I stepped on some toes with my last article on the viral power of user-generated Youtube movies in Brazil. Let me further elaborate my point, which is close to the remark Peter Hinssen made last year.
The GDP of Belgium is 378 billion US$. The GDP of Brazil is 1,838 trillion US$. Brazil has 18 times more habitants than Belgium. Thus; Brazil's GDP is 5 times bigger than Belgium's GDP, but Belgium's GDP per capita is 4 times higher than Brazil's GDP per capita.
But Belgium's productivity rate, which is one of the highest in the world , is stagnating, whereas Brazil's productivity rate is rising. Which is why Belgium needs 500.000 extra new jobs by 2020 to maintain it's status. By 2030, the number of Belgians will raise with 600.000 heads, but the number of people within the age-bracket of professional activity will lower with 200.000 heads at the same time. Read: we have to support 600.000 extra heads with 200.000 persons less. This makes the ambition to create 500.000 new jobs quite utopic, especially when you read this. Answer of the government: make sure that the participation rate raises; which is ridiculous of course, Belgium is already the country where the satisfaction of life is sinking quickest. Soon, when you ask 100.000 Belgians how satisfied they are with their life, you'll get a score lower than the average answer of 100.000 average chosen Brazilians. More in this scaring Belgian trend in a future post.
Back to the Belgium participation target of 70%. The Belgium government starts its mission and makes a campaign to attract new investors. Good beer, multilinguism (but no knowledge of Chinese, Indian, Russian Portuguese and low knowledge of Spanish) and notionele intrest; the usual sales pitch. But wait, Luc points us out that there's also the tesimonial of ... drums.... Google Belgium.
I watched they movie, attentively. Yet I'm still not sure if Erik Portier says that Google Belgium is "nearly employing 10 people", or "merely employing 10 people". Let's look further into the "only in Belgium" Google case. We need a reference point. Why not Brazil? Alexandre Hohagen founded Google Brazil just some months before Erik Portier started heading Google Belgium.
A first important parameter to look at: revenuew. I would love to compare the Q1 2008 revenue of Google Belgium with the revenue of Google Brazil in Q1 2008. In Brazil we can ask Mariana Sencini, I'm not sure if Erik Portier will enlighten us with an answer though. But Brazil is a developing country, with a massive contribution of mining, agriculture and petrol in it's GDP. So, one would expect Google Belgium's revenues to be at least 20% (Brazil's GDP is 5 times bigger than Belgium's GDP) of Google Brazil's GDP. Someone who dares to bet on this?
The second parameters is even ore interesting: revenue growth. I would be extremely interested in seeing what Google Brazil's revenue growth will be in 2008 compared to Google Belgium's revenue growth.
And then there's the second part of Google Belgium: the datacenter they are building in Belgium. We all know that 150 people will be working there, we also know that our government invested staggering amounts of money in all kind of (fiscal) advantages to attract this Goiogle datacenter to Mons; we just don't know how much of our tax money the governoment spend in doing so. Erik Portier claims Google invested 195 million EU in the datacenter in Mons. But what did that bring to the Belgian state? Another thing we don't know: what is the payoff of all these incentives? Google will pay some yearly state tax on the surface where the datacenter is build on, some VAT on (imported of course) material that they bought and social security on those 150 people working in the datacenter. I even wonder if Google owns the datacenter through a local Belgium company.
Can someone explain me what the net add of Google Belgium to our Belgian economy / society?
Now let's switch to Google Brazil.
First of all: Google had to come to Brazil to start selling. In Belgium advertisers can easily be catered from London or even the US. Not in the Brazil. The Brazilian tax system prevents this from happening. If Brazilian advertisers would buy advertising in the US, they would pay an ISS tax. ICMS is a state tax payable at all stages of a sale. The rate ranges from 7% to 25%, in Rio it's 18%. Admitted, the Brazilian tax system is a delight for someone who likes to analyse tax systems and a nightmare for people who hate it. But one thing it does good: it attracts the creation of added value in Brazil; going from manufacturing cars to selling advetising. Google Brazil (the sales part of it) counted end 2007 more than 150 FTEs. Based on the GDP ratio and Google Belgium have 10 employees, this figure should be only 50 FTEs. Did you notice that also Yahoo and Flickr have local offices in Sao Paulo?
Which brings me to the second part of Google Brazil: theR&D campus in Belo Horizonte. This R&D centre is one of Google's latest full-fledged engineering facilities outside the United States. They are a full peer of Google's other engineering facilities in California, New York, Washington, India, London, Zurich and Tokyo. India, London, Zurich and Tokyo... If Belgium would feature in that list, than that would be a good occasion for our government to broadcast a Google Testimonial. But Belgium isn't featured, and it never will. Belgium just bribed its way into 'buying' Google to plant its datacenter over here. No talented software engineers, no top programmers and visionary scientist like they have in Belo Horizonte. No sales house growing massively in a country where broadband penetration will further grow the coming decennium, where the GDP rate per capita will grow at a +5% rate per year.
I'm ashamed each time I see this Google Belgium testimonial. The only investors who will be incentivated by it will be the ones who hope to get an equally opportunistic treatment from our government. And meanwhile we Belgians will work harder and longer for (hopefully) the same money, while the cost of living is skyrocketing. Even Telenet, our cable provider has to raise 2,5% extra on its bills to be able to reach its 5% revenue growth target of 2008. Which means that the company only has a net organic growth of 2,5%, Flanders biggest Internet provider, a net organic growth of 2,5% !!
I have a huge list of companies which have an enormous growth potential in Brazil. Small ones and big ones. When I say growth potential, I mean growth potential over a period of more than 10 years. I don't have many of them in Belgium. Actually, each Belgian (Internet) entrepeneur is obliged to look immediately beyond Belgian borders. The Telenet example illustrates this: there is no growth in this country. If you have a web-agency and you wish to grow you either have to (1) take a chunck from your competitor(s) or (2) grow outside of Belgium.
This is why I completely scond Peter Hinssen's remark: Internet in België is Keuterboeren.
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Mar 11 2008
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Mar 11 2008
Colmeia, a (famous) Brazilian Blogger made a Youtube clip on the tones of "Rap da Moda", reuniting all famous Brazilian viral Youtube clubs. To foreigners, the many allusions of Colmeia won't ring a bell. If you look to the campaigns and clips he refers, you'll probably be left clueless, since they refer to local well-known events and are of course in... Portuguese. I looked them up for you:
1. Dengarelli: 3.200.000 visitors
2. Jeremais: 920.000 visitors
3. Truco valendo o Toba: 780.000 visitors
4. Silvio Santos e o bambú: 850.000 visitors
5. Menina Pastora: 220.000 visitors
6. Sanduiche-iche: 160.000 visitors
7. Solange Alazão: 260.000 visitors
8. Blogueiras na Playboy: 85.000 visitors
9. Confissões de um Emo: 3.500.000 visitors
10. Carol da Puc: 170.000 visitors
11. Fala Sonia (You Tube): 4.600.000 visitors
12. Ronaldinho - 3 bolas seguidas no travessão: 21.500.000 visitors
13. Lilian Wite Fibe rindo da notícia: 30.000 visitors
14. Jaspion e a dança do Siri: 471.000 visitors
15. Senador Suplicy canta Racionais: 190.000 visitors
16. Cacete de Agulha: 192.000 visitors
17. Arveres Somos Nozes: 3.600.000 visitor
18. Tropa de Elite: many versions
19. Trote da Telerj: 50.000 visitors
20. Carnaval in Rio com with Schwarzenegger: 450.000 visitors
21. Vai tomar no cu: 5.000.000 visitors
Even leaving out the many visitors of the many Tropa de Elite clips, this totals an amount of 46.228.000 visitors. The average length of a clip is 3,57 minutes. This totals to an amount of 128.411 24 days viewing time. Or 351,8 years that have been spent watching the above 20 clips (taking out Tropa de Elite). 352 years !!!
Oh, and I forgot my favorite one:
Tapa na Pantera: 1.850.000 visitors (funk version: 950.000 visitors).
We all think that Belgium is full of creativity when it comes to online marketing and viral campaigns. Don't we? Seriously now. Give me a list of Belgian campaigns and their success in number of visitors?
Remember all the buzz and fuzz on Paula? A virtual theaterproduction... Toneelhuis Antwerpen and Chipsvzw playing with our Belgian tax money; cara ! Luckily the management of Toneelhuis was changed shortly afterwards.
How many people actually watched to this 'production'clips? Paula reached 1.228 visitors on her topday with her "Ik geloof in de liefde".
1.228 ?! Despite the budget, all the work, the'massive' amount of Belgian blogging attention. Calculate the CPM cost of that...
It all boils down to the same old truth: fake versus real. Tapa na Panteira ou quoi...
update: Bart de Waele of Netlash calls this posting 'sour'. For me it was just an open invitation for him to refer to some famous Belgian viral campaigns and their reach and proof as thus that Belgian Internet is not ruled by "Keuterboerkes". -
Mar 11 2008
A buy advice for bot Brazilian Bonds and stocks? Both?
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Mar 11 2008
Not many will following me in my reasoning, but I believe Argentina is full of opportunities. Not in the last place because of the FX opportunity against the Euro (plot the chart on 10 years). Anybody who is into farming or any production industry with growth potential? I'll gladly drop by on our Latam trip in April.
And yet, I'm in doubt today. I have been thinking for the past weeks to buy Cresud shares on NASDAQ. Cresud is Argentina’s largest publicly traded agri-commodities firm. It is controlled by successful manager Eduardo Elsztain. Farming activities include producing crops, beef-cattle and milk. Cresud has been adding to its herd in recent quarters and now owns about 88,000 heads of cattle. Cattle prices are up more than 50% since 2002 and should rise further as emerging countries move towards diets richer in protein. Its principal crops include wheat, corn, soybean and sunflower. Asian demand for soybeans remains high because soy protein is central to human and livestock diets, again pushing prices higher. More importantly, Cresud is also the largest agricultural land owner in Argentina, with more than one million acres, and has significant commercial property interests in Buenos Aires. This makes the valuation rationale straightforward. The company owns more than $300m in commercial property and about $350m in farmland. Cresud also has $120m-$140m in cows, crops and cash. That translates into a value of approximately $750m or $770m against a market cap of $350m. And that’s without considering the potential of its farming activities. At 10,1 EU, the stock is really cheap. And I know, there's the Argentinian bureaucracy and tax, management skimming off profits,... But still I believe the fundaments of the stock make it a buy opportunity. Anybody an opinion? -
Mar 11 2008
This weekend we stumbled over Lugares Comunes. The New York Times translates the title of the movie into 'Common Places', they didn't understand a thing about the movie when that's their best shot. 'Common Ground' is what a translation from Spanish would sound like.
I've been a big fan of Adolfo Aristarain for many years now. If he would be born in another country he would probably be a sort of classic film-maker in the history of cinema. But he isn't, the man is Argentinian. Argentina intrigates me endlessly, especially now. The Pesos is on a historical low and in times when there's no hope, I believe in countries. Argentina is one of those examples. And the movie deals exactly with these questions:
How to change without loosing your ideals?
How to get old and feel as the first day of your youth?
How to keep loving the same woman during all your life?
How to start again when all the hopes are over?
Basic questions. But I don't hear them often (enough) when living in Belgium. Belgians have so many opinions, debates, thoughts,... We are so wise. But seldomly do I have a conversation where I see my friends asking themselves these questions in a broader perspective.
This film is poetry into a movie. One of the best scripts contents of the Latin American cinema. Aristarain shows one more time to be one of the best ever Argentinean directors. Below is my favorite scene. Take your time to enjoy it. -
Mar 9 2008
Jozef Ackermann, the Chief Executive Officer of Deutsche Bank said last Friday that the Latin American region is better placed than ever to face the current ecinomic turmoil.
"Strong economic fundaments, booming commodity prices, improved confidence and robust domestic demand improved the region's resilience tothe current uncertain global developments. 2008 will be an especially interesting year as we witness the extent of this resilience and the degree to which the region can continue to realize its potential".
How would such a paragraph on Belgium read?
"A very uncertain political context, negative trade balance, and a foreign debt of 287 billion EU, the third hightest foreign debt/GDP rate in Europe, after Italy and Greece, makes Belgian extremely vulnerable in the current economical crisis. In the current hausse of commodities, resource-low Belgium is extremely vulnerable. Add to that a inflation which will double in 2008 compared to 2007 (close to 4% coming from 1,7% in 2007) and a growth which will be in the most optimistic scenarios 1,9%. Surprisingly enough, the 2008 federal budget takes into account a creation of 46.600 new jobs in 2008. This is surprisingly high in the current economical context." -
Mar 8 2008
I'm not a fan of Flamengo, I'm a supporter of Botafogo. So, when you see this movie in which Toro smashes a 13 year-old ballkeeper against the floor out of sheer frustrations. Toro received red and Flamengo lost with 0-3 against Uruguayan Taça Libertadores. Toro tries to appologise on the Brazilian TV, but alas, behaving like this is worse than a crime on a football field !
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Mar 8 2008
These are crucial times for Brazil. I already posted that Brazil became the top emerging country and reported on the real estate growth potentials.
Until now Brazil is handling the impact of the subprime crisis with confidence and prudence. The Brazilian stocks remain healthy with a good growth potential throuygh 2008, and the consensus among economists in Brazil is that the country is in great shape to handle the turbulence ahead. Even the economists keeps writing on the decoupling scenario.
Brazil's international reserves have reached 188 billion US$, with a debt totalling 4 billion US$. Add to that the potentiual of Brazil's economy with the recent discovery of large oil fields, discovering Brazil's guarantee for auto-sufficiency in the need for energy in the medium term. Crucial, if you know that by 2030 the BRIC countries will consume more energy than the developing countries. 2030, that's in 20 years from here, I'll be 55 then. Imagine what it will be like to work and live in Belgium by then? The recent increase in jobs and the minimum wage is also expending credit, which still has a huge potential of growth compared to the US, Europe and even South Africa.
Most economists still predict that the Brazilian will grow nearly 5% in 2008 and 4,5% in 2008. The investment risk will be further reduced this year, which should attract even more amounts of foreign resources. Personally I follow the study of FGV which expects a growth of 4,7% this year, which will still be more than 3 times the growth of Belgium in 2008. And remember the impact of the devaluation of the US dollar on trade and this growth of 4,7% ! -
Mar 8 2008
Jonah Lehrer never replied on my comments on his somewhat retarted article on carbon emissions and the Amazon. Too bad, it seems that we all forgot that part in Al Gore's movie where he pulls out a chart which shows that the US is responsible for more than 70% of the carbon emissions. Africa (the continent) only accounts for 8% and Latin America (the continent) only 11%. Again, until the moment the US doesn't get (1) its pace of carbon emission growth lower than that in Latin America and (2) in a second phase gets its nominal carbon emission per capita below the carbon emission per capita in Brazil, there's no valid argument why any North American should even talk about subsidies to use to Amazon to offset the carbon abuse in the US.
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Mar 7 2008
I've been a loyal fan of Sidestep and Kayak over the last years. However, I've neverbeen truly satisfied with either of them. True, Sidestep will learn you that the cheapest flight you can find from Brussels to Rio de Janeiro is a TAP flight at 1.040 US$ which brings you from Brussels to Rio in 14 hours. Iberia offers you the deal for 1.055 US$ with 30 minutes more per leg of your trip.
But on transatlantic flights I need much more information than just the flights and the actual hours:
1. Leg room. Flying a Boeing 747 is a pain, flying an Airbus 340-300 or 340-600 is a breeze when it comes to seating comfort.
2. Security wait time: Heathrow: never again. Miami: never ever again. Frankfurt and Lisbon: comme si comme ca. Munchen and Zurich: heaven.
3. Aircraft age. Nothing worse than flying the old American cigar boxes. Quality of planes of American carriers like Delta and American is horrifying.
4. On Time performance.
5. Connection times.
6. Number of stops.
7. Flight duration.
8. Lost luggage track.
9. Hostorical airplane passenger loads. Extremely important for me. Air France and British Airways to Rio are always full.
10. Aircraft type.
11...
Imagine how glad I was when I learned that Insidetrip.com went in bèta. The site puts the consumer in control of their travel experience through an innovative search by "TripQuality" ratings.
I tried the service for two routes that I know very well, because I've flewn every possible carrier catering the route: Brussels to Johannesburg and Brussels to Rio de Janeiro.
1. Brussels to Rio de Janeiro:
The winner was the TAP flight with Tripquality score of 76%.
The analysis is right, probably the score fell below 80% because of the Lisbon airport. However, British Airways, Air France, TAM, Iberia all scored substantially lower. I can tell you why.
2. Brussels to Johannesburg:
This is an interesting one. Most people that i know fly South African over Heathrow or Frankfurt, or take Lufthansa over Frankfurt.
The last years I've developed a keen preference to fly Lufthansa over Munich or even better, fly Swissair over Zurich. Lufthansa flies an airbus from Munich and so does Swissair. And Munich and Zurich are one of the most convenient airports in Europe. Moreover, the trip with the Airbus 340-300 from Swissair is excellent; their fleet is maximum 5 years old.
The strange thing on this route is though that I could never find a Swisair on the return leg from Johannesburg back to Europe. This always happens to be a Lufthansa flight to Munich (Swissair and Lufthansa have codeshare). If it were not for that, this Swissair flight would score without doubt +90%.
Try it out for yourself.
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