Google has become one of the world’s largest M&A powerhouse. Ever since its co-founder Larry Page took the position as its CEO, Google has overseen more than 120 deals, doubling M&A activity in the past three years. The breadth of acquisitions and mergers is grandeur–from Robotics to cloud services, biotechnology to the Internet of Things, Google has been taking an extremely progressive move by expanding its portfolio in all areas. It almost seems as if Google is expecting its search engine service to collapse for sure in the future.

What this tells is is that Google ultimately aspires to go beyond making money through online advertising and get into leading the next wave technology.

In 2005, Google bought “Android” for 50 million dollars, a company which by then have only existed for two years. It is told that Android proposed a deal to Samsung first, however they turned down the offer and as a result Android became a part of Google. Although Android was only a small company by then, Google was smart enough to make a bet by foreseeing the future of mobile phone market. Consequently, Google is now taking up 80 percent of the entire OS system.

From then on, Google has continued to make unprecedented M&As. For instance, Google bought a company called Lift Labs, a San Francisco company that makes a high-tech spoon designed to make it easier for people with neurodegerative tremors to eat. The numbers have not been disclosed so we cannot know for sure how much Google had to pay for this company. How much they paid for this acquisition is not all that important; what we want to know is why a search engine company is all of a sudden jumping into the spoon business.

Most of us take eating for granted. However, there are about 11 million people in the U.S. with either essential tremor or Parkinson’s disease who find even the simple act of lifting a spoon to be very difficult and disturbing. For these people, eating can be an embarrassing nightmare since the tremor makes eating very messy. So, Lift Lab’s Liftware device is basically a specially designed spoon and fork that makes eating easier by counteracting the tremors with a bunch of little swivels.

Lift Lab’s spoon

Did Google buy Lift Labs just to sell spoons for the disabled? The answer is probably no. For Google, buying this company is not just about making utensils but it’s rather more about finding out ways to improve the understanding and management of neurodegerative diseases such as Parkinson’s disease or essential tremor.

Google has many more projects that are going on inside. They have recently announced in October that it is currently designing tiny magnetic particles to patrol the human body for signs of cancer and other diseases. In addition, Google is also currently developing a contact lens that monitors glucose levels and is also running a so-called baseline study that is an attempt to figure out what makes healthy people healthy.

Some other seemingly unconventional projects they are working on right now include self-driving cars, delivery drone system that fly your packages to your door, and Project Loon, providing internet services to poor and rural areas through flying balloons into the stratosphere.

Google’s first self-driving car

No one can predict the future–we don’t know if Google is making a smart choice until we see what happens in the future. Google may collapse or may create an empire in which people cannot imagine their lives without Google. I can’t wait to find out where Google will stand in 30 years.

Recently, I have been reading plenty of Facebook and Twitter posts from my friends in Korea talking about the upcoming Black Friday sales. This is an entirely new phenomenon; I have not seen such posts until very recently. As far as I remember, Koreans don’t celebrate American Thanksgiving and there is no such thing as ‘Black Friday’ in Korea. I was introduced to the concept only after I came to the United States. So I wondered how and where the excitement for Black Friday shopping was coming from and began to do my research.

Foreign imported goods are very common in South Korea. You can basically get anything you want as long as you’ve got cash in your hands. However, due to exclusive distribution rights held by only a limited number of retailers, many imported goods are often quite expensive comparing to its original price. In other words, many retail stores are able to charge rip-off costs to domestic consumers due to lack of competition.

As the world is getting smarter, so are the consumers. Now that consumers in Korea know how much the original price is for imported goods through searches online, overseas direct purchasing has become a new shopping trend. The word ‘블프’ pronounced as ‘Beulfe’, a contraction of two words Black Friday, is therefore a trending keyword among South Koreans as U.S.’ biggest retail sales action is coming up.

The Friday after Thanksgiving is no longer a holiday just for U.S. consumers since Koreans will be taking advantage of Black Friday deals by purchasing goods online through websites like Amazon and Best Buy.

  “Guide” to purchasing goods on Amazon made by a Korean blogger. 

Direct purchasing through online shopping has been trending since last year. Increasing number of cost-conscious consumers are turning their backs from domestic retailers that charge rip-off prices. Individual South Koreans last year spent more than $1 billion on goods from online retailers based outside Korea, a 47% increase from 2012. Among the direct purchases, three fourths of all shipments were good from the U.S.

To look for what Koreans are interested in the most for the coming Black Friday, I have been looking into several Korean blogs, websites and social media to look for trending deals. One interesting finding was that the most-discussed deal was in fact on sales on home appliances made by Samsung and LG Electronics.

Thus this coming Black Friday is not just about foreign goods but is also about getting good deals on Korean products as well. It looks like there will be a lot of reverse purchasing action taking place this time. It has been announced that Sears will be selling Samsung’s 55-inch full-HD TV for $599.9 while the exact same product gets sold for about $1,300 in the Korean market. Korean consumers who are angry at Samsung and LG for their notorious act of dumping have finally found a way to purchase good quality appliances at a much cheaper rate.

For retail business, overseas direct purchases is a nightmare. They have seen a steep decrease in their sales ever since Korean consumers have found smarter ways to get better deals through overseas purchases through the Internet.

On the other hand, shipping business is at its height. In order to process the increasing number of overseas direct purchases, delivery services in Korea have been making adjustments. Hyundai Logistics, one of Korea’s biggest shipping companies expects a 60% year-on-year increase in the number of overseas shipments during this holiday season. The company recently added new processing facilities in the U.S. just to process extra demands.

According to Bank of Korea, overseas direct purchasing so far only takes about 0.2~0.3% in the domestic market. Nonetheless, the current phenomenon would not stop and will be taking up more and more part unless domestic retail price goes down. As a consumer myself, I am more than happy to see the current phenomenon happening in South Korea. I cannot wait to see how the retail business in Korea will change to adapt to the current situation.

It’s official: California drought, which began in 2011, has entered a fourth consecutive year of severe drought. Almost 80 percent of California is now in the state of “extreme or exceptional” drought. Low snowpack in the mountains and record high triple-digit temperature heat waves surrounding the state even in the midst of autumn are telling us that coming months will do little to improve the dehydrated state. In drought-stricken California, people engaging in businesses anywhere from breweries to golf are struggling hard to prevent their companies from shutting down by fighting water-shortage. Among all industries however, farming is the probably the most negatively impacted in California—the nation’s biggest agricultural state by value.

Shocking image of cumulative water storage changes in California captured by NASA satellite over the last 12 years.

http://mashable.com/2014/10/03/nasa-satellites-california-drought/

The fact that farmers need water to grow their products is pretty intuitive. However, the state has faced a net water shortage of 1.6 million acre-feet this year, resulting in $810 million loss in crop revenue and $203 million worth of damage in dairy and livestock products. California drought is causing the agricultural business to shrink. The dwindling farming business is negatively affecting the California economy in many ways. The severe and historic drought in California is expected to have a huge financial and economic influence in California’s agricultural sector—and lead to thousands of jobs being cut. To make matters worse, it will also likely to have negative impacts on nation’s food prices and foreign exports.

According to data released by Beacon Economics, exports of California fruits and tree nuts dropped by 8 percent compared to last year and vegetables by 7.8 percent this August. In terms of rice crop, almost 25% of California’s $5 billion will be lost this year due to drought. It is said that 2,500 rice farmers planted just 420,000 acres of high-quality rice used in sushi this year—a significantly lower number than usual. California’s Sacramento Valley produces most of the sushi rice and exports a huge amount of rice countries outside U.S., especially in Asia. According to U.S. Drought Monitor, 58% of California, including all of Central Valley, where a lot of agriculture happens, is currently going through “exceptional drought”, the most severe level of drought. In other words, sushi lovers will either see a spike in the price of sushi or a shorter roll.

Among the biggest losses in California agriculture are almonds, hay, corn and oranges. The state’s dairy farmers are struggling too because there is not even water to grow hay to feed their cows.

Empty docks as a result of severe drought

US_NEWS_ENV-CALIF-DROUGHT_7_LA.jpg

So what are some specific repercussions of California drought? What will happen if the problem does not get resolved?

1. Overall Economic Loss

The number one result of California’s severe drought is of course the loss of money. From a report from experts at the University of California, Davis commissioned by Department of Food and Agriculture, California is estimated to lose about $2.2 billion this year, and is expected to cut 3.8%, about 17,100 of the state’s agricultural related jobs, most of them consisting of seasonal and part-time work in the Central and San Joaquin Valleys. It is also according to the report that dairy and livestock farmers will be losing about $203 million while pumping cost for more groundwater will cost about $500 million.

2. Less Employment

Since there is less arable land for farmers to harvest their crops, there is less demand for workers as well. Job cuts are not only limited to farmlands but are also happening in other industries that are closely related to farming. For example, some companies that make farm equipment have begun laying off their workers and downsizing their business since there is now less need for farming equipment in California. Although this is only happening locally as of now, it will soon be a national if drought problem persists. For instance, those who are engaged in agricultural goods export business all around the world will soon be put into predicament as well due to shortage of food.

The job cuts are causing a ripple effect on the local economy. If the problem continues, it will soon cause a ripple effect on national and worldwide economy as well.

3. Less Export

California is responsible for providing food nationally and internationally. It is known that the state grows about 80% of world’s almonds. The almond trade has become so profitable that Californians began planting almond trees in deserts thanks to the well-equipped irrigation system. Now that farmers in California are strictly restricted from freely watering their plants, many lands that grow almonds are being left fallow this year. This is not only limited to almonds; we are seeing this in other food products as well such as rice and oranges. Although this is not yet a significant problem as of now since California has enough amount of products that are stored, it could soon possibly cause a global crisis if the problem were to persist.

4. Higher Food Price

This is quite intuitive. Less food production due to drought means there will be less supply chain. Now that there is less food available in the market but equal amount of people competing for that reduced amount, the price of food must go up. This will be especially crippling to poor people who are trying hard to make their ends meet. This will also make people turn to relatively cheaper food, most likely the imported goods from other countries. This will stagnate the local food market and ultimately lead to less active economy and possibly inflation as well due to less consumer confidence.

5. Groundwater Demand

The average demand for groundwater in California is usually around 40 percent a year, but now it has reached 60 percent. The amount of money put into pumping groundwater costs millions of dollars. To make things worse, pumping groundwater not only depletes the stored water but also makes dangerous conditions for the ground such as huge sinkholes because groundwater is layered in clay and sandstone. If this happens to be the case, the state would have to spend extra money on fixing the land.

Using up groundwater due to drought may solve the problem that is imminent. This is why we are not seeing a huge change in our food prices just yet. However, using up groundwater is not the best idea if we look at this situation in a long term—there is only a limited amount of resource and it will be depleted soon enough if drought continues to happen in the future. The result of depleted groundwater will be devastating, leading to much less harvest and worsened land situation.

As of now, there is nothing we can really do to solve this problem. The dilemma to this drought problem is that the short term solutions that have been implemented to resolve the problem may resolve the current economic problem but it cannot solve the drought problem which can occur over and over again. All we can do as of now is to use less water. We have been too greedy, and surprisingly our greed has come back to haunt us.

I met Allan Allaf at a small auto insurance company located near USC. I introduced myself and somewhat desperately asked if I could meet the owner of the company for my assignment.  By this point, I was already denied four times by other small businesses due to different reasons and was extremely exhausted by the triple-digit weather. I think Allaf saw how desperate I was to get the interview. He told me he was the sales manager at the company but thinks he could offer me some help since he runs a boutique shop in downtown Los Angeles.

The first question that came to my mind was “why is he here if he has his own business?” But I didn’t want to seem too rude. I wanted to hear his story first.

So this is how the story goes. Allaf is the owner of “Treasurer Boutique” located inside the grand Millennium Biltmore Hotel in downtown Los Angeles. His fiancé currently is in charge of running the business. He used to have two more employees but had to let them go in order to cut to the bear essentials due to sluggish economy.  He first jumped into the business with $5,000, which he had paid his friend who used to own the boutique. The rest of the money came from loans, which, he is still paying back little by little. “I come here (insurance company) to work just so that I can sleep better at night.”

When I asked him if his business has been impacted by cyclical or secular shifts, he told me both factors impacted him. Then interestingly enough, he started talking very cynically about the media. “The media is a big problem from all aspects. It wouldn’t shut up about the economy and puts fear in people’s hearts. As a result, consumers become very aware about their money and refrain from spending. As long as the media keep making negative forecasts about the economy, I must keep coming here to work as a sales manager.

Mr. Allaf personally believes there is nothing wrong with the economy whatsoever. This doesn’t mean he didn’t have to change the way he runs the business. He had to stop buying smaller quantity of products from the regular vendor he used to purchase from. He began ordering larger quantity items from wholesaler to get a more discounted rate, which ultimately results in cheaper retail price. Nonetheless, despite the cheaper retail price he has to offer to consumers, there are discounts going on at pretty much all the time going anywhere from 10 to 60 percent and even 70 at times.

Interest rates or access to capital do not play a significant role in his business since people do not have to rely on third party to finance any of the items sold at the Treasurer Boutique nor the customers must be qualified by a third party to buy the products from his shop. Nonetheless, online market is a huge threat to him. “The online market is probably our biggest competitor that affects us the most. Unfortunately, small businesses like mine cannot buy in huge bulks of products as Amazon does to sell at those prices. Plus it is a lot easier to buy stuff from home than actually going into the store to purchase goods,” said Allaf.

Another challenge he faces as a small business owner is the huge amount of tax he must pay. “Small business runners pay more taxes than big corporations. I don’t mean in terms of numbers and figures but in terms of percentage,” said Allaf. Even though he did not see an increase in the fees he needs to pay, people’s spending has dropped by a significant amount. He feels that it’s unfair that only big corporations get the government’s advantage of having their tax cut while small business people are struggling more and more to pay their taxes. He is therefore currently thinking about getting more loans for his business. “It’s hard for us to decide whether people like us should get a loan or not. I think it’s almost impossible for small businesses owners, especially nowadays, to excel without the help of loans.”

Then he added, “we are constantly facing predicament. It’s a matter of whether we should build up slowly or make a fast leap.

Nonetheless, he seemed quite casual about these challenges. He said his business is quite easy to run because it pretty much runs itself. He was also very optimistic about the U.S. economy. “I believe there is nothing wrong with the economy whatsoever. It’s not a factor about the economy, it’s the media play,” explained Allaf.  He gets annoyed of how the press puts false fear in people everyday, which makes people spend only 10 dollars when it is totally fine to spend 20 dollars instead.

“I really hope the media can do their job right. In the end, it is them who makes the difference in the economy.”

Economy is interesting because it even affects what people wear. The most well-known fashion related economic indicator of all time is the Hemline Indicator, an idea that women’s hemlines are influenced by the macroeconomic performance. In other words, the shorter the skirt gets, the better the economy looks.

South Korea is currently struggling with economic recession. Its economy suffered its worst growth in more than a year during the second quarter of this year. The cloudy outlook for the economy in South Korea is therefore affecting latest fashion trends—people are going back to the basics.

According to the data analysis that has been conducted by istyle24, one of the biggest online fashion retail store in South Korea, there was a huge rise in demand for basic fashion items. Comparing to last year, there was a 139% rise in classic tees, 78% rise in plaid/checkered shirts, and 54% rise in polos for men’s fashion items. Accordingly, the shop has also seen a 30% hike in basic tops and 42% rise in tanks in women’s items.

Moreover, the analysis also stated that there was a much higher demand in the market for white, black and gray color fashion items regardless of gender. Comparing to last year, fancier color such as pink, blue and orange items showed a 19% decline while there was a 21% growth in the market for achromatic color clothes.

This interesting trend in the fashion market can be explained in a few ways. First of all, the price. Obviously people are having less money to spend on clothes and other luxury items due to economic recession.  Thus people are turning to something they can easily afford such as classic tees and basic tanks that are relatively cheap comparing to other kind of clothes. For instance, you can get a men’s v-neck tee that is as cheap as $3.80 at Forever 21.

Another big reason for growth in demand for basic style clothing is that they have high applicability. Consumers who now have less money to spend are not willing to take risks in buying clothes. In other words, people want to buy items that they know they will put on for sure instead of having to waste money on something that will be kept in their wardrobes forever. People in South Korea are basically taking advantage of inexpensive classic fashion items that can be easily matched with anything.

Whether it is the hemline or the t-shirts or whatever the fashion item may be, one thing we can know for sure is that economic recession makes people look less fancy.