Knowledge@wharton

In 2001 the merger between America Online (AOL) and Time Warner was accompanied by lofty hopes of synergies between new-world Internet prowess and old-world content delivery. But those hopes were short-lived. Now with a $30 billion deal to take control of NBC Universal (NBCU) Philadelphia-based Comcast is looking to integrate its cable pipes with many of the channels it distributes. But while much of the initial focus on the Comcast-NBCU marriage has revolved around cable programming assets the combined company’s digital properties may ultimately become more important for its long-term survival say experts at Wharton. See acast.com/privacy for privacy and opt-out information.

More than 100 world leaders gathered in Copenhagen on December 7 for a two-week summit meeting whose ambitious aim is to renew the Kyoto protocol on climate change. The issues being discussed include reducing emissions of green-house gases and setting a price for carbon among others. What are the likely business implications of these issues? What new challenges and opportunities will they create during the coming months? Knowledge at Wharton discussed these topics with Wharton legal studies and business ethics professor Eric Orts; Howard Kunreuther Wharton professor of decision sciences and public policy; and Erwann O. Michel-Kerjan managing director of the Wharton Risk Management and Decision Processes Center. An edited transcript of the conversation follows. See acast.com/privacy for privacy and opt-out information.

When Dubai World announced late in November that it wanted a six-month delay on payments on $26 billion in debt the financial markets were thrown for a loop. The Dow Jones Industrial Average fell 155 points or 1.5% European stocks dropped and oil prices plunged. The Dubai story is still unfolding -- the emirate’s stock exchange fell for the third consecutive day on December 9 after Moody’s downgraded the ratings of six government-linked companies. Though some investors believe Dubai does not provoke as much fear as other corporate collapses over the past couple of years Wharton professors point out that the world economy could face serious problems if similar financial troubles spread to European economies such as Greece. See acast.com/privacy for privacy and opt-out information.

The global financial meltdown has been marked by shortages -- of oversight due diligence moral fortitude and common sense. Today approximately two years after the housing bubble burst and world stock markets collapsed possibly the only surplus left from the crisis is that of finger pointing and blame. A panel discussion earlier this week titled ”Responsibility and the Financial Crisis of 2008 ” brought together Wharton and University of Pennsylvania faculty to discuss the causes of the crisis and more importantly to answer the question ”Where do we go from here?” See acast.com/privacy for privacy and opt-out information.

See acast.com/privacy for privacy and opt-out information.

If the past month is any indicator acquisitions are not only thawing but heating up. In October Comcast made a bid to merge its operations with NBC Universal to create a cable programming giant. In early November Kraft Foods announced a $16.5 billion bid for U.K.-based chocolate maker Cadbury -- also being sought by confectioners Hershey and Ferrero. The activity spans several sectors including technology with Hewlett Packard’s agreement to purchase 3Com for $2.7 billion and Google’s $750 million acquisition of AdMob. What’s behind this shopping spree and is the trend likely to continue? Knowledge at Wharton spoke with Wharton management professor Larry Hrebiniak and finance professor Pavel Savor about M&A strategy in a post-recession environment. See acast.com/privacy for privacy and opt-out information.

The current downturn has left many companies scrambling to manage workplace issues -- ranging from how to avoid a brain drain to how they can provide better value to customers and clients. Employees for their part face the challenges that arise from working in a leaner organization that demands increased productivity with fewer resources. Knowledge at Wharton talked about these issues with Peter Cappelli director of Wharton’s Center for Human Resources and Philip Miscimarra a partner in the labor and employment practice in the Chicago office of law firm Morgan Lewis & Bockius and managing director of the Center for Human Resources research advisory group. See acast.com/privacy for privacy and opt-out information.

Marc Rowan founding partner of Apollo Management one of the world’s largest private equity investment firms makes it sound simple: Stick to the fundamentals -- that is buy a good business at a low price -- and you ultimately will see returns. Of course identifying those businesses is the challenge. Rowan who was in mergers and acquisitions at Drexel Burnham Lambert before starting Apollo spoke with Knowledge at Wharton about how Apollo makes investment decisions the challenges private equity faces in the coming months the recent insider trading scandals and what he looks for in new hires. See acast.com/privacy for privacy and opt-out information.

A key question that all would-be entrepreneurs face is finding the business opportunity that is right for them. Should the new startup focus on introducing a new product or service based on an unmet need? Should the venture select an existing product or service from one market and offer it in another where it may not be available? Or should the firm bank on a tried and tested formula that has worked elsewhere such as a franchise operation? In the first of a series of podcasts for the Wharton-CERT Business Plan Competition Raffi Amit a professor of management at Wharton discusses these questions and more with Knowledge at Wharton. In the process he offers insights into how entrepreneurs can identify new business opportunities and evaluate their potential and their risks. See acast.com/privacy for privacy and opt-out information.

Last week the Obama administration’s ”pay czar ” Kenneth Feinberg announced that the government will impose caps on compensation for the 25 highest-paid executives at seven companies that received ”exceptional assistance” through the Troubled Asset Relief Program -- including American International Group (AIG) Bank of America Citigroup Chrysler Chrysler Financial General Motors and GMAC. Under the new regulations salaries will be reduced by an average of 90% and total compensation (including bonuses and stock options) will be lowered by 50%. Knowledge at Wharton spoke with Wharton accounting professor Wayne R. Guay and then with finance professor Alex Edmans about what these changes could mean for Wall Street company shareholders and taxpayers. See acast.com/privacy for privacy and opt-out information.

In a year when DVD sales are falling and studios are facing major shakeups in their executive ranks the movie industry has at least one success story to cheer about: Netflix. Despite the recession the Los Gatos Calif.-based company continues to thrive and is now in a race to transition to a business model focused on streaming content online while continuing to exploit its current model based on physical DVD distribution. According to Wharton faculty Netflix has managed this balancing act deftly so far but growing competition in digital distribution means that it may not have an advantage for long. See acast.com/privacy for privacy and opt-out information.

James Riady is the CEO of Lippo Group one of Indonesia’s largest conglomerates with annual revenues of some $3 billion. The Group among the most active property developers in Southeast Asia has expanded into China and Hong Kong and plans to invest $10 billion over the next five years in the Asia Pacific region. It also has interests in media telecommunications retail and health care. Fifteen years ago Riady was responsible for the establishment of Universitas Pelita Harapan in Indonesia and he has a strong interest in the social impact of business. During an interview with Knowledge at Wharton Riady explained the lessons he has learned over the years from successes and failures in business and politics. See acast.com/privacy for privacy and opt-out information.

Microsoft dipped its toe into retail waters this month by opening its first company store as a way to showcase the latest and greatest in PCs Zunes and Xbox consoles. But computer companies aren’t the only manufacturers moving into the retail space says Wharton marketing professor David Bell. Whether it’s handbags from Coach shoes from Nike or suits from Ralph Lauren consumers increasingly have the choice to buy products either at stores operated by manufacturers or from independent retailers. Bell recently co-authored a research paper looking into competition between company stores and independent retailers in the same market. See acast.com/privacy for privacy and opt-out information.

Five years ago C.K. Prahalad published a book titled The Fortune at the Bottom of the Pyramid in which he argues that multinational companies not only can make money selling to the world’s poorest but also that undertaking such efforts is necessary as a way to close the growing gap between rich and poor countries. Key to his argument for targeting the world’s poorest is the sheer size of that market -- an estimated four billion people. How has Prahalad’s book -- a revised fifth-anniversary edition of which has just been published -- affected the behavior of companies and the well-being of consumers in the years since its publication? Knowledge at Wharton checked in with the author for an update including examples of specific companies that are implementing Bottom of the Pyramid strategies. See acast.com/privacy for privacy and opt-out information.

Philadelphia-based Comcast the largest cable company in the U.S. has made a bid to merge its operations with NBC Universal -- home to the NBC television network Universal Studios and popular cable channels including Bravo USA CNBC and MSNBC. If the deal goes through it would create a programming giant allowing Comcast to produce and distribute content throughout its cable networks and on web sites such as Hulu which is partially owned by NBC Universal. Steve Ennen managing director of the Wharton Interactive Media Initiative spoke with Wharton marketing professor Pete Fader and Ken Shropshire professor of legal studies and business ethics about what the deal could mean for content distribution and for consumers. See acast.com/privacy for privacy and opt-out information.

Federal Communications Commission chairman Julius Genachowski in late September outlined principles of net neutrality to promote more open use of the Internet. What will these developments mean for business in the U.S. and other parts of the world? In a new interview format called Five Questions Rajesh Jain CEO of India-based Netcore asks Wharton legal studies and business ethics professor Kevin Werbach about net neutrality. In the second part of the interview roles are reversed and Werbach poses five questions to Jain about opportunities in the Indian mobile market which is going through explosive growth. See acast.com/privacy for privacy and opt-out information.

Unlike micro lending -- the better-known side of micro finance -- micro insurance has been a hard sell among the world’s poor. The reasons why include a lack of understanding of how insurance products work a general reticence on the part of poor populations to part with their meager financial resources badly designed products and a shortage of localized risk management knowledge among providers. What needs to happen for micro insurance to prove that it can be both socially beneficial and economically viable? See acast.com/privacy for privacy and opt-out information.

According to some estimates high-frequency trading by investment banks hedge funds and other players accounts for 60% to 70% of all trades in U.S. stocks explaining the enormous increase in trading volume over the past few years. But critics of the practice worry that those profits are coming out of ordinary investors’ pockets. Defenders on the other hand say high-frequency trading improves market liquidity helping to insure there is always a buyer or seller available when one wants to trade. Wharton faculty and others weigh in. See acast.com/privacy for privacy and opt-out information.

On September 14 President Barack Obama gave a speech in New York to mark the anniversary of the Lehman Brothers failure. It was a year ago when -- during the course of a single jaw-dropping week -- the investment bank declared bankruptcy; Bank of America took over Merrill Lynch; and the U.S. federal government bailed out American International Group. How has Wall Street changed during the past year and what will these changes mean for investors? What new financial regulations have been discussed and how much longer will it take the U.S. economy to emerge from the woods? Knowledge at Wharton posed these and other questions to finance professors Jeremy Siegel and Richard Herring. See acast.com/privacy for privacy and opt-out information.

For cable TV companies in the U.S. August 28 was a day to celebrate. Ending several years of regulatory battles a ruling by the U.S. Court of Appeals came down in favor of Philadelphia-based Comcast which sought to overturn the Federal Communications Commission’s contentious 30% market share limit on cable TV operators. Not everyone is happy about the ruling fearing it will lead to cable monopolies. In contrast Peter S. Fader professor of marketing and co-director of the Wharton Interactive Media Initiative sees this as a ”golden age” for the industry and consumers alike. Fader spoke with Knowledge at Wharton about why the recent ruling is likely to make the landscape more not less competitive. See acast.com/privacy for privacy and opt-out information.