Oxstones Investment Club™By The Street Staff, 09/24/10
5. BP Oil Spill? Hey, No Big Deal. It’s All Cool.
Here’s a pop quiz for you: Do you remember, a few months ago, when a little company called BP(BP_) spilled some oil in the Gulf of Mexico? Not too much. Only about 205 million gallons. Made the news for a few months. You might have heard of it.
Well, back in June, Dow Jones and boutique investment management firm SAM apparently remembered, and they removed BP from the Dow Jones Sustainability Indexes. Given that whole Gulf-of-Mexico, rig-explosion, loss-of-life-ending-in-environmental-catastrophe thing, it seemed a reasonable decision.
But apparently — or outrageously, depending on your point of view — BP’s removal from the list left the door open for its partners in slime to join the earth-friendly club. That’s right, Dow Jones and SAM thought it would be a great idea to go ahead and extend invitations to Halliburton(HAL_) and Nalco(NLC_) to join the index.
Let’s consider this, shall we? Admittance to the Sustainability Index is based, according to SAM, on a “thorough analysis of corporate economic, environmental and social performance, assessing issues such as corporate governance, risk management, branding, climate change mitigation, supply chain standards and labor practices.”
So, let’s see: Halliburton — a dubious firm on the best of days — was responsible for the Macondo well cement job, which may or may not have been partly or wholly responsible for the worst environmental disaster in U.S. history.
Nalco, for its part, manufactures the chemical dispersant that was used by BP to break up the oil covering the surface of the Gulf. At the time, numerous press reports highlighted the toxicity of Nalco’s dispersant relative to other dispersants available for use by BP (more than four times more toxic than the oil itself, according to a class-action lawsuit filed against BP and Nalco by residents of Louisiana). At one point, the Environmental Protection Agency even mandated that BP find an alternative — a mandate that went unheeded as BP claimed that there were no other chemical dispersants manufactured in high enough quantities to use.
And now bear in mind that a former BP executive and a former ExxonMobil president sit on Nalco’s board of directors — just sayin’.
So what’s the word for when two companies involved in the worst environmental disaster in U.S. history are added to the list of the most sustainable companies in North America? Oh, right, we remember … it’s “dumb.”
TheStreet Says: Hey, Dow, it’s called the “sustainability” index, not the “stainability” index.
4. Zuckerberg: Can’t Buy Me Love
A sudden fit of philanthropy has apparently gripped Facebook founder Mark Zuckerberg — and just in time for the debut of the movie that will apparently depict him as something of a jackass.
Yes, the Zuckster will be appearing on The Oprah Winfrey Show today to announce his $100 million donation to Newark public schools, the first dip into the philanthropic waters for the mercurial young billionaire. Oh, and the movie The Social Network also comes out tonight, but that’s just fiction. Look over here! Oprah! $100 million! Lookie look!
Zuckerberg, it’s worth noting, is worth an estimated $6.9 billion and is ranked No. 35 on the Forbes 400 list of richest Americans this year. He’s also 26 years old. Good for him! And lord knows that Newark public schools are in desperate need of assistance, so it’s hard to criticize the act itself — that would be like criticizing the rescue of puppies from burning buildings.
Still, it’s unfortunate that Zuckerberg has made it impossible to view the donation as anything but a blatant attempt to change the story line. And for what? Is The Social Network going to go down as this generation’s Citizen Kane?
Mr. Zuckerberg, might we suggest you follow the example of your peers. The Devil Wears Prada didn’t send Anna Wintour into a tizzy. Hell, take a page from Donald Trump. You’re a billionaire after all, so just unleash an army of lawyers on anyone who so much as looks at you funny. Even if you have no chance of winning, introduce them to the joy that is the U.S. legal system. Or just start calling your critics “world class losers.” Works for Trump.
Newark Mayor Cory Booker and New Jersey Governor Chris Christie are also expected to appear on the show to discuss the contribution. They’ll no doubt thank you, and we sincerely hope your contribution changes the lives of many children. But if it takes a nasty movie about you to open the charitable coffers, we hope many, many more are made.
TheStreet Says: Facebook? More like Saving-Face Book.
3. Netflix: Lights, Camera, Act Like You Like Us!
Netflix(NFLX_) should have spent Thursday tap-dancing on the grave of Blockbuster(BLOKA.PK). Instead, the online movie rental giant was dealing with a sticky, maple-syrupy public relations nightmare of its own making with our neighbors to the north.
In case you hadn’t heard, it seems that Netflix on Wednesday hired actors to act “really excited” about the launch of its online streaming service in Canada. The fake fans were given written instructions by the company on how to properly gush about the Website to reporters covering the Canadian launch party in Toronto. According to a one-page handout, they were encouraged to act as certain archetypes, including mothers, film buffs, tech geeks and couch potatoes.
“Extras are to behave as members of the public, out and about enjoying their day-to-day life, who happen upon a street event for Netflix and stop by to check it out,” the information sheet, published on Forbes, reads. “Extras are to look really excited, particularly if asked by media to do any interviews about the prospect of Netflix in Canada.”
Netflix’s explanation for this is so disingenuous, it pains us to even write it. But here it goes: Company spokesman Steve Swasey acknowledged the theatrics, but maintained that Netflix didn’t mean to mislead reporters. According to Swasey, in order to qualify for a permit to shut the street down, Netflix told the city they were making a corporate documentary. Supposedly, the extras on set were to be filmed for that documentary, not in interviews conducted by outside reporters. You see, this was just a case of poor directing.
“The launch included the shooting of a corporate video with some hired extras, who, it turns out, were given improper direction to talk with the news media about their enthusiasm for the Netflix service,” Swasey wrote on the company blog. “We’re sorry that our misfire has given Canadians any reasons to doubt our authenticity or our sincerity.”
TheStreet Says: The real question here is why Netflix needed fake fans in the first place.
2. Geoghegan’s Gambit Backfires at HSBC
HSBC(HBC_) CEO Michael Geoghegan had his sights set on adding Chairman to his title, but threatening to quit if he didn’t get it turned out not to be the smartest move.
HSBC said two weeks ago that Chairman Stephen Green was stepping down from his role at the bank to become trade minister for the U.K. By Monday, reports were surfacing that Geoghegan had reacted poorly to the suggestion that he would not be promoted to chairman. Sources said Geoghegan had issued his threat to leave, but those same sources said he may not follow through on that threat.
To which we can only say: Geoghegan … duuuuuude. Was it really necessary to threaten to take your ball and go home on this one? And how could you not follow through after such an ultimatum? Sure enough, by Thursday The Guardian reported that the “brutal power struggle” cost Geoghegan his job.
Honestly, we never imagined that one could actually reach the level of CEO of a major, international lending financial firm and not know the basic rules of playing the promotion game. Seriously, Geoghegan — Rule 1 of C-Suite Fight Club? Don’t talk about C-Suite Fight Club.
TheStreet Says: Rule 2 of C-Suite Fight Club? Don’t talk about C-Suite Fight Club.
- KFC Doubles Down on Objectification
KFC offered further evidence this week that it has put its marketing and menu development duties into the capable hands of a tight-knit group of recently graduated Midwestern fraternity brothers. How else to explain the introduction of the KFC Famous Bowl (700 calories, 32 grams of fat) and the infamous Double Down sandwich (540 calories, 32 grams of fat)? And how else could you explain a marketing campaign that touts its fiery hot wings on fire hydrants and extinguishers in cities across the nation?
But this week, the bros of Kappa Fryd Chikn reached new heights (lows?) with their latest marketing initiative. The “Gluteus Ad Maximus” campaign flawlessly brings together the Double Down — the bun-less embodiment of our nation’s obesity epidemic — with the objectification of women. Indeed, what better place to advertise the Double Down than on the buttocks of comely college co-eds? That’s right, pay the girls to parade around campus in Double Down-branded sweatpants — and ladies only, please. Duuuude, Ka-ching! High five, broheim!
What’s in it for the ladies, or “brand ambassadors” as KFC is referring to them? How about $500 and, of course, they get to keep the sweatpants, which they’ll find will be the only things that fit should they sample the product on a regular basis.
“It’s hard to imagine anyone escaped the buzz of the Double Down earlier this year,” said John Cywinski, chief marketing and food innovation officer for KFC. “But in an effort to reach consumers coast-to-coast, and especially our key target of young men, we’ve established yet another advertising first — one that’s fitting of the Double Down’s head-turning history.”
Without question, since 2006 KFC has done everything it can to distance itself from its traditional bring-a-bucket-o’-chicken-home-to-the-family image. And you know what, that strategy has paid off. Corporate parent Yum! Brands(YUM_) is riding high these days.
But if KFC’s success rests on the premise “be edgy or else,” it’s only a matter of time before it finds that it’s burned its own biscuits, so to speak. McDonald’s went big with super-sized portions and ended up with the movie Super-Size Me to show for it. For both Yum! and KFC management not to consider that this strategy is leading it down the same path toward consumer backlash is nothing short of hubris.
TheStreet Says: We’re just jealous, because nobody wants to pay us $500 to look at our buns.
Source: thestreet.com
Tags: BP oil spill, Geoghegan's Gambit, Halliburton(HAL), HSBC, KFC, Mark Zuckerberg, Nalco(NLC), Netflix(NFLX), Yum! Brands(YUM)