This is the Financial Almanac for Thursday, February 17, 2011.
On this day in 1933, Newsweek magazine was published for the first time. Until 1937, the magazine’s name was spelled with a hyphen between the words “news” and “week.” Its original owners, including founder Thomas J. C. Martyn and Paul Mellon, son of banker and businessman Andrew Mellon, launched the magazine with startup capital of $2.5M. It was purchased in 1961 by the Washington Post Company. For the better part of the last decade, the magazine has struggled along with all print media to keep pace with online news sources. Beginning in 2008, it changed its strategy from striving for a general audience to targeting an affluent readership with more appeal to advertisers. It discouraged renewals and doubled its subscription prices, thereby reducing its subscriber base from 3.2M to just 1.5M now.
Revenues continued falling, however, and the Washington Post sold the magazine to harman/kardon audio company co-founder Sidney Harman in August 2010 for a small amount of cash and the assumption of liabilities. Just three months later, Harman merged Newsweek with online publication The Daily Beast, owned by IAC, which also owns Ask.com, Citysearch, and Match.com. Tina Brown, who serves as editor-in-chief of both Newsweek and The Daily Beast, wrote that the magazine would “add the versatility of being able to develop ideas and investigations that require a different narrative pace suited to the medium of print” while the online site’s “thriving frontline” would “raise the profile of the magazine’s bylines and quicken the pace of a great magazine’s revival.”
On this day in 1972, all-time sales of the Volkswagen Beetle surpassed those of the Ford Model T. Volkswagen made more than 21.5M of the iconic cars between 1938 and 2003. No other single vehicle design platform has been produced in as much quantity as the air-cooled, rear-engined, rear-wheel drive model Beetle. Tracing its roots to 1930s Nazi Germany, Volkswagen barely survived Germany’s defeat in World War II and owes its existence today largely to British Army Major Ivan Hirst, who protected the firm as it eased into Germany’s economic recovery from which it built upon the Beetle’s success. Today, the company is the largest automaker in Europe and the third-largest in the world after Toyota and General Motors, with a global market share of 11 percent and 6.3M vehicles sold last year.
The New York Times editorialized four years ago that many of the American car companies’ “difficulties stem from some bad decisions by management and some uninspired car designs. Chrysler lost $1.5B last year and Ford lost $12.7B, the most in more than a century in business, while Toyota reported record profits and sales.” Daimler sold Chrysler to Cerberus Capital three months later, then Chrysler declared bankruptcy in the global financial crisis and emerged from Chapter 11 in June 2009 to enter a partnership with Italian automaker Fiat.
As Chrysler exited Chapter 11 in June 2009, General Motors entered it. One year later, it emerged from Chapter 11 and was then re-listed on the New York Stock Exchange and the Toronto Stock Exchange in November 2010. Following the troubles of Chrysler and GM, Ford currently has the most dealerships in the United States at 3,131.
The world’s largest auto markets by volume in 2010 were China, the United States, Japan, Brazil, and Germany. Worldwide, the auto industry sold 72M units in 2010. That figure is on its way to 100M in 2015, according to J.D. Power and Associates.
From Sano, Japan, I’m Jason Kelly saying observe the world, find what makes it better, and profit from your discoveries.
Have a great day!
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