Big business in America is booming. In the Obama years, corporate equity reflected in the modern staples of Internet Technology and Cable TV instead of companies like Coca-Cola http://investing.businessweek.com/research/stocks/people/person.asp?personId=1092567&ticker=KO where Herb Allen worked. A recent CEO change at Microsoft has been more noticed than felt; Bill Gates has officially been replaced as CEO by Satya Nadella, who Microsoft named as its new chief executive. The corporation continues its U.S. dominance and global leadership moving forward to ever more complex and productive editions of its flagship windows systems. Mr. Nadella asked Bill Gates to become a part-time adviser to Microsoft, a change that comes with immense potential benefits for the company. There is room for growth in many of Gates’ particular areas of development, as global markets demand more responsive software-based management systems
In the Cable business, a merger acquisition between Time –Warner and Comcast has tilted the scales of the growing home entertainment business. Comcast has agreed to purchase Time-Warner in an all-stock purchase valued at $45 Billion. Comcast CEO Brian Roberts announced the transaction and defended it as a benefit to consumers who would have better service and greater choices because of the combination. Time-Warner CEO Rob Marcus echoed the claims for benefits, and made the case in support of the merger as expanding consumer choices and upgrading services. Analysts agree that Time-Warner subscribers will enjoy the benefits of superior equipment, infrastructure, and software from Comcast.
Before the purchase; Comcast had a market share of 29% with 23 million subscribers. Time Warner had approximately 10 million subscribers. The net effect after the merger is a 30% market share; the new entity will shed approximately 3 million subscribers to keep its share below 30%. This threshold has been the policy rule in recent years to trigger complaints of antitrust violations by the Department of Justice.
The proponents of the merger emphasize that the anti-competitive effects of the transaction will neither be substantial nor in violation of antitrust policies. The merger will shape markets for internet, cable and on-demand movie services in a broad territory across the United States. Many analysts have weighed in with favorable opinions and analysis of the transaction.
The strong positives include:
That Comcast and Time-Warner do not compete in many geographic areas; and
That Time-Warner has scored low while Comcast leads in customer satisfaction, and the new entity will capture savings by use of Time-Warner systems rather than building new capacities. The merged entity will participate in 19 of the top 20 geographic markets in the U.S. and will involve telephone, internet, cable, and related services.
In the energy sector, the XL Pipeline dominates news and discussion as the project continues its push to completion of a new transcontinental shipping route for Canadian Tar sands crude oil. The project supported by Koch Industries, CEO’s Charles and David Koch have used considerable financial resources to push the project and overcome objections and legal actions by property owners and environmentalists. Koch Industries would benefit from its Alberta Land holdings to stock trading through its exploration and development, and finance companies. The Department of State had jurisdiction over the project due to its international component, moving tar sands crude from Canada. The preliminary report by the State Department found greater economic benefits to capturing the energy supply than in declining it. Stopping the project would permit increased oil sales to China and other competitors.