Message From Michael 
March 3, 2009
THE FECKLESS, FACILE, FUTILE NEWS MEDIA
CANARIES, MOSQUITOES, NUDISTS, AND SNOW WHITE
THE BUFFETT BAILOUT BLUES
FACEBOOK’S FAMILY FEUD
MORE FACEBOOK FACTOIDS
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THE FECKLESS, FACILE, FUTILE NEWS MEDIA: Three different reports on the news media – most particularly the so-called ‘traditional’ news media and three different, but similar, words to describe them. It’s not often that one gets to use the word ‘feckless’ in a sentence, but that was the word that came to mind after reading the We Media/ Zogby Interactive poll which found that Americans are “deeply dissatisfied with the leadership” being provided by traditional media. Nearly three quarters (71%) said they are ‘not very’ or ‘not at all’ satisfied, leaving about a quarter (27%) who are satisfied – which was less than half (56%) of those who said they were satisfied with online media leadership. Government (74% dissatisfied) and business leaders (81%) fared worse. Instead the survey says two-thirds of Americans (63%) believe small business owners and entrepreneurs along with science and technology leaders (52%) “will lead the
Another study, this one done by two professors at Indiana University, found that despite the oft-repeated accusation of liberal media bias, that in fact, the news media in Presidential elections actually favored the Republicans. Professors Maria Elizabeth Grabe and Eric Bucy say in their book, Image Bite Politics, that the ‘volume’ of coverage focusing on just one party actually favored the Republicans, although they note that when they examined the ‘duration’ of the actual stories, there was no indication of favoritism. The telling point, according to the news release by the University, came when they studied the ‘visual coverage’ with the volume turned down. Here they looked at the “lip flap” effect where the reporter’s narration is laid over the candidate talking, and which they say is one of the most negative images, as well as the “goldilocks” effect in which one person is given the last say in a piece and is thus better remembered by viewers. In their research, Democrats were more likely to be ‘victims’ of the lip flap effect while Republicans most often had the benefit of the last word. Republicans were also less likely to be shown in the ‘unflattering perspective’ of an extreme close-up and more likely to be shown from a low angle camera shot, which has been demonstrated to ‘attribute power and dominance.’ Meanwhile, the unabashedly, admittedly liberal group Media Matters for America accuses the media of being too ‘facile’ (my word) in its coverage of the ‘economic recovery’ legislation. The group says it reviewed 203 hours of Sunday morning talk shows along with 12 cable networks. Of the 722 guest appearances, only 41 were with economists. That represented only six percent of all the interviews, which was the same as the five percent the group found in its previous study. The result, says the group, is that the coverage has been marred by “conservative falsehoods and misinformation.”
CANARIES, MOSQUITES, NUDISTS AND SNOW WHITE: They’re just some of the topics in financier Warren Buffett’s latest letter to shareholders. The canary-in-the-coal-mine was the manufactured home debacle which Buffett says should have been a warning to the conventional housing market. The “two hungry mosquitoes in a nudist camp” is how Buffett describes himself and the CEO of GEICO as they see opportunities in the auto insurance industry. And Snow White? Well, that refers to the insurers of tax-exempt bonds who had a good thing going but then got greedy. He says their problem was, in the words of Mae West: “I was Snow White, but I drifted.”
It seems like everyone else in the media world has discovered financier Warren Buffett after we’ve been writing about his letter to shareholders in MfM for five years now. Excerpts from his newsletter warning about the dire financial situation facing the nation have been featured on numerous cable and network news shows as well as newspapers. So, nothing for me to report, right? Wrong. First off, aside from the great quotes, some great advice on why his company Bershire-Hathaway is consistently successful: By maintaining a “Gibraltar-like financial position” with excess liquidity and modest near-term obligations; widening the “moats” around his businesses to give them “durable” competitive advantages; acquiring and developing new and varied stream of revenue; and expanding and nurturing a cadre of outstanding operating managers. Buffett goes to great lengths throughout the letter to compliment his various C-level managers. How many other CEO’s do that? How many other CEO’s also admit that they did “some dumb things” as he admits he did with some investments.
THE BUFFETT BAILOUT BLUES: As so often noted, Buffett is not your typical CEO. In fact, he doesn’t seem to think much of most CEO’s especially those who have become dependent on federal aid because “weaning these entities from the public teat will be a political challenge.” He also has another reason that makes him, and those of you angry over the bailout, even angrier. Even though Berkshire is one of only seven corporations in the United States to have the highest credit rating possible (Triple A rating), his cost of borrowing is far higher than his competitors with ‘shaky balance sheets’ because they now have government backing. Want another? Buffett tells how nine days AFTER (let me repeat that word – AFTER) the CEO and CFO of Freddie Mac resigned in disgrace, the federal agency allegedly responsible for overseeing the two bureaucracies (OFHEO) reported “both enterprises were financially sound and well managed.” Buffett notes it wasn’t until four years later that the overseeing agency issued a scathing report that “blamed the fiasco on every party but – you guessed it – Congress and OFHEO.” Buffett’s analogy is that such groups are like someone trying to avoid venereal disease: “It’s not just whom you sleep with, but also whom they are sleeping with.” From this “irritating reality,” as Buffett puts it, comes The First Law of Corporate Survival for ambitious CEO’s – “Modest incompetence simply won’t do; it’s mindboggling screw-ups that are required.” Despite all this, and despite his concerns about “unwelcome aftereffects”, Buffett says the government had to do something because the consequences otherwise would have been cataclysmic.
FACEBOOK’S FAMILY FEUD: The world’s most popular social networking site underwent a civil war after its terms of service. No doubt, you’ve probably heard all this by now. I admit I should have mentioned this in last week’s MfM. It’s still worth re-visiting because of Facebook founder Mark Zuckerberg’s blog about the issue (http://blog.facebook.com/blog.php?post=54434097130 ), in which he, more or less, admitted to a mis-step and spun it that the controversy helped “highlight the importance of these issues and their complexity.” He says privacy and information sharing “is a big focus for us this year” and promised to “post some more thoughts on open-ness.” It was also worth re-visiting because of a claim by a Chinese social networking site that it is in fact the world’s largest social networking site. As reported by VentureBeat and China Web 2.0, the site – Qzone – had more than 200 Million monthly active users in January. That is far larger than the 175 Million claimed by Facebook, although even that is in dispute. Website MarketingVox cites recent comScore data that shows Facebook at 221 Million visitors at the end of the year and that number was actually behind Google-owned sort-of social network Blogger with 225.5 Million visitors.
A FEW FACEBOOK FACTOIDS (OR THE ALTERNATIVE TO COCKTAIL CHATTER): There are more than 400,000 developers working on different apps for Facebook around the world. More than 10 Billion photos have been uploaded to the site. Interestingly, as website TechCrunch.com notes, Facebook was running neck and neck in terms of the rate of photo uploads (at roughly 20 Million) with the two other major competing sites – Photobucket and Flickr. But by January, Facebook had leapt ahead (33.6 Million unique visitors in the
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