuckerberg's attempt on Thursday to mollify the market and the press was predictably unsuccessful.
  • I made the case in April that Zuckerberg is no longer the right person to lead Facebook. His product and engineering skills are prodigious yet also irrelevant, and by Zuckerberg's own admission, neither he nor Sandberg are fully aware of what's going on internally.
Facebook's board has neither the ability nor the inclination to fire Zuckerberg. But that doesn't mean he can't resign as CEO. At any point, he is free to hand the reins over to someone with a better intuitive understanding of why governments and users around the world are so upset at the company (hint: patent applications like this one don't help) and what needs to be done to fix the problem.
The bottom line: Facebook has lurched from crisis to crisis, and it has managed none of those crises well. It's now clear who bears the blame for that.

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