Economist 6/18/14

  1. GoDaddy, which with some 4,000 employees and 57m web domains under its management, is the world’s biggest web-hosting firm. It filed $100m initial public offering (IPO) it filed with the Securities and Exchange Commission (SEC) last week.GoDaddy, based in Scottsdale, Arizona, and founded an internet eternity ago in 1997, had filed for an IPO before, in 2006. But the offering was withdrawn, and in 2011 Bob Parsons, the firm’s founder, sold just under 70% of GoDaddy to a trio of private-equity investors, Kohlberg Kravis Roberts, Silver Lake and Technology Crossover Ventures.The bad news is that for a firm so long in the tooth, it has only just cracked $1 billion in annual sales, and it is losing money at an alarming rate. In 2012 GoDaddy’s net loss was $279m; last year it lost $200m.The biggest challenge for GoDaddy’s IPO, however, may be the firm’s less-than-candid accounting. But GoDaddy’s definition of EBITDA is far from traditional. It also adds back “share-based or unit-based compensation expense, change in deferred revenue.This controversial approachenabled it to claim a pseudo-profit of $199m last year
  2. Umpqua Bank has 364 branches spread across Washington, Oregon, California, Nevada and Idaho, and it intends to add more. This sort of expansion runs contrary to accepted wisdom, which holds that cheap competition from internet banking is killing off the physical sort. Umpqua, in contrast, is trying to create outlets that neighbourhoods will welcome and people will want to visit.Tellers, for example, hand out a chocolate with each cash withdrawal. It goes to great lengths to cut the time and form-filling involved in obtaining a mortgage.Umpqua’s most unusual trait, however, may be its growth. In the early 1990s, it had only six branches.The bank’s appeal also allows it to pay a little less interest than the norm on deposits, and charge a bit more on loans, giving it high lending margins. Barclays reckons that by the end of next year, its return on equity will be 14%, far above the average.
  3. A recent global study published in the Lancet, a London-based medical journal, suggests that 70% of adult South African women and nearly 40% of men are overweight or obese. Even among children, a quarter of girls and a fifth of boys are too fat, and thus at greater risk of ill-health, from diabetes to heart disease.Most South Africans sound comfortable with their waistlines.Indeed, 88% of 25,500 South Africans interviewed indicated that the body image they deemed ideal was, in fact, fat.
  4. On June 15th Medtronic, a giant American manufacturer of stents, pacemakers and other implanted gizmos, announced a $43 billion deal to buy Covidien, a competitor domiciled in Ireland.Like Pfizer’s bid, the deal would let Medtronic use cash housed abroad and take advantage of lower tax rates on the other side of the Atlantic.And Medtronic has tried to look beyond traditional markets for growth. In 2012the company shelled out $816m to buy Kanghui, a large Chinese maker of fake hips, knees and the like.
  5. Vietnam was taken aback in early May when China parked an oil rig on its doorstep. The behemoth, which cost $1 billion, lies 17 nautical miles (32 km) from the Paracel islands,Now, the prospect of a quiet resolution looks increasingly remote.The prime minister, Nguyen Tan Dung, said on May 21st that Vietnam may, like the Philippines, challenge China’s territorial claims in the South China Sea in an international court.he betting is that China will remove its rig by mid-August, as planned. But the thornier issue of who owns what in the South China Sea—which the Vietnamese call the East Sea—is unlikely to be settled so soon.

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