Are you a quant?

Prof. Paris de l’Etraz’s masterclass, held in Tokyo on Febuary 19th, brought a big crowd of attendees drawn by the topic: ‘Think like an entrepreneur’. Drawing on both his long and illustrious work experience, as well as his decision to take on the challenge of starting his own company, Prof. de l’Etraz explained what makes…

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Megaupload. When piracy hurts us all

IE Focus | By Pedro Letai, Professor at IE Business School

After the closure of Megaupload, all the people who used its online storage service for their personal files are now unable to access them. They are just one set of innocent parties affected by digital piracy.Perhaps it’s a bit late now to close the stable doors, as the more pessimistic tend to say with regard to piracy on the Internet. Seeing as pessimism has a habit of taking things closer to the point where you just give up, the Megaupload case has offered some of us a glimmer of light at the end of the tunnel.

On January 19, the FBI closed Megaupload’s download website and detained its head, Kim Schmitz. As I write this, the attorney general has requested that he not be given conditional bail on the grounds that he has enough resources to flee the country. After seeing photos of some of his parties and of some of his assets, the attorney general is not the only one who thinks this. Although Schmitz obviously has to presumed innocent until proven guilty, he would be an odds on favorite in a dodgy character contest.

The angry reaction of the defenders of the social ill known as free access to culture, coupled with the mass elimination of content or even closedown of other accommodation services on the Internet, are enough to make you think that the steps taken are not quite as insignificant as some would have us believe. Meanwhile, cinema revenues in the US have gone up 32% just this week, and video streaming pay sites like Filmin have doubled their traffic in Spain.

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Facebook – more questions than answers

IE Focus | By Dr. Ricardo Perez, Professor at IE Business School

Facebook’s decision to float the company on the stock market has revealed the true figures of this internet giant, and has left quite a few questions unanswered, particularly where advertising is concerned.At last we have some real information rather than just rumors about Facebook’s business figures. Allow me to put things into context with some of the key data. In 2011, $3,200 million in revenues and $1,000 profit. Many analysts expected to see figures over 4,000 million and say they are surprised. Some say that facebook’s revenues have not grown as fast as they should (over 80%), while others complain that net margins are also going down (still at 25%). However all have a positive opinion about the almost 4,000 million that the company has to invest in order to keep growing.

But after examining all these figures there are more questions than answers about Facebook’s future. Let’s take a look at these questions and the challenges they pose for the firm.

How scalable is the advertising business as it stands today? Growth in the advertising sector has decelerated. Adverts that appear on the right-hand side of the screen (I have just counted seven on my personal page) are not relevant in the majority of cases. Hence they are of little value from the point of view of the advertiser. In spite of the fact that they changed their policy at the end of last year, attempting to raise prices and quality, they did not get the desired results. The challenge lies in finding a better formula for using the information available to customers and convert it into a more focused form of advertising.

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