Business Insider
Analyzing the top news stories across the web

Jan. 14 2015 2:56 PM

This Is Where Most of Disney’s Money Comes From

This post originally appeared in Business Insider.

It's an exciting time for Disney. With a flurry of successful superhero movies, the animated juggernaut Frozen, and new Star Wars movies on the horizon, things are looking up. Meanwhile, the company's stock is up around 500 percent since 2009. But where does Disney's money really come from?

As you'll see in the graphic below, the Walt Disney Studios films actually account for a fairly small percentage of their revenue.

where disneys money comes from_03

Chart by Mike Nudelman/Business Insider

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Jan. 13 2015 2:57 PM

This Is Where Apple’s Money Comes From

This post originally appeared in Business Insider.

Where does Apple's money come from? Mostly from iPhones. But the company also gets some money from Macs and iPads. Business Insider's graphics team made this infographic to explain Apple's business.

bi_graphics_applerevenue-4_updated data

Chart by Skye Gould/Business Insider

Jan. 13 2015 12:18 PM

Hate Someone? Send Him or Her Glitter.

This post originally appeared in Business Insider.

On Tuesday morning, Twitter exploded when a link to a website called Ship Your Enemies Glitter started getting passed around. 

We first saw a link to the website posted to Reddit's r/InternetIsBeautiful forum and later on startup discovery website Product Hunt.

Ship Your Enemies Glitter was described by Product Hunt founder Ryan Hoover as “the ultimate troll product.”

Quite literally, the expletive-laden Australian website lets you pay $9.99 to send glitter to your enemies. “Hint: the glitter will be mixed in with the note thus increasing maximum spillage,” the website reads.

The website has since crashed, presumably due to the traffic it received.


Screenshot via Ship Your Enemies Glitter

In addition to including glitter in an envelope for your enemies, the website promises to also include a note explaining why the recipient is receiving the glitter, which is notoriously difficult to clean up.

It doesn't seem to be a joke, though: The form on Ship Your Enemies Glitter's website submitted to a PayPal checkout page. 


Screenshot via Ship Your Enemies Glitter

The website also had a cursing-heavy FAQ page. 


Screenshot via Ship Your Enemies Glitter

It's not immediately clear who is behind the website, and the Product Hunt team isn't sure either. The domain owners' information is masked. 

Jan. 12 2015 3:14 PM

This Is the Reason Why You See “Sale” Signs Everywhere When Walking Into a Store

This post originally appeared in Business Insider.

Think back to the last time a store had an unadvertised sale.

You probably can't.

That's because, according to Mark Ellwood, author of Bargain Fever: How to Shop in a Discounted World, those big red sale signs that you see plastered all over stores are what gets shoppers to buy, not the actual marked-down prices.

Ellwood says these signs are known as "information cues" in the retail world, and we're powerless at resisting them—no matter if there's actually a sale going on.

Ellwood cites an MIT study where customers randomly received one of three catalogs, all featuring the same dress but at different prices ($54, $49, and $44).

In the first round of the study, the $49 dress—the cheapest option—was the best-seller. In the second round, though, an all-caps “for sale” sign was added next to each of the dresses. In this round, each price level sold equally as many dresses.

It wasn't a one-off. The author cites a second (unpublished) MIT study to caution consumers to check prices before grabbing the item with the big red sticker:

In this experiment, 200 different products from 18 different locations of the same convenience store chain were put into three groups. Products in the first group (the control group) were sold in the same way at the same price as always. Products in the second group (the quietly discounted group) were marked down 12 percent, but no sale sign was used. Products in the third group were marked with a red and yellow, all-caps “low price” sticker, but the price remained the same as always. Ellwood says, “The results were telling.”

He writes:

The quietly discounted group sold just over 17% more units than the control. But the group with the LOW PRICE sticker also had increased sales, in this case by 3.4%. That profit uptick cost the store nothing more than the price of printing a few flimsy sheets of paper.
It's a reminder to double check the true discount any time you're nudged by a splashy sign to pick up a supposed special offer in the grocery store.

And it's not just a coincidence that all those information cues are red, either.

According to Ellwood, red is an “eye-catching color”—literally—because it has the longest wavelength, making something that is red appear closer to us than it actually is.

Ellwood also points out that after black and white, red is the next color to appear in a language.

He writes:

The longer the word for a color has been in use ... the greater the number of associations, meanings, and nuances it can acquire. In this way, the color itself gains more impact. In other words, since we've been using the word for red far longer than that for, say, purple, it's embedded more deeply into our psyche. Thanks to both history and physiology, we notice a bright red sale sign more quickly and with greater interest than any other color.

Jan. 9 2015 2:27 PM

Janet Yellen Faces a Challenging Economic Dilemma as Oil Prices Fall

This post originally appeared in Business Insider.

Falling oil prices may be good news for consumers who have seen prices at the pump start falling and the prices of other goods starting to drop as well, but it could prove a headache for Federal Reserve Board Chairwoman Janet Yellen.

That’s because the U.S., which just posted an astonishing 5 percent gain in GDP, is now flirting with deflation.

The Fed is thus facing a bizarre economic dilemma: It has runaway growth and collapsing prices at the same time. The weapons available to Yellen to fight deflation are flimsy. Normally, the Fed would want to lower interest rates. But they are already at zero—there is nowhere left to go. And, of course, house-on-fire economic growth usually calls for higher interest rates, which would only exacerbate the deflation side of the problem.

The Fed most recently faced this problem in the 1980s, when low oil prices spurred runaway growth. The Fed took its eye off the ball at the time, leading to nearly 5 percent inflation by 1990.

Both Brent and West Texas Intermediate crude oil prices have fallen by more than half since June as the U.S. shale oil boom increased the supply of the commodity and signs that emerging-market growth is slowing weighed on demand. The rout was also compounded by the surprising decision by OPEC in November not to cut production in response to falling prices.

Those falls in oil prices are pushing inflation below the Federal Reserve’s 2 percent target, potentially delaying the likelihood of rate hikes despite a buoyant economy.


Goldman Sachs

As Jan Hatzius, chief economist at Goldman Sachs, writes in a recent note: “It is not inconceivable that Fed officials will hike even if core inflation ends up close to 1 percent, as long as they are convinced that the weakness is entirely due to temporary factors such as energy prices and oil. But the hurdle for how convincing other data need to be in this case would increase significantly.”

That is, the Fed may put its 2 percent target aside if the Federal Open Market Committee, or FOMC, decides that prices are being depressed by short-term factors that will eventually stabilize or reverse, pushing inflation back toward target. The International Monetary Fund forecasts 3.1 percent growth in the U.S. over 2015, while the country’s unemployment rate was 5.8 percent in November, around the level that many economists consider the “natural rate” below which wage gains would be expected to start pushing up prices.

This would imply that labor-market indicators would become critical to the FOMC’s analysis of when to raise rates—and in particular wage growth. As Yellen put it in August last year, “since wage movements have historically been sensitive to tightness in the labor market, the recent behavior of both nominal and real wages point to weaker labor market conditions than would be indicated by the current unemployment rate.”

That is, rate hikes may be put on hold until people start seeing the benefits of growth in their take-home pay. Moreover, with global fears over the prospect of deflation gripping much of the developed world, the FOMC body could find itself under pressure to hold off rate hikes while inflation remains below target.

But there are big risks to this strategy. If the dip in inflation due to commodity-price falls helps to mask the underlying strength of the U.S. economy, once they stop falling inflation could come surging back and be much more difficult to control.

Below is a chart showing Barclays’ forecasts for headline inflation. As you can see, after dipping into negative territory, Barclays expects CPI to head above 2 percent by the end of 2015.

If the FOMC holds off for too long and expectations of higher inflation take hold, then it could be much more difficult for the Fed to bring it back to target over the medium term.

Moreover, Yellen has also indicated that sluggish wage growth may not prove a sufficient reason to hold rates down. Sluggish wage growth could reflect “pent-up wage deflation” that could be holding back the pace of gains, labor’s share of income could be structurally lower than it has been in the past (firms are spending a larger proportion of their money on e.g. dividends to shareholders and investment than on employees than in the past), and people who are unemployed finding it more difficult than expected to return to the workforce.

If those warnings prove accurate, prices may start to rise before wage growth picks up substantially, implying that the Fed may need to increase rates earlier.

There have indeed been numerous predictions of runaway inflation over the past few years, all of which have proved painfully wide of the mark. Nevertheless, the balance of risks has been shifting as the U.S. continues to recover from the crisis and close the remaining economic gap it left behind.

The Fed is charged with working out a safe exit strategy from its emergency policies, which many credit with having rescued the country from economic disaster. However, the collapse in oil prices has served only to make this difficult job even harder.

Jan. 8 2015 1:25 PM

This Image Isn’t by Banksy, but It’s Still Going Viral for the Right Reasons

This post originally appeared in Business Insider.

There’s an illustration being shared on Facebook, Instagram, and Twitter that claims to be a tribute created by street artist Banksy in response to the terrorist attack that killed 12 people near the offices of the French satirical magazine Charlie Hebdo in Paris on Wednesday.

While the image does have a touching message, it’s a fake—not created by Banksy.

Here’s the illustration that everyone is sharing:

Mashable is reporting that the image was posted by a “popular ‘Banksy’ account” on Instagram. The Instagram isn’t run by Banksy at all, and is actually a fan page that shares street art created by a variety of different artists—rarely with any attribution.

Banksy has issued a statement to the Independent denying that the illustration is his work. “We can confirm this is not by Banksy,” said a spokesman for the anonymous artist.

Instead, it appears that the illustration was originally posted by graphic designer Lucille Clerc, just with an added Instagram filter.

Here’s Clerc’s original Instagram post:


Break one, thousand will rise #CharlieHebdo #JeSuisCharlie #raiseyourpencil

A photo posted by Lucille Clerc (@lucille_clerc) on

Search on Facebook, Twitter, and Instagram and you’ll see plenty of popular accounts that seem to be official Banksy pages. The problem of fake social media accounts is so widespread that Banksy has even posted on his official website to deny he runs any Facebook or Twitter accounts. He does, however, have one Instagram account, which was used during his recent trip to New York.

Facebook was recently forced to remove the verification checkmark for a Facebook page for a Banksy account with millions of likes after the artist’s PR representative denied that he had anything to do with it.

The Instagram account that the pencil illustration originates from is part of a ring of fake social media profiles. As well as the fake Instagram and Facebook accounts, the administrators behind the Banksy pages also run a YouTube account that re-uploads popular viral videos to capitalize on their popularity.

Another clue that points to the image being fake is its file size. The image uploaded to the fake Banksy social media posts is pixelated and low-resolution. Banksy is an artist who makes a living from exhibiting his work, and wouldn’t want his work to be displayed in a way that made it look bad.

It’s tricky to verify new Banksy work. Because of Banksy’s continued anonymity, and the often confusing similarity to other graffiti artists, many works of art end up mistakenly labeled as created by Banksy. A handful of galleries and companies in the U.K. are, however, experts in his work, meaning that they can verify prints purported to originate from Banksy.

Nevertheless, given Wednesday’s tragic events, the sentiment is strong.

Jan. 7 2015 12:37 PM

Taxi Regulators Suspend Five Out of Six Uber “Bases” in New York City

This post originally appeared in Business Insider.

New York City has temporarily banned some of Uber's brick-and-mortar "bases" there, but it shouldn't affect service, the company says.

Five of the six bases run by the taxi service were suspended by the city's taxi and limousine tribunal after Uber refused to hand over ride records.

The decision was handed down Tuesday.

The Taxi and Limousine Commission (TLC) was requesting that Uber hand over "the date of trip, time of trip, pick up location, and license numbers" over a finite period.

The TLC's authority to request ride information comes from a rule that says "a Licensee must truthfully answer all questions and comply with all communications, directives, and summonses from the Commission or its representatives."

Uber argued unsuccessfully that the TLC's directive was a violation of the Fourth Amendment, which prohibits unreasonable search and seizure.

The TLC says its rule is "necessary to ensure adequate protection and public safety," according to the decision.

An Uber representative told Business Insider that operations would not be affected by the ban.

Here's what Uber had to say about the TLC's decision:

Uber continues to operate legally in New York City, with tens of thousands of partner drivers and hundreds of thousands of riders relying on the Uber platform for economic opportunity and safe, reliable rides. We are continuing a dialogue with the NYC Taxi and Limousine Commission on these issues.

Jan. 5 2015 3:15 PM

29-Year-Old Russian Hedge Fund Founder Disappears With All the Firm’s Money

This post originally appeared in Business Insider.

The value of the ruble isn’t the only thing that is vanishing in Russia. A Moscow hedge fund chief executive has disappeared, along with all the money in the firm's accounts. 

That’s according to a stunning feature in the Wall Street Journal. Kim Karapetyan, 29, the youthful founder of Blackfield Capital CJSC, has disappeared, much to the dismay of his staff, which didn’t know until a group of men charged into the firm’s plush offices.

From the Journal

The firm’s employees didn’t know anything was amiss until mid-October, when three men charged into Blackfield’s offices in an upscale complex along the Moscow River in central Moscow, said people who were there.
The men, who didn't identify themselves, said they were looking for Blackfield's 29-year-old founder, Kim Karapetyan, according to the people who were there.
But Mr. Karapetyan wasn't in the office that day or the next, when senior executives explained to the staff of about 50 that there was no longer any money to pay their salaries, said one former senior executive and ex-employees. The executives disclosed that all the money in the company accounts—some $20 million, including investor cash—was also missing, they said. It couldn't be determined whether investors were from Russia or other countries.
"Our CEO just … disappeared," said Sergey Grebenkin, one of the firm's software developers, in an interview.

No attempts to contact or find Karapetyan were successful, and he is still MIA. The company’s website brags that its “systematic investment process helps avoid human-factor, cognitive-biases, and emotional-trading errors,” but the CEO running away with all your money seems like a fairly big human error.

Jan. 5 2015 1:11 PM

A Morgan Stanley Employee Stole and Posted Data on 900 Clients

This post originally appeared in Business Insider.

Morgan Stanley said it has fired an employee who had stolen data from 900 of the firm's wealth management clients.

"While there is no evidence of any economic loss to any client, it has been determined that certain account information of approximately 900 clients, including account names and numbers, was briefly posted on the Internet.  Morgan Stanley detected this exposure and the information was promptly removed," Morgan Stanley said in a statement. 

The name of the terminated employee has not been released. 

Morgan Stanley (NYSE: MS) today began advising certain Wealth Management clients that an employee had stolen partial client data.  The Wealth Management employee has been terminated, and law enforcement and regulatory authorities have been advised of the incident.
While there is no evidence of any economic loss to any client, it has been determined that certain account information of approximately 900 clients, including account names and numbers, was briefly posted on the Internet.  Morgan Stanley detected this exposure and the information was promptly removed.
Overall, partial account information of up to 10 percent of all Wealth Management clients was stolen.  The data stolen does not include account passwords or social security numbers.  The Firm is taking the precaution of notifying all potentially affected clients and instituting enhanced security procedures including fraud monitoring on these accounts.
All impacted clients are in the process of being contacted by the Firm and their Financial Advisors.  A dedicated information line also has been established at 855-398-6437 (U.S. and Canada) or 512-201-2186 (outside the U.S. and Canada).
Morgan Stanley takes extremely seriously its responsibility to safeguard client data, and is working with the appropriate authorities to conduct and conclude a thorough investigation of this incident.  

Jan. 3 2015 8:00 AM

Russia Is Building a Train That Will Zip From Moscow to Beijing in Just 48 Hours

This article originally appeared in Business Insider.

Russia plans to build a new high-speed railway, with trains that would speed from Moscow to Beijing in just 48 hours. At the moment, it takes about seven days to commute between the two cities and the route requires changes. According to Romanian website Glasul, the Kremlin has awarded the project to China Railway High-speed (CRH), a subsidiary of the state-controlled China Railway (CR), which is working in a joint venture with the local firm Uralvagonzavod. CR is famous in the train industry for operating the world’s only magnetic levitation train in an urban area, the Shangai monorail.

Previously, Russia had commissioned a French firm, Alstom, for the first work on the rail line between Moscow and Kazan. Alstom is one of the leading high-speed train manufacturers in the world: In 2007 it set up a new record for conventional-wheeled high-speed trains, speeding up at 574 kilometers per hour (357 miles per hour). It also operates the urban tram line in Nottingham. But since France did not deliver its order of Mistral ships in late November this year, it appears the Russian government took it personally and decided to switch that branch of the construction of the high-speed railway to CRH, which is now in charge of the whole line, from Moscow to Beijing.

Here is a map showing the different branches:


Business Insider

The Moscow-to-Beijing direct route will measure about 7,000 kilometers (4,340 miles), effectively three times farther than the longest high-speed railway in the world, the Beijing-to-Guangzhou train, which is also operated by CRH (in red, above). 

Glasul reports that the new railway is a top priority for both the Chinese and Russian governments, having been discussed directly by the prime ministers of the two countries, Dmitri Medvedev and Li Keqiang, in recent bilateral meetings. Glasul writes that other supporters include the German automobile corporations Volkswagen, BMW, and Mercedes, which are all more than keen to speed up the shipping of their vehicles from China to Europe.

The new route will probably replace the mighty Trans-Siberian railway, connecting St. Petersburg to Vladivostok (the blue line in the map above). First, the old route doesn't go through Kazan, a city that in recent years has become more and more central to the Russian economy. Second, and more importantly, it takes about 15 days to travel the Trans-Siberian route from start to finish, whichm compared with 48 hours for the new line, sounds like a heck of a long time.