Economist 8/15/14

  1. Geothermal is a minnow among power sources. America has the world’s highest installed capacity of geothermal generating plants—3.4 gigawatts’ worth at last count (see first chart)—but they generate only 0.4% of its electricity. New “enhanced geothermal systems” (EGS), however, look set to make geothermal a bigger contributor—and potentially as controversial as shale.The industry may dislike the comparison, but EGS is geothermal fracking. Millions of gallons of water and chemicals are injected into mostly vertical wells at relatively high pressure, and the combination of cold-meets-hot, pressure and chemistry shears the deep, hot rock. This creates new “fracture networks” through which water can be pumped, heated and sent back to the surface to generate power.e trouble is that successful existing geothermal plants do not need EGS, and for many failed wells it is uneconomic to introduce it. EGS can trigger earthquakes. Most are minuscule but an early project on a seismic fault in Basel, Switzerland was scrapped after several not-so-small quakes.
  2. On August 10th Andreessen Horowitz, a venture-capital firm, said it was investing $50m in BuzzFeed, reportedly valuing the eight-year-old website at $850m, half the market value of the New York Times. According to comScore, a research firm,BuzzFeed had around 75m unique visitors in June—more than the websites of the Times and other bigdailies. It makes money through “sponsored content”—which often looks remarkably and deliberately like a normal article, but is commissioned by advertisers.
  3. On August 8th Malaysia’s sovereign-wealth fund offered to buy the 30% of Malaysian Airlines shares in private hands in order to restructure the airline. The root cause of Malaysia’s troubles should elicit far less pity. Like many national carriers, it was losing money as a matter of course.On August 8th the country’s sovereign-wealth fund offered to buy the 30% of shares in private hands in order to restructure the airline. The root cause of Malaysia’s troubles should elicit far less pity. Like many national carriers, it was losing money as a matter of course.The exceptions are few. The thriving airlines of Singapore and Ethiopia, and the Gulf carriers, Etihad, Emirates and Qatar Airways, all benefited from government money but have been allowed to operate as commercial enterprises with minimal interference.Poor management, overstaffing and strong unions have left airlines struggling in a changing business and with little hope of cost-cutting or streamlining.
  4. LINKEDIN is not the only game in town. With 60m members, Viadeo is the world’s second-biggest professional social network. It is strong in its home country, France, and in China. Xing of Germany, the third largest with 14m members, guards the gate of the German-speaking world. Viadeo is the biggest professional network by membership in France and Francophone Africa, has a significant business in Russia and, most important, is in first place in China. It bought Tianji, a Chinese business-networking site, in 2008 and has built its membership to 20m.The big problem for Viadeo is making money outside France, which accounts for 95% of its turnover—€31m ($42m) in 2013. Viadeo has yet to turn an operating profit (though it claims it is profitable in France).Viadeo is also under threat from its rivals. Profitable Xing, which had pulled back from foreign ventures, got a new boss in 2012, who is going after business recruitment. LinkedIn, meanwhile, is encroaching on two markets that Viadeo hoped it had sewn up.
  5. LinkedIn is more than just a means for aspiring professionals to make friends and influence people. It has changed the market for their labour—how they find jobs and how employers find them. Recruiters are LinkedIn’s main source of revenue. They pay for licences to trawl for likely job candidates and to e-mail them about vacancies, as well as for placing advertisements on the site. This business—called “talent solutions”—accounts for about three-fifths of sales. LinkedIn’s main benefit to recruiters has been to make it easier to identify people who are not looking for a new job, but who might move if the right offer came along. These “passive” jobseekers, says Dan Shapero, head of sales in the firm’s talent-solutions business, make up perhaps 60% of the membership (active jobseekers make up 25%; those who will not budge for any money make up the rest.  For the top jobs, LinkedIn is still too public. Denizens of the executive suites often expect a discreet tap on the shoulder from a bespoke headhunting firm. That is why Korn/Ferry, one of the biggest headhunting firms, reported record revenues and profits last year. Even so, LinkedIn is working its way up the greasy pole. Since early June the number of jobs on its site has jumped from 350,000 to about 1m. As well as openings for software engineers at IBM can be found jobs as delivery drivers for Pizza Hut or on the tills at Home Depot—which until now no one would have expected to find there. This is because LinkedIn has added jobs from employers’ websites or human-resources databases to its existing paid advertisements.
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