Facebook Will Start Showing Mid-Video Advertisements, Plus The Money Behind the Golden Globes

By 01.10.17

morning-brew-new
Enjoy your January 10th hand-crafted Brew!

QUOTE OF THE DAY

“Altaba” — RIP Yahoo. “Altaba” is what Yahoo will be renamed to once Verizon completes its deal to buy Yahoo’s core assets—aka its internet business that you think of when you hear “Yahoo” (you also probably think “failed former internet giant,” but that’s for another time). What’s left, of course, will be Yaho—ahem, Altaba’s hefty 15% stake in Alibaba and its Yahoo Japan business. Also of note: CEO Marissa Mayer will be stepping down from Altaba’s board once the deal closes. Crazy times.
Market Snapshot

  • U.S. markets closed lower yesterday, with the Dow pulling back further from 20,000. The Nasdaq managed to reach all-time highs as earnings season began
  • The British pound dropped sharply as traders ignored positive economic data in favor of geopolitical developments surrounding Brexit

Bringing It All Back Home

…2017 is shaping up to be a good year for the United States. Yesterday, three key companies made major moves that’ll help business boom in the land of Uncle Sam. Let’s break it down:

  • Fiat Chrysler (+1.44%) announced that it will shift production of some of its models from Mexico to the U.S. On top of that, it’s adding a welcome 2,000 jobs in Michigan and Ohio.
  • In the next five years, Toyota (-0.32%) plans to invest $10 billion in the U.S., including its new North American headquarters in Texas.
  • Alibaba (+0.88%) also got a piece of the American action, with executive chairman Jack Ma announcing plans to bring a whopping one million small businesses onboard Alibaba’s platform, enabling U.S. retailers to reach Chinese consumers.

After preaching about bringing jobs back to the U.S> for the majority of his campaign, the Donald naturally had to chime in. In his words, “it’s finally happening.” Knock on wood for us, please.

Oh Boy, More Ads

…Facebook (+1.21%) will start showing mid-video advertisements. That’s right, not between videos, but smack dab in the middle. After at least 20 seconds of viewing videos, you’ll soon see those pesky advertisements. The good news: we’re not talking about videos that your friends post when they were doing something stupid last weekend. Instead, Facebook is helping professional publishers (and itself) make some dough. Similar to the revenue split adopted by YouTube, creators of the videos will get a 55% cut from ad sales. And it’s not all bad for users. It seems that since videos with ads must be 90+ seconds and must be watched for at least 20 seconds, Facebook is calling on publishers to make content that keeps our attention. Prognosis? Your newsfeed might get more interesting—and you’ll definitely start seeing more ads.

Mars Makes a Bold Play

…In pet land. Talk about strategy. Mars Inc. announced a $7.7 billion acquisition of VCA on Monday, sending the animal hospital and healthcare chain’s shares soaring nearly 30%. Most of us know Mars as the maker of legendary candy like M&M’s, Snickers, Skittles and pretty much any other candy you can think of. Bet you didn’t know that the company has also maintained pet care businesses since 1935, and boasts 41 pet food and healthcare brands. VCA, which back in November had no interesting in selling itself, operates a vast network of animal hospitals, labs and day care centers. It’ll bring over $2 billion in annual sales to the table, and Mars Petcare will now be Mars Inc.’s largest business segment. Wow. Whether you call it a pivot or an upgrade, this will surely be one to follow.

McDonald’s Trims the Fat

…And franchises off 80% of its China business. In a deal valued at $2.1 billion, McDonald’s (-0.27%) will be handing over the China reins to private equity giant Carlyle Group and a state-owned Chinese conglomerate. Micky D’s is looking to slim its operations down a notch and up its sales by changing up the ownership structure, especially in high growth areas like Hong Kong. With concerns of increasing competition from local Asian restaurants, it’s not too bad of an idea for McDonald’s to leave the heavy lifting to someone else.

Other Stories

Economic Calendar

  • Monday: T-Bill Auctions
  • Tuesday: Job Openings and Labor Turnover Survey
  • Wednesday: Crude Oil Inventories
  • Thursday: Delta Earnings; Weekly Jobless Claims
  • Friday: JP Morgan, Wells Fargo, Bank of America, BlackRock, PNC Earnings; Retail Sales; Producer Price Index; Consumer Sentiment

The Money Behind the Golden Globes

Sunday night marked the 74th annual Golden Globes, and it was a big one. The awards show featured a lot of fireworks, an impassioned speech from Meryl Streep, a sweep for La La Land, a Ryan Reynolds-Andrew Garfield kiss and the tributes to the actors and actresses who passed away in 2016. So, the usual. Let’s check out the numbers behind some of the award winners:

  • La La Land took home a record seven Golden Globes. Amazingly, the movie’s budget was only $30 million. For comparison, the previous winner of Best Musical/Comedy (which La La Land won this year) was The Martian (somehow a comedy) with a budget of $108 million.
  • Zootopia took home the award for Best Animated Feature Film. Disney invested a lot into production for this one, with a total budget of $150 million. Luckily, it paid off rather handsomely, with the movie taking in nearly $1.02 billion at the box office. There’s a profit margin for you.
  • The highest-paid TV actor who was nominated was Jeffrey Tambor in Transparent. Tambor earns $275,000 per episode. Pretty solid, but remember, that’s just out of those nominated. Those earnings don’t stand up too well when you compare to The Big Bang Theory, where each actor makes around $1 million per episode.
  • One actor not recognized at the Golden Globes was Dwayne Johnson. But don’t feel too bad for him, “The Rock” took home the honor of the world’s highest paid actor by making $64.5 million in 2016. Keep on cooking, Dwayne.

Interview Question of the Day

What would happen if the U.S. got into a trade war with China? (Opinion) (Opinion)

Business Person of the Day

Oliver Schmidt — The Volkswagen executive previously in charge of complying with U.S. emissions regulations. Note the word “previously.” Schmidt was arrested over the weekend by the U.S. on charges of defrauding the U.S. during the automaker’s infamous emissions scandal. Things went from 60 to 0 reeeeeal fast for Mr. Schmidt.

Food for Thought

$233,610. That is how much it will cost, on average, to raise a child in a typical American suburban community. The biggest costs? Housing and child care. Which age group costs the most? Teenagers, beating out their infant counterparts. Sadly, there’s no silver lining in this conservative estimate—it leaves one huge cost out: college education. Young parents have a lot to look forward to.


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