BEST OF THE WEB: The tech billionaire who bought a tropical resort
Wednesday, June 19, 2013/
Many people dream of becoming wealthy and buying a tropical resort island.
For Larry Ellison, founder of database giant Oracle, the dream recently became a reality when he purchased the Hawaiian island of Lanai (pronounced Luh-NAI-ee) for $US300 million.
According to Julian Guthrie of The Wall Street Journal, Ellison’s latest investment is any billionaire’s dream:
Now he owns nearly everything on the island, including many of the candy-colored plantation-style homes and apartments, one of the two grocery stores, the two Four Seasons hotels and golf courses, the community center and pool, water company, movie theater, half the roads and some 88,000 acres of land.
Since purchasing the island, Ellison has been busy dreaming up big plans for its future:
For the first time, Mr. Ellison has publicly detailed his ambitious and costly plans for the 141-square-mile island. They include building an ultraluxury hotel on the pristine, white-sand beach facing Molokai and Maui and returning commercial agriculture to the clear-cut acres. He also plans to endow a sustainability laboratory that will help make the island “the first economically viable 100%-green community.”
However, there is one catch to trying to redevelop a tropical island like Lanai: Getting its 3100 residents to agree to his vision.
The potential downsides of investing in an island were demonstrated by its previous owner, David Murdock, who purchased the island in 1986:
Murdock, who reportedly invested $700 million in improvements on the island, originally asked $1.2 billion for it. By the time Mr. Ellison bought Lanai in 2012, the island was in a state of neglect and the mood was dour. Unemployment was up, shops were closed and the community pool was shut down.
The message, if you’re considering investing in an island, is to beware. The tropical dream can become a nightmare for unwary tech billionaires.
A 2000-year-old technology could become a major new discovery in engineering
In most areas, science and technology are on a great march forward, where new inventions, theories and devices supersede old ones, rendering them obsolete.
However, in some areas, modern technology lags behind the skills and lost arts of our ancient ancestors. As Bernard Warner of Bloomberg Businessweek points out, a perfect example of this lies in the field of engineering:
As anyone who’s ever visited Italy knows, the ancient Romans were master engineers. Their roads, aqueducts, and temples are still holding up remarkably well despite coming under siege over the centuries by waves of sacking marauders, mobs of tourists, and the occasional earthquake…
Over the past decade, researchers from Italy and the U.S. have analyzed 11 harbors in the Mediterranean basin where, in many cases, 2,000-year-old (and sometimes older) breakwaters constructed out of Roman concrete stand perfectly intact despite constant pounding by the sea.
It seems Roman concrete, a long-lost technology from the ancient world, is in many ways far superior to its modern counterpart:
The most common blend of modern concrete, known as Portland cement, a formulation in use for nearly 200 years, can’t come close to matching that track record, says Marie Jackson, a research engineer at the University of California at Berkeley who was part of the Roman concrete research team. “The maritime environment, in particular, is not good for Portland concrete. In seawater, it has a service life of less than 50 years. After that, it begins to erode,” Jackson says.
After nearly two millennia of research, a new article in the Journal of the American Ceramic Society and American Mineralogist has finally uncovered the secret of what made this ancient technology so durable:
‘The Romans made concrete by mixing lime and volcanic rock. For underwater structures, lime and volcanic ash were mixed to form mortar, and this mortar and volcanic tuff were packed into wooden forms. The seawater instantly triggered a hot chemical reaction. The lime was hydrated—incorporating water molecules into its structure—and reacted with the ash to cement the whole mixture together,’ [the researchers explain.]
The Portland cement formula crucially lacks the lime and volcanic ash mixture. As a result, it doesn’t bind quite as well when compared with the Roman concrete, researchers found. It is this inferior binding property that explains why structures made of Portland cement tend to weaken and crack after a few decades of use, Jackson says.
It might just be that the greatest technological discovery for 2013 ends up being created by an Ancient Roman engineer, rather than a modern tech start-up.
Why Samsung paid for Jay-Z’s latest album
In recent years, Samsung has overtaken Nokia and Apple to claim the crown as the world’s largest smartphone and mobile phone manufacturing.
However, as Jim Edwards from Business Insider points out, the Korean electronic giant’s latest business move, involving a rap star, has more than a few people scratching their heads:
At first glance, Samsung’s $5 million deal with Jay-Z to release his new album, Magna Carta Holy Grail, as a free copy on 1 million Galaxy and Note mobile devices, seems like a colossal act of marketing hubris.
But there might be more to this tale than a possible desire by Samsung Mobile chief executive JK Shin to buy himself some street cred.
As Edwards points out, the amount Samsung spent on the endorsement is a tiny fraction of its advertising budget.
Samsung spends more than $4 billion annually on advertising. $5 million is, therefore, barely a rounding error in Samsung’s accounts.
Yet in the world of social media, deciding to spend $5 million has bought the tech giant a lot of publicity.
As of 3 p.m. today, Google News registered 312 news sources carrying stories about the deal in the last 24 hours. That number will surely double in the next week or so. And then there’s the word of mouth … and so on. To buy that level of exposure through traditional advertising would have cost multiples of $5 million. (Oddly, had Samsung done just that, few would have noticed or complained about the budget.)
With many wondering how the music industry will survive in the internet age, it could be the advertising budgets of major tech firms end up providing the answer.
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