Also: Fed hike, Nord Stream 2, and Rogan beats Young.
Good morning.
Count me among those who thought Facebook’s Meta rebrand was mainly an effort by the embattled tech company to change the subject. But a piece by Bernhard Warner for the upcoming issue of Fortune magazine shows there’s something bigger here. Proof point one was last year’s IPO of the gaming platform Roblox at an astounding valuation of $41 billion. Proof point two was Microsoft’s purchase of Activision Blizzard for an even more eye-popping $68.7 billion. Roblox founder David Baszucki insists it’s not just about gaming. “This is bigger than play. This gets into learning and working.” The folks at Goldman Sachs seem to agree, calling it “an $8 trillion market opportunity.” With numbers like that being thrown around, you should definitely read Warner’s story, here.
And if you aren’t into people who live in computers, how about computers embedded in people? Jeremy Kahn and Jonathan Vanian take a close look at Elon Musk’s Neuralink, a secretive startup dedicated to developing devices that can be implanted in the human brain and convert thoughts into action. You can read their piece on the “Brain Computer Interface” here.
Separately, I spent a fascinating hour yesterday with a group of CFOs exploring how the top finance job has changed in recent years. I reported last week on our new CEO survey showing CFOs have become the executive CEOs think are most important to their success. Yesterday’s session added texture to that point. Machine learning and advanced analytics has made the finance job less about documenting the past and more about predicting the future. That, in turn, has made CFOs into invaluable strategic partners to their bosses.
H&R Block CEO Jeff Jones was on hand to talk about how his CFO, Tony Bowen (who was also on the Zoom call, wearing a Kansas City Chiefs jersey) has become a key strategic partner in the 67-year-old company’s transformation.
When Jones took over four years ago, the company was making money but had “stopped growing. We were losing clients. We were generating a lot of free cash flow, so I wouldn’t call it a turnaround per se, but we were losing relevance.” With Tony at his side, Jones went to shareholders and let them know the company was going to reduce profit margins in order to invest in digitizing and diversifying. “There are many things we could do right now to improve the stock price. But when you are really focused on a multi-year repositioning of the business, you know you are going to be in zones that not all investors are going to like.” The partnership, both agree, was critical in making that move.
If you are interested in learning more about the CFO Collaborative, which is run in partnership with Workday, go here. Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
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Fed hike
The Federal Reserve will begin hiking interest rates in March, Chair Jerome Powell said yesterday. Powell noted that inflation is getting "slightly worse" and claimed "there is quite a bit of room to raise interest rates without threatening the labor market." Fortune
Nord Stream 2
The U.S. State Department says the Russia-to-Germany Nord Stream 2 natural-gas pipeline will not open for business if Russia invades Ukraine. It's not yet clear whether Berlin is in line with this, as the German government has engaged in some epic fence-sitting over the issue—opinion is divided within the ruling coalition there, with the Green Foreign Minister Annalena Baerbock opposing Nord Stream 2, and the social-democrat Chancellor Olaf Scholz (from the same party as former chancellor and current Nord Stream 2 chairman Gerhard Schröder) being far more chilled about the project. Deutsche Welle
Netflix bounce
Netflix shares, which have taken quite the battering recently, jumped 4% on news that Bill Ackman's Pershing Square Capital Management had taken a big stake. Fortune
Rogan beats Young
Spotify has removed Neil Young's music from its platform, per the ultimatum he issued over Spotify's publication of Joe Rogan's podcast. Young was incensed at Rogan's spreading of vaccine misinformation, and Spotify refused to stop carrying its star pundit's material. "We regret Neil’s decision to remove his music from Spotify, but hope to welcome him back soon," Spotify said. (Side note: This isn't the first time Young has yanked his catalog from streaming services; the last time was about their inferior audio quality.) Wall Street Journal
Maintaining trust in DEI commitments A recent survey from Deloitte revealed 80% of workers trust their organization to reach diversity, equity, and inclusion (DEI) goals, and even more believe their leaders are putting their words into action. But how can organizations maintain that trust and collaborate with their workers on DEI initiatives? Explore the framework
Tesla robots
Elon Musk says Tesla's Optimus robots could be in production by the end of next year, ready to solve labor shortages. Musk thinks the humanoid robots have "the potential to be more significant than the vehicle business over time." Fortune
Anti-antiwork
The popular r/antiwork Reddit forum—which is actually more about opposing excessive and pointless labor rather than the concept of work as such—has temporarily shut down, following a combative interview between Fox News's Jesse Watters and forum moderator Doreen Ford. After the interview, the forum was subjected to a form of attack known as "brigading" that apparently required a cleanup. Fortune
Long COVID
Researchers are learning more about what (apart from catching COVID) puts people at risk of long COVID. It seems existing type 2 diabetes may be a factor, along with the presence of certain specific autoantibodies that cause the immune system to attack tissue or organs. Fortune
Inflation statistics
The British food writer and anti-poverty campaigner Jack Monroe has scored a remarkable victory, prompting the U.K.'s Office of National Statistics to revise the way it calculates the cost of living, in recognition that "everyone has their own personal inflation rate." Citing the late fantasy author (and keen socioeconomic observer) Terry Pratchett, Monroe had pointed out that poorer people are hit much harder by rises in the price for cheaper food. Guardian
This edition of CEO Daily was edited by David Meyer.
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