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FACEBOOK: WORLD NOT ENOUGH FOR INTERNET GIANT WHOSE CEO ZUCKERBERG SAYS JOURNEY ONLY 1 PER CENT DONE

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The company is now far more than just a social network and has blown Wall Street away with its latest results. But should we be concerned about its growing power?

“Our journey is only 1 per cent done,” said Facebook chief executive Mark Zuckerberg after unveiling a set of numbers that had even Wall Street’s hardened analysts bowing down and crying “we’re not worthy”.

Apparently it’s a saying around the stunningly successful IT company, the tendrils of which continue to extend ever more deeply into our day-to-day lives. Translation “you ain’t seen nothin’ yet”. Did you just shudder? I did. Just a bit.

Mr Zuckerburg’s baby is now far more than just “the social network”, with apologies to the same-named biopic. It is a dominant force in mobile advertising (growth of 63 per cent). It is a huge platform for the delivery of media globally, including The Independent. Its messaging services are used from Shanghai, to Singapore to Sheffield. And it has a licence to print money.

The internet’s migration to mobile has secured that, helping Facebook to smash through the $6bn in revenue Wall Street had forecast for the April-to-June reporting period. The actual number came in at $6.4bn, up 59 per cent.

And it was only just over 12 years ago that a website called TheFacebook went live in New England. Chew on that.

Facebook won’t. That’s ancient history to a company that is running faster than Usain Bolt on steroids. Did you know that you can now take 360 degree photos with its apps? That its video services are growing like Japanese knotweed? These are expected to dominate its services before too long, and YouTube owner Google has reason to be nervous. Along with WhatsApp, bought for $19bn just under two years ago, it connects in excess of 2bn people through messaging.

Further out, Facebook has ambitions to to bring the internet to vast numbers of previously unconnected people through its solar powered Aquila drones. They will presumably then become Facebook users and continue to power its staggering growth.

Does that sound like pie in the sky? It shouldn’t. They’re flying. Mr Zuckerberg says tests have been successful. They’ll be out there before too long.

In the meantime the company mines data with scary efficiency. It knows us, it knows our views, what what we like, what we don’t like, what films we enjoy, perhaps the bands we listen to, the books we read, what we spend our money on. That last one is key.

And it’s only 1 per cent done.

It is true that many IT companies that once looked like world beaters have either disappeared or been gobbled up on the cheap. Remember MySpace? Not many do. Yahoo! just announced that it is preparing to join AOL in Verizon’s stable of second-raters. Twitter is starting to show signs that it might one day join them. It isn’t there yet but growth is stalling, revenues are sagging and younger rivals such as Instagram and SnapChat are nipping at its heels.

Facebook, however, crossed the rubicon a long time ago. It is now big and powerful enough to buy its way out of either trouble or rapid and unexpected change in consumer habits.

In many ways Facebook has enriched our lives. When I came within an ace of being killed in a cycling accident it was Facebook that my family used to disseminate the news among our friends and family. It was Facebook that was the conduit for the support we desperately needed. The positive impct of the company should not be under esimtated. It’s some story.

However, Facebook has also become enormously powerful. And this is what worries me. How would you feel if, I don’t know, Rupert Murdoch had his hands on that power? Or even Sir Philip Green, as opposed to  the nice, liberal, if socially awkward, Mr Zuckerberg?

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Industry

THE FINTECH REVOLUTION IN INSURANCE

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Advancing technology has collided with longstanding customer issues to create a series of deep, lasting, systemic challenges for insurance. How will these trends impact insurers’ businesses and the industry overall?

The rise of fintech, changing consumer behavior, and advanced technologies are disrupting the insurance industry. Additionally, Insurtechs and technology startups continue to redefine customer experience through innovations such as risk-free underwriting, on-the-spot purchasing, activation, and claims processing.

The report from Deloitte Global examines forces that are disrupting the insurance industry and presents four possible scenarios for the future. We explore:

  • Changing the channel: Partnerships with product makers and distributors, and embedding insurance into other products and services may enable customers to select products that best fit their lifestyle.
  • Underwriting by machine: Technology advancements including AI innovations and algorithms will likely individualize risk selection and pricing, and customers can select products based on a wider range of price points.
  • Rise of the flexible product: Time-flexible, event-driven, modular and adjustable coverage may evolve to accommodate life stage, lifestyle, and wellness changes among consumers.
  • E-Z life insurance: Given the growth and shopping patterns in emerging markets, insurers who introduce flexible term products, and master digital distribution without compromising underwriting are likely to win in the marketplace.

Read the report to understand what the future holds for the insurance industry.

Key Contact

Neal Baumann

Neal Baumann

Global Insurance Leader

Neal leads Deloitte’s Global Insurance practice and is the US insurance consulting leader. He has 20 years of experience advising financial services and insurance company clients on corporate and comp… More

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GOOGLE NEVER REALLY LEFT CHINA: A LOOK AT THE CHINESE WEBSITE GOOGLE’S BEEN QUIETLY RUNNING

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More information is leaking out about just how Google is planning to re-enter the Chinese market with a mobile search engine application that complies to the country’s censorship laws.

The Intercept first broke this story when a whistleblower provided them documentation detailing the secret censored search project (codenamed Dragonfly). According to them, an overlooked Google acquisition from 2008 — 265.com — has been quietly laying down the foundation for the endeavor.

In order to run a business in China, tech companies are required to obtain a Internet Content Provider license from the Chinese government. As it’s difficult for foreign businesses to obtain this license, Google has long partnered with Chinese IT company Ganji.com. Back in the early years of Google.cn, Google actually operated directly off of Ganji.com’s license, even claiming the Chinese company was temporarily running its search engine. Facing intense scrutiny from the Chinese government and the media over this license arrangement, in 2007 Google formed a legitimate joint venture company with Ganji.com — the Beijing Guxiang Information and Technology Co.

Because of the necessity of that license, Google has maintained that joint venture and has been operating in China under the name Beijing Guxiang Information and Technology Co. ever since. Even after the shut down of Google.cn, Google’s Chinese advertising enterprise has been operating under the joint venture company as well as, low and behold, 265.com. A whois search of the 265.com domain name, which provides a record of the current domain registrant information, pulls up Beijing Guxiang Information and Technology Co. as the registrant organization.

A significant number of Google employees are reportedly none too happy about Google’s project complying with Chinese censorship laws. This most recent news, that the company has long been collecting data for a moment just like this, surely won’t make morale among these workers any better.

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WHISTLEBLOWER REVEALS GOOGLE’S PLANS FOR CENSORED SEARCH IN CHINA

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Google is reportedly planning to relaunch its search engine in China, complete with censored results to meet the demands of the Chinese government. The company originally shut down its Chinese search engine in 2010, citing government attempts to “limit free speech on the web.” But according to a report from The Interceptthe US tech giant now wants to return to the world’s biggest single market for internet users.

According to internal documents provided to The Intercept by a whistleblower, Google has been developing a censored version of its search engine under the codename “Dragonfly” since the beginning of 2017. The search engine is being built as an Android mobile app and will reportedly “blacklist sensitive queries” and filter out all websites blocked by China’s web censors (including Wikipedia and BBC News). The censorship will extend to Google’s image search, spell check, and suggested search features.

The web is heavily censored in China, with the country’s so-called Great Firewall stopping citizens from accessing many sites. Information on topics like religion, police brutality, freedom of speech, and democracy are heavily filtered, while specific search topics (like the 1989 Tiananmen Square protests and Taiwanese independence) are censored completely. Advocacy groups report that censorship in the country has increased under President Xi Jinping, extending beyond the web to social media and chat apps.

The whistleblower who spoke to The Intercept said they did so because they were “against large companies and governments collaborating in the oppression of their people.” They also suggested that “what is done in China will become a template for many other nations.”

Patrick Poon, a researcher with Amnesty International, agreed with this assessment. Poon told The Intercept that if Google launches a censored version of its search engine in China it will “set a terrible precedent” for other companies. “The biggest search engine in the world obeying the censorship in China is a victory for the Chinese government — it sends a signal that nobody will bother to challenge the censorship any more,” said Poon.

In a statement given to The Verge, a spokesperson said: “We provide a number of mobile apps in China, such as Google Translate and Files Go, help Chinese developers, and have made significant investments in Chinese companies like JD.com. But we don’t comment on speculation about future plans.”

According to The Intercept, Google faces a number of substantial barriers before it can launch its new search app in China, including approval from officials in Beijing and “confidence within Google” that the app will be better than its main rival in China, Baidu.

Google previously offered a censored version of its search engine in China between 2006 and 2010, before pulling out of the country after facing criticism in the US. (Politicians said the company was acting as a “functionary of the Chinese government.”) In recent months, though, the company has been attempting to reintegrate itself into the Chinese commercial market. It launched an AI research lab in Beijing last December, a mobile file management app in January, and an AI-powered doodle game just last month.

Although this suggests Google is eager to get a slice of China’s huge market of some 750 million web users, ambitions to relaunch its search engine may yet go nowhere. Reports in past years of plans to bring the Google Play mobile store to China, for example, have so far come to nothing, and Google regularly plans out projects it ultimately rejects.

Notably, relations between China and the US have worsened in recent weeks due to trade tariffs imposed by President Trump. The Interceptreports that despite this Google staff have been told to be ready to launch the app at short notice. The company’s search engine chief, Ben Gomes, reportedly told employees last month that they must be prepared in case “suddenly the world changes or [President Trump] decides his new best friend is Xi Jinping.”

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