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| Here’s your daily business briefing. - 💰 Liberty to acquire MotoGP for $3.8B
- 🔍 Deep Dive: Huawei profit doubles despite U.S. sanctions
- 🏠 TikTok transforms real estate leads
Thanks for reading! Shriram
p/Shriram | |
| 1 | | Liberty Media Corp., the parent company of Formula 1, is buying the MotoGP World Championship from Dorna Sports for $3.8B, acquiring Dorna Sports, the exclusive rights holder, through a mix of cash and Series C Liberty Formula One common stock. MotoGP, often dubbed as the two-wheeled equivalent of Formula 1, will become part of Liberty Media's diverse portfolio spanning media, communications, and entertainment sectors. More: - The purchase aligns with Liberty Media's goal of broadening its footprint in crucial markets like the U.S. and utilizing digital streaming to boost sports viewership, as exemplified by the hit series "Drive to Survive."
- Antitrust authorities may scrutinize the acquisition because of MotoGP's importance to the motor racing sector and possible competition issues.
- MotoGP intends to have 21 races in 17 different nations this season, demonstrating the scope and international appeal of the competition.
- Liberty Media aims to finalize the deal by the close of 2024, financing it through cash and debt, with CEO Greg Maffei outlining plans to broaden MotoGP's reach to a more extensive international audience.
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What the numbers say: Despite facing hurdles posed by U.S. sanctions, Huawei has successfully revitalized its presence in the Chinese market, with China contributing nearly 70% of its revenue in 2023. The company's net profit surged to $12B in the same year, marking a remarkable increase of over 140% from the previous year, while revenue experienced notable growth, rising by 10% to $99B. Relevance: Huawei's impressive profit surge demonstrates its ability to rebound after facing restrictions on accessing advanced technology due to U.S. export controls. Diversification into cloud computing, enterprise software, and automobile systems has been pivotal in Huawei's resurgence. This success underscores China's localization efforts' significance and its emphasis on self-reliance, particularly in critical sectors like semiconductors. More data: Huawei maintained its substantial investment in research and development, allocating $23B in 2023, which accounted for approximately 23% of its total revenue. Notably, the company's cloud computing division saw a robust 22% revenue growth, consolidating its position as a formidable player in China's cloud computing arena, surpassing competitors like Alibaba Group and Tencent Holdings, while its consumer business group reported a 17% rise in sales, and revenue from telecommunication equipment and enterprise technology increased by 2%. | | | |
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| 3 | | Real estate agents are embracing unconventional strategies such as radical honesty, pop music, and humor to engage with first-time buyers on platforms like TikTok, where real estate-related posts have surged by 40% in the first two months of 2024 compared to last year. This trend reflects the evolving role of social media as a primary search engine and the growing preference for audiovisual content in home-buying, altering how people seek homes and interact with agents. More: - TikTok's popularity among 18- to 29-year-olds, with 62% of them using the platform, makes it a valuable tool for connecting with potential first-time homebuyers, as one in three U.S. adults are active users.
- Although TikTok is a potential platform, agents use numerous platforms for lead generation because the future of ByteDance Ltd.-owned TikTok in the U.S. is still unknown.
- Agents that successfully incorporate their personalities into their videos, such as Andy Klaric and Brad Scott, have seen increased engagement from prospective clients and viral content.
- Cesar Gutierrez from Milestone Real Estate Group in Laredo, Texas, has achieved success through his witty and unconventional methods, garnering hundreds of thousands of views and numerous leads.
- TikTok has emerged as a primary source of high-quality leads for real estate agents, with 54% of the National Association of Realtors survey respondents ranking it as their top lead source in the year leading up to 2023.
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| 4 | | Magna, a leading advertising forecaster, has revised its 2024 U.S. advertising spending forecast upward, anticipating a 9.2% growth in ad sales by media owners to $369B, compared to the initial estimate of 8.4%. Noncyclical growth is also projected to rise to 6.7%, exceeding the earlier prediction of 5.9%, despite lingering concerns over subdued retail and automotive sales consumption trends amidst improved economic indicators. More: - In 2024, marketers in various industries, such as retail, tourism, food and drink, and automotive, anticipate raising their advertising budgets.
- Entertainment advertising faces potential stagnation or decline due to reduced releases and promotion of new shows and movies, partly linked to the Hollywood strikes of 2023.
- Tech advertising expenditure is anticipated to maintain its subdued trend as companies prioritize profitability and cost management.
- Advertising sales in the U.S. for 2024 are projected to increase by $10B, with $9B attributed to political ads, spurred by events such as the 2024 election, the Summer Olympics, and the Copa América soccer tournament.
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| 5 | | ThredUp ($TDUP) forecasts the U.S. secondhand market to reach $73B by 2028, growing at an 11% annual rate, with resale gross merchandise value hitting $20B in 2023. Globally, the secondhand apparel market is projected to surge to $350B by 2028, growing three times faster than the overall apparel retail market in 2023, although ThredUp's previous prediction for the global secondhand goods market by 2027 was $350B, recently revised down to $324B. More: - ThredUp's survey reveals that 55% of respondents plan to increase spending on secondhand clothing in 2024 if economic conditions do not improve, driven by financial considerations.
- According to a 2023 survey by OfferUp and GlobalData, 76% of respondents noted decreased stigma associated with used clothing.
- Over half of the participants cited a growing preference for affordability (57%) and a shifting attitude towards waste (55%) as contributing factors to this trend.
- While some experts argue that secondhand sales are more successful in brick-and-mortar stores than online platforms, ThredUp's report indicates that 63% of used apparel shoppers in the previous year made online purchases.
- According to ThredUp's metrics for sell-through and volume sold in 2023, the top three most influential brands in resale were all athletic or outdoor-focused: Lululemon, Patagonia, and Vuori.
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| 6 | | Microsoft ($MSFT) will globally separate its chat and video app Teams from its Office suite, mirroring a previous move made in Europe. This decision follows complaints from rivals like Slack and investigations by the European Commission, which argue that bundling these products gives Microsoft an unfair advantage, prompting the company to unbundle them in Europe last year. More: - Introduced to Office 365 in 2017, Teams replaced Skype for Business and surged in popularity during the pandemic, especially for video conferencing.
- From April 1, non-EEA (European Economic Area) and Switzerland users can select new commercial Office 365 and Microsoft 365 suites without Teams.
- New commercial customers can expect Office without Teams to be priced between $7.75 and $54.75, with Teams Standalone available for $5.25, although actual costs may differ based on country and currency.
- Even after this unbundling, Microsoft can still be charged with EU antitrust violations concerning the costs and incompatibilities with rival messaging services.
- Having faced $2.4B in EU antitrust fines over the past decade for bundling products, Microsoft could incur a fine of up to 10% of its global annual turnover if found guilty of antitrust violations.
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 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Shriram Jeevakumar | |
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