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Dec 4, 2019

DealBook: Google’s Founders to Step Aside, Ending an Era

12-15 minutes - Source: NYT




Credit...Mike Cohen for The New York Times
Google’s founders are moving on
It’s the end of an era: Larry Page and Sergey Brin, who founded the search giant more than two decades ago, announced they were stepping down from executive roles at Google’s parent company, Alphabet, Jack Nicas and Daisuke Wakabayashi of the NYT report.
Sundar Pichai, Google’s chief executive, will become the chief of both Google and Alphabet.
Mr. Page and Mr. Brin have personified the company since its founding and have been two of the technology industry’s most influential figures, on a par with the founders of Apple and Microsoft, Steve Jobs and Bill Gates.
In recent years though, Mr. Page and Mr. Brin, who are both 46, seemed to have lost interest in running the company, and they took lesser roles in day-to-day operations in 2015 when they restructured under Alphabet.
The latest move is essentially the end of the founders’ efforts to make Alphabet the Berkshire Hathaway of the tech industry, Bloomberg writes.
And it confirms the ascendancy of Mr. Pichai, 47, to be one of tech’s most powerful figures. He has run the core Google business for four years, but he has still reported to Mr. Page, Alphabet’s chief executive, and to Mr. Brin, its president.
The change brings some much-needed clarity at the top, writes the WSJ. Though Google’s business has been humming along, the company has been roiled by a restive work force and by the political backlash against Big Tech in general.
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Today’s DealBook Briefing was written by Andrew Ross Sorkin, Gregory Schmidt and Sharon O’Neal.
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President Trump’s trade war with China may go on much longer than Wall Street was hoping.
Mr. Trump said yesterday that he had “no deadline” and suggested that he could wait until after the 2020 presidential election to strike any deal with Beijing, report the NYT’s Katie Rogers, Keith Bradsher and Ana Swanson.
Hopes that China and the U.S. would reach a “Phase 1” deal this month, a signal that the trade war could be winding down, had pushed stocks higher in the last few months.
But an agreement no longer seems at hand. Mr. Trump’s statement rattled investors, and stocks fell for the third straight day.
The comments also raised fresh doubts about international negotiations that were supposed to defuse a growing conflict over how American technology companies are taxed in Europe.
France vowed retaliation if the U.S. followed through on a threat to put tariffs on about $2.4 billion of French products over the dispute.
A federal appeals court said yesterday that the German lender must turn over detailed documents about President Trump’s finances to two congressional committees, a ruling that is likely to be appealed to the Supreme Court, the NYT reports.
The decision is a victory for Democrats investigating Mr. Trump and his businesses, and brings information about the president’s finances one step closer to becoming public, a development he has fought for years.
“We are evaluating our next options including seeking review at the Supreme Court of the United States,” said Mr. Trump’s lawyer Jay Sekulow, who called the subpoenas “invalid as issued.” The Trump team has seven days to seek a further delay from the Supreme Court.
Capital One was also included in subpoenas issued by Democratic-controlled House committees.
The requests for documents from Deutsche Bank are notable because of the breadth of financial information they could provide about Mr. Trump and his business dealings.
Deutsche became Mr. Trump’s main lender after he amassed a string of bankruptcies and loan defaults that cost other banks hundreds of millions of dollars; over the last 20 years, the bank lent Mr. Trump and his businesses well over $2 billion.
A little-known group, the Pharmaceutical Industry Labor-Management Association, is trying to defeat efforts to lower drug prices in the U.S. The group, which targets voters in vulnerable Democratic districts, pairs major drug makers and labor unions, an unusual combination, Katie Thomas of the NYT reports.
The group “includes major drug makers like Pfizer and Johnson & Johnson as well as large construction-industry unions whose members help build pharmaceutical plants and research labs,” Ms. Thomas writes.
Many unions help oversee their workers’ health plans and have an interest in reducing drug costs. But the coalition is seeking to defeat bills that would cut prices.
“It’s really odd,” Representative Rob Nosse, Democrat of Oregon, told Ms. Thomas.
The group’s position was aimed at creating jobs for union workers, said Tim Dickson, the executive director of the coalition.
But it is fighting bills that have the backing of many of the nation’s biggest labor groups, including the United Automobile Workers, the A.F.L.-C.I.O. and unions representing teachers and other government workers.
Ray Dalio’s decade-long succession saga took another turn yesterday. His hedge fund, Bridgewater Associates, said that Eileen Murray, its co-chief, would depart in March, the WSJ reports.
• Ms. Murray is one of Bridgewater’s longest-serving executives and one of the few female leaders in the hedge fund industry.
• David McCormick, a former Treasury official, will become sole C.E.O. after she leaves.
The 10-year transition has been marked by tumult: The announcement yesterday is the sixth C.E.O. change since 2016.
The process has been a “struggle,” Mr. Dalio acknowledged on Twitter.
But the decision brings an end to the succession planning, said Bridgewater, which manages $160 billion in assets and is the world’s largest hedge fund.
One of President Trump’s first tasks after taking office in 2017 was to try to deliver on a campaign pledge to halt illegal immigration, a job that brought significant logistical hurdles. He had assistance from a partner that was already working for the U.S. government: McKinsey.
McKinsey had been brought on by the Obama administration to help reorganize the ICE division charged with deportations but redirected toward helping the agency figure out how to clamp down on illegal immigration, according to ProPublica and the NYT.
But the money-saving recommendations that the consultants came up with — including spending cuts on food and medical care for migrants — made some ICE workers uncomfortable.
Kevin Sneader, McKinsey’s global managing partner, assured employees in 2018 that it had never focused on developing, advising or implementing immigration policies. He said the company “will not, under any circumstances, engage in work, anywhere in the world, that advances or assists policies that are at odds with our values.”
The firm was deeply involved, however, in executing policies fundamental to the Trump administration’s immigration crackdown. McKinsey’s recommendations for cuts went too far for some at ICE, and a number of the proposals were never carried out.
Glencore hinted at a management reshuffle next year that would pave the way for the retirement of its C.E.O., Ivan Glasenberg.
Unilever appointed Conny Braams to the new post of chief digital and marketing officer, expanding the scope of a role previously held by Keith Weed.
Steve Neff, the head of Fidelity’s asset management division, is retiring after just a year in the job. He will be succeeded by Bart Grenier, a senior executive from its international arm.
Deals
• Companies including Charter Communications and Moody’s have vowed to improve their environmental disclosures after receiving warning letters from the activist hedge fund TCI. (FT)
• Renault’s chairman said a merger with Nissan was not the “ultimate step.” (FT)
• A company led by a former Honeywell chief executive, David Cote, and backed by Goldman Sachs is in talks to acquire Vertiv, a U.S. backup-power equipment firm, for more than $5 billion. (Reuters)
• A Hudson’s Bay special committee rejected Catalyst Capital’s unsolicited bid, saying it was not superior to an agreed-upon deal with a consortium led by its executive chairman. (Reuters)
• Twitter plans to raise $600 million through its first unsecured bond sale. (WSJ)
• Wealthy individuals are betting big on early-stage technology companies in Europe. (FT)
• Concerns over climate change will reduce the amount of capital available for private equity investments in fossil fuels. (Axios)
Politics and policy
• Kamala Harris dropped out of the presidential campaign after months of falling poll numbers. (NYT)
• Representative Devin Nunes, Republican of California, is suing CNN for $435 million, saying the network published a “false hit piece” on him. (WaPo)
Impeachment
• House Democrats released an impeachment report that found the president “placed his own personal and political interests above the national interests of the United States.” And they are debating whether to expand articles of impeachment to include charges beyond abuse of power in the Ukraine affair. (NYT, WaPo)
• Some G.O.P. lawmakers are warming to the allegation that Ukraine’s government meddled in the 2016 U.S. elections, even though a bipartisan Senate investigation found no evidence. (WSJ)
• Records of phone calls disclosed in the House Intelligence Committee’s impeachment inquiry show extensive contact between Rudy Giuliani and the White House during the Ukraine saga. (WaPo)
Brexit
• Bank of America is now set up to deal with Britain’s exit from the European Union, a senior executive said. (Bloomberg)
Tech
• How the threat of Amazon has forced the grocery industry to experiment with smart carts, dynamic price tags and in-store delivery warehouses. (Bloomberg)
• Streaming live sports events faces a key test this week as Amazon broadcasts Premier League soccer matches. (Bloomberg)
• Facebook is developing products such as podcasts and travel apps as the company looks for ways to expand. (NYT)
• Huawei enjoyed huge good will in China after it became a U.S. target in the tech trade war. That has changed in the past few days. (NYT)
• India has become a tough slog for U.S. tech giants now that policymakers have started erecting roadblocks that favor local players. (WSJ)
• Online outrage over a Peloton holiday ad drove its shares down more than 9 percent. (Bloomberg)
• Elon Musk sought to play down his “pedo guy” remark in court, saying it was a generic insult. (NYT)
• Nintendo said it would introduce its gaming console Switch in mainland China on Dec. 10 for $300 in a partnership with Tencent. (Reuters)
Best of the rest
• Caroline Criado Perez won the 2019 Financial Times and McKinsey Business Book of the Year Award for “Invisible Women,” her examination of how designers and developers have perpetuated bias toward men in the data they use. (FT)
• As more travelers become aware of their carbon footprint, sleeper trains are making a comeback in Europe. (Bloomberg)
• Trying to turn around sales, gum makers are creating formulas they say can convey benefits like aiding sleep, boosting energy, relieving pain and aiding weight loss. (WSJ)
• United Airlines struck a deal to buy 50 long-range Airbus jets to replace its aging fleet of Boeing 757s, which are set to be retired in the coming years. (WSJ)
• President Rodrigo Duterte of the Philippines promised to destroy the country’s elite. Instead, “a new wave of businesspeople and loyalists” have been given “access to political power and lucrative government contracts.” (Nikkei Asian Review)
• The Dutch Parliament voted to force companies listed in the Netherlands to have at least 30 percent of their board seats occupied by women. (Reuters)
• The hedge fund billionaire Steven Schonfeld bought a sprawling estate in Palm Beach, Fla., for $111 million, the most expensive home ever sold in the state. (CNBC)
• Hemp farmers in New York State have taken drastic measures to protect their crops from trespassers and from officials who think they’ve found marijuana. (NYT)
• Fans will have to wait until next year for Baby Yoda toys. (Bloomberg)

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