Explaining Southern California's economy

Super Bowl ads: Great for Los Angeles, but it's still all about TV

The L.A. Times' Meg James has a great piece today about how a kind of advertising-tech axis is developing in Los Angeles, combining our resurgent ad agencies and all the new tech firms that have sprung up on the Westside and that are being called "Silicon Beach." (There was a Silicon Beach of sorts back during the 1990s dotcom boom, so this isn't so much a completely new thing as a reboot.)

Nowhere can this be seen more clearly than in the much-anticipated ads for the Super Bowl. Here's some salient language:

More than 110 million people are expected to watch the Super Bowl on TV, making it the biggest advertising event of the year. The pressure to perform is intense. Broadcaster NBC has charged a record $3.5 million for each 30-second spot. The commercials, which can cost an additional $2 million to make, will be analyzed and replayed as much as the action on the field. More than 20 of the high-profile commercials, including those promoting Hollywood films, were created locally.

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January jobs report: Even better than December

A jobs sign hangs above the entrance to

KAREN BLEIER/AFP/Getty Images

A jobs sign hangs above the entrance to the US Chamber of Commerce building in Washington, DC.

That sound you heard emanating from Washington this morning might just be the great lurching creak of the U.S. economy finally turning the corner. While we were all transfixed by Facebook's IPO filing, the number crunchers at the Bureau of Labor Statistics (BLS) discovered that in January, the U.S. economy added 243,000 jobs — a very significant improvement over the really quite good December number of 200,000. This was enough to shave another 0.2 pecent off the unemployment rate, bringing it down to 8.3 percent from December's 8.5 percent.

Oh, and about the December numbers: They were even better than initially reported. The BLS revised them, as it does for the previous month with each new month, to 203,000 from 200,000. Is it right to get excited about 3,000 new jobs? Given how intractable the unemployment crisis has been, you'd have to say "Heck yeah!"

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How to save America: Build better cities

Expo Park/USC Station

Courtesy of the Los Angeles County Metropolitan Transportation Authority

Expo Park/USC Station.

Felix Salmon has an interesting post today about how China has managed to keep it together depsite very trying economic times. The bottom line? Healthy investment in urban infrastructure. Which has fueled a boom in the creation of service-related jobs — just what you want if you need to think long-term about moving your economy away from agriculture and manufacturing. 

Cities, therefore, are good. Of course, China can do fine with a mix of agricultural and manufacturing labor at its core, with services a distant dream. The U.S., on the other hand, needs to push for service employment, as that's where the high incomes are. And we need high-income jobs to define America's future. Felix offers his formulation for how to get them:

How do you create service-industry jobs? By investing in cities and inter-city infrastructure like smart grids and high-speed rail. Services flourish where people are close together and can interact easily with the maximum number of people. If we want to create jobs in America, we should look to services, rather than the manufacturing sector. And while it’s hard to create those jobs directly, you can definitely try to do it indirectly, by building the platforms on which those jobs are built. They’re called cities. And America is, sadly, very bad at keeping its cities modern and flourishing. 1950s-era suburbia won’t cut it any more. But who in government is going to embrace our urban future?

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Facebook IPO: Three important things from the SEC filing

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Facebook founder and CEO Mark Zuckerberg speaks during a news conference at Facebook headquarters on October 6, 2010 in Palo Alto, California.

Facebook filed for an IPO with the SEC late today. I've had a chance to review the S1 document, although I didn't really dig deeply into it. That can come later. The CliffNotes version is that there aren't any huge surprises here, as far as Facebook's financials go. There are over 800 million users. The business is all about advertising, the source of almost all of Facebook's revenue. 

So what are the little surprises?

1. Facebook's future hinges on mobile. As plenty of folks have pointed out, pretty much everybody who is going to use Facebook already does — on a computer. This is where the money comes from: advertisers want to reach those people. On mobile devices, by contrast, Facebook doesn't do ads yet. There could be growth here. But mobile could also steal from Facebook's computer-bound business. From the S1:

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Facebook files for IPO, Zuckerberg outlines his vision for 'rewiring' us

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Facebook founder and CEO Mark Zuckerberg speaks during a news conference at Facebook headquarters on October 6, 2010 in Palo Alto, California.

Facebook waited until the end of the business day in New York to file its S1 papers with the Securities and Exchange Commission — the prelude to what could be the biggest tech IPO of all time later this year. 

But who cares about the money? For Facebook CEO Mark Zuckerberg, who's worth about $25 billion, it's all about togetherness. This is from his letter that accompanied the filing (thanks to Nicholas Carlson and Business Insider for the quick breakdown):

We hope to strengthen how people relate to each other.

Even if our mission sounds big, it starts small — with the relationship between two people.

Personal relationships are the fundamental unit of our society. Relationships are how we discover new ideas, understand our world and ultimately derive long-term happiness.

At Facebook, we build tools to help people connect with the people they want and share what they want, and by doing this we are extending people’s capacity to build and maintain relationships.

People sharing more — even if just with their close friends or families — creates a more open culture and leads to a better understanding of the lives and perspectives of others. We believe that this creates a greater number of stronger relationships between people, and that it helps people get exposed to a greater number of diverse perspectives.

By helping people form these connections, we hope to rewire the way people spread and consume information. We think the world’s information infrastructure should resemble the social graph — a network built from the bottom up or peer-to-peer, rather than the monolithic, top-down structure that has existed to date. We also believe that giving people control over what they share is a fundamental principle of this rewiring.

We have already helped more than 800 million people map out more than 100 billion connections so far, and our goal is to help this rewiring accelerate.

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