To: Mark Zuckerberg and Elon Musk
From: Joe Mathews
Re: Acquisition and Reputation

Have you two lost your minds?

Both of you are suffering through long-running, self-inflicted public relations crises. Mark, Facebook’s self-serving and ever-shifting policies, the way its platform polarizes politics, and growing alarm about the health effects of social media, have turned you into a lightning rod.

Elon, you are over a barrel for strange behavior, including attacking financial analysts, crying during a New York Times interview (which included the revelation that you use Ambien and recreational drugs), and tweeting yourself into a Securities and Exchange Commission investigation.

Neither of your predicaments is really surprising, given the way the two of you combine planet-sized ambition with questionable management. What is puzzling is your failure to escape these crises.

Why haven’t you taken advantage of the obvious, cheap, and proven way to launder your reputations and curry favor with the media?

That method is straightforward:

Buy your local newspaper!

There’s no better balm for a billionaire’s press clippings than saving a newspaper.

Exhibit A is Amazon’s Jeff Bezos, who was known for tax avoidance and cold-blooded ruthlessness in remaking the American retail landscape until he purchased The Washington Post for some loose change ($250 million). Despite being the world’s richest person—the sort of thing that used to make you a target of media types—Bezos is now described as a defender of democracy (“Democracy Dies in Darkness” is the Post’s Bezos-era motto) against the madness of President Trump.

In California, Dr. Patrick Soon-Shiong is taking the reputation-burnishing possibilities of media ownership to the next level. Soon-Shiong has long received bad publicity—for questions about the drug business that made him a billionaire, for self-dealing in his philanthropic and cancer test endeavors, for a troubled L.A. hospital chain he bought, and for allegations of financial improprieties lodged by people including his brother and Cher.

But then the good doctor rescued the L.A. Times and San Diego Union-Tribune from the clutches of a Chicago-based entity called Tronc. Now Soon-Shiong is being celebrated by hard-bitten reporters for restoring local ownership and investing in investigative reporting.

Sure, buying a paper isn’t free, but it’s cheap for billionaires, and can even pay for itself. Soon-Shiong had to overpay—$500 million—to wrest the Times and the Union-Tribune away from their Chicago owners. But the purchase has provided him a valuable ballast of virtue that could reduce questions about his other businesses.

In Boston, billionaire John Henry—who was educated in California, and built his investment company in Orange County—purchased The Boston Globe essentially for nothing, since he made back more than its $70 million purchase price by selling its headquarters land for more than $80 million.

Likewise, owning the Post sure hasn’t hurt Bezos’s business. The state government of Maryland, which the Post reports on, has offered an astounding $8.5 billion in tax incentives to convince Amazon to build a second headquarters there.

Of course, there are other rewards for buying newspapers, if you care: namely, that you’ll be doing a public service. Today’s newspapers are in deep trouble, struggling for revenue and constantly shedding staff. By buying papers, you two—if you’re willing to spend a little on the product—would provide stability to vital if weakened institutions that still try to get the facts and bind communities together.

Think of the opportunity—you could do a good deed, and help your public image in the process.

Now, to be fair, you’re still rich and famous and will face public scrutiny. And if you too blatantly deploy your newspapers to serve your other interests, you could run into trouble. (Soon-Shiong’s reported habit of using his philanthropy to serve his business ventures suggests that conflict with journalists at his papers is likely.) But once you own the paper you’re likely to be less of a target. Journalists have limited time and money to go after subjects; they’re not keen to devote precious resources to biting the hand that feeds.

So what should you buy? For you, Zuck, the obvious target is your hometown paper, the San Francisco Chronicle. You once told the paper’s editor, Audrey Cooper—according to an open letter she wrote to you—“how important The Chronicle’s work is in the Bay Area and how invested Facebook was in helping us to do it.”

Of course, in that same letter, Cooper called you out for not dealing honestly and consistently with the Chronicle and other publishers, and abdicating your responsibility to improve the public discourse. The good news is that, by buying the paper, you could work with her to show your commitment to said discourse. It would be a chance to demonstrate that the days of “move fast and break things” are behind you.

Since your press is even worse, Elon—your nasty habit of attacking reporters and suggesting you’d produce a rating system for journalists has predictably backfired—you’ll need to buy a tougher target: Digital First Media. That’s a newspaper group owned by Alden Global Capital, a New York-based hedge fund.

You don’t have to buy the whole chain. It would be enough to grab the pieces of the chain from Southern California, where you live; this means everything from the Orange County Register to the Los Angeles Daily News.

Alden, which has ruthlessly cut its staffs and newspaper offerings, is one of the few institutions with a worse reputation among journalists than yours. That’s good news for you. If you bought the papers and restored staffing and investment in the news product (maybe your Saudi buddies could help), you’d find yourself transformed overnight into a journalistic hero.

And if the papers lose money, well, they’ll fit in well with other pieces of your portfolio, like Tesla, which still isn’t profitable.

Yes, I know that newspapers are not the business you want to be in, but they still shape public narratives. So, Mark and Elon, you face a choice. You can keep complaining about all the bad press you get. Or you can buy your own newspapers, and, in the process, give a boost to media and civic life in your own state of California.

If you two are as smart as you’re supposed to be, your next moves are obvious.

The post Why Two California Billionaires Should Buy Newspapers appeared first on Zócalo Public Square.

There has long been a strong co-dependency between Indian immigrant entrepreneurs and engineers and Silicon Valley; and, increasingly, between Silicon Valley’s global growth prospects and the massive Indian market. It’s no wonder Mark Zuckerberg is rolling out the red carpet for the Indian head of state.

An intriguing question is what Modi hopes to get out of the visit, and a one-word answer comes to mind: talent. We’re all familiar with the big wave of engineers and information technology graduates that flowed from India to the U.S. over the past few decades and its role in the Silicon Valley boom. The U.S. tech sector’s related outsourcing trend conversely created many IT related jobs in India, transforming the economies of cities such as Bengaluru, Chennai, Hyderabad, and Pune. But to date, the bulk of that activity has been focused on satisfying the demand for products and services in America and other developed economies, thus limiting its impact within India.

Now the time is ripe for a second wave, a wave in the opposite direction. This time the demand for innovation and technology products is in India, and the top talent needed to make it happen is in Silicon Valley, and other American tech hubs.

Modi has announced a “Digital India” initiative that follows a previously launched ambitious nationwide biometric identification project, alongside a plan to create 100 “Smart Cities.” The Digital India plan aims to dramatically increase Internet access for a billion people in India; currently only 40 percent of the population has some basic online access, and only 10 percent have access at decent speeds. But the potential is enormous because the penetration of cell-phones in India is now quite high, with prices of smart-phones dropping to less than $20. Meanwhile, Zuckerberg and Facebook are backing Internet.org’s goal of connecting everyone in the world to the Internet, a goal that is starting to seem achievable in the not-too-distant future.

Zuckerberg met Modi in New Delhi earlier this summer and the two heads of state—if we can call Facebook a “state”—share a passion for democratizing access to information. Modi’s Digital India initiative has the potential of revolutionizing how India’s notoriously inefficient government services are provided and of bringing financial services to people once excluded from the traditional banking sector.

So there is understandable excitement around Modi’s ambitions and the bold plans he has announced since taking office nearly a year ago. This has energized many Indians, including many who left the country many years ago to come to the U.S. and other developed countries seeking fortunes, better living conditions, and appreciation for their talent and skills. I myself came to the United States from Rajasthan in India more than 30 years ago as a graduate student, accepted a job as an assistant professor at UCLA Anderson School and became a naturalized U.S. citizen 15 years ago. But I have continued to go back to India every year to teach, do research, and participate in social initiatives in India. However, I, and many others like me, also have a fair amount of skepticism about whether Modi will be able to follow through on his vision and create the right conditions to give it a chance to succeed.

Getting things done in India, after all, requires far more than grand ideas and capital. The British, before they left their prized colony, established a civil administrative service now known as the IAS (Indian Administrative Service)—the bureaucracy that makes things run and implements plans. The IAS personnel are chosen through a highly selective process, and are very bright and ambitious technocrats. But they are also very poorly paid. They are the gatekeepers that monitor and control access to the ministers and the politicians. In any large bureaucracy, controlling such access is a source of power. And power in the hands of poorly compensated, but highly talented, people invites corruption and inefficiency. For example, when I have tried to approach ministers with some reasonable ideas on how we can use technology for financial inclusion and women safety, the ministers have received them with enthusiasm, but the gatekeepers’ follow-up responses have varied from a lack of urgency to utter indifference.

It is no surprise that India ranks 142 out of 189 in the “ease of doing business” ranking complied and published by the World Bank. Though Modi has promised that he will work on improving this ranking, it is not clear what he has done or can do to diminish the bureaucratic gridlock that often confronts those wanting to do business in India as well as those who want to implement innovative social initiatives that can improve welfare across the country.

In addition to India’s notorious IAS-inspired red tape, excessive nationalism is another stumbling block standing in the way of the nation’s development. While the United States (and its tech sector) is a prime example of a nation that benefits from importing talent and ideas from elsewhere, India’s political culture resists even the re-importation of successful entrepreneurs of Indian heritage.

Modi needs to encourage talented Indians to come home, and in some cases join the government, but there are many vested interests who oppose the appointment of such people, arguing that anyone holding a position of power must be a citizen of India. And this becomes a circular argument (such are the ways of bureaucratic nonsense) because India does not allow dual citizenship, so many talented people of Indian origin worth attracting in this country are naturalized U.S. citizens who’ve since had to renounce their Indian citizenship. Sam Pitroda, a telecom visionary and entrepreneur who was invited by Prime Minister Rajiv Gandhi in the late 1980s to reform the antiquated telecom industry, had to renounce his U.S. citizenship to be given an important role in the government.

Political interests in India tend to be rather parochial. The governor of the Reserve Bank of India, Raghuram Rajan, is universally regarded as one of the most talented central bankers in the world, yet he faces a constant threat of removal, or non-renewal to the position, by narrow-minded political interests in the Prime Minister Modi’s ruling party BJP who resent his resolute independence and view him as an outsider. This despite the fact that Rajan, who was appointed by the previous prime minister from another party, did maintain his Indian citizenship when he lived in the U.S. as a renowned academic at the University of Chicago for many years. So far, Modi deserves credit for holding onto Rajan in the face of tremendous pressure to make a change.

Modi, and India more broadly, should invite some of his nation’s impressive diaspora to go home. With economic incentives, political license, and the freedom to implement ideas, their investments would help more than a billion people. The brain-drain from India to the U.S. over many decades now has the potential to turn into a brain-gain for India.

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