In the first week of class, we, the students, were assigned to teams of 4-5 classmates in each group. Our team was instructed to find a recent (year 2015) newspaper story and analyze it using the tools and concepts from this course.
My team and I had chosen to research, analyze and deduce projections upon a then-recent partnership referred to as: internet.org. This partnership - comprised of Facebook (founder), Samsung, Ericcson, Nokia, Opera, Qualcomm and MediaTek - had been pursuing a project in which the poorest individuals of the world would have access to what the consortium of corporate giants referred to as a human right: access to reliable internet.
TEST BANK For Corporate Finance, 13th Edition By Stephen Ross, Randolph Weste...
Adressing Economic Disparity
1. Theodore Roosevelt has often been commended as one of the world’s greatest minds. Aside from
achieving such a status as the 26th president of the United States, he is also fêted for his immeasurable
acts of charity in attempts to bringing the man closer to fellow man, as he recognized that no single entity
can make a notable difference,and that it would take the work of many:
“I am a strong individualist by personal habit, inheritance,
and conviction; but it is a mere matter of common sense to recognize that the
State, the community,the citizens acting together,can do a number of things better than if they were left
to individual action.” – Theodore Roosevelt (The Independent, January 6th, 1910)
It seems only logical for such a prosperous and global economic society of today to adopt these findings
and incorporate them into a credible reality. In fact,taking such a philosophical premise and molding it
toward a state of global communication and commerce, is exactly what a consortium of companies are
pursuing under a project entitled Internet.org.
Among the consortium are global corporate giants Facebook (founder), Samsung, Ericcson,
Nokia, Opera,Qualcomm and MediaTek. This league is pursuing a project in which a connected world
could address economic disparity; where even the poorest of individuals could connect to a low-cost, low-
data version of basic internet services. Such features including medical services, employment and local
information websites without data charges. The purpose of this project is to supply what Facebook CEO,
Mark Zuckerberg, considers to be a modern human right to the world: internet access.
The total expense to fund Internet.org has yet to be revealed; however, as per analogous
technological developments in similar industries have been exposed, fundamental monetary assumptions
may be effectively hypothesized. As previously mentioned, the intention of Internet.org is to provide
internet service to those who have yet to tap its potential. The process in which individuals receive it
though is blueprinted in solar-powered drones, weighing at the amount of a small car,yet the size of a
commercial 747 aircraft.
2. Solar Impulse, a Swiss company producing self-sustaining solar-powered aircraft, has climbed to
one-hundred-fifty-million USD over the course of thirteen years of research and development. Facebook,
the founder of this project, has recently acquired Ascenta,a drone manufacturer,for twenty-million USD
that will undoubtedly give a certain edge in research costs. NASA has released similar-functioning drones
at a development cost of fifteen million USD individually. Maintenance of said drones requires
investigation into the US military, where costs are said to be roughly five million USD annually. Ergo, to
build a fleet of twenty-five drones would cost upwards of two-hundred fifty million USD and
approximately an additional one hundred fifty million USD annually set aside for maintenance.
While Internet.org is in essence targeting the most impoverished persons, their presence in India
has not been unwelcomed. As of 2014, a shocking 120.5 million individuals held a social media account,
with 94% of the population operating a Facebook account; otherwise stated, only 10% of the total
population of India has access to internet services. By 2018, the number of social media users is expected
to nearly double. Where Zuckerberg has stated that he has no intention enabling ad space on this project,
he admits such a feature may be a possibility in the long-term. As per this statement, it would be just to
make the assumption that, where internet.org is a non-profit organization, it will undoubtedly be
operating at a loss in the short-run; however, as Zukerberg had stated he intends for future ad
development, incoming revenue may exceed costs of maintenance and production, reiterating the fact that
there is a near 1.252 billion potential consumers available
Where supplying internet service is by no means a new industry, the process and ideology in
which this particular service is being developed and delivered - is. As of currently released information,
there are only two emerging players within this industry: Google and the consortium that together
establishes internet.org (*). Be it that this project is a non-profitable, i.e., charitable service at its most
basic foundation, our team finds it argumentatively beneficial for financially able-bodied investment
firms and corporate entities to invest both their services and input at a monetary loss.
3. Entering into this developing field will undoubtedly be monetarily costly to any and all companies that
attempt to offer this particular service; however, that is not to say that it will be unfavorable to do so. Be it
that those associated with the consortium that umbrellas’ Internet.org are already in the process of making
this industry a reality, the question, “Why are other companies not providing this existential service to
those whom need it most?” arises. This realization consequently causes considerable damage to the Public
Relations campaign of the foregoing company while providing a significant praise to those whom are
acting in favor of the project. Figure 3 illustrates the anticipated loss/benefit as per each company’s
decision in terms of Public Relation Acceptance perceived via the public.
If both Internet.org as well as Google take action in providing this service (Block A), both firms
will be praised equally, thus neither benefiting internet.org nor Google in strict comparison. If Internet.org
makes the decision to withdraw from this service while Google continues through with it (Block B),
Google’s Public Relations campaign will receive all credit, where the companies which comprise
themselves to be internet.org will likely be each and individually scrutinized for their withdrawal.
Reversing the scenario will result in the same outcome, yet with reversed roles. Finally, if neither
company is to take any action into entering into this field, interestingly, neither company would
experience diminished relations; in fact, it would likely be noted that the mere attempt at providing such a
service as a charitable act may benefit the company in social standards.
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