Caveat: Denis O’Brien is no friend of Facebook and Google

Digicel owner has threatened to block social networks’ adverts unless deal concluded

 

When Denis O’Brien announced last October that he wanted revenue sharing agreements with Google and Facebook or he would block their ads from Digicel’s network, there was a sense he was trying to deflect attention from his telco’s floundering flotation, which was eventually yanked a few days later.

Picking a gunfight with two of the biggest technology companies in the world didn’t seem the smartest idea, not even for a tycoon as trigger-happy as O’Brien. He isn’t short of a few bob for bullets, as his regular trips to the Irish courts show. But his resources for a protracted war with the tech giants might only procure a mere pea shooter compared to the Gustav available to Google.

Yet O’Brien appears to be now taking on his mission – to force Google and Facebook to cough up to reach customers over his network – with an almost quasi-religious zeal. “It’s time to come to Jesus,” said O’Brien at a conference in California on Monday. He was glowering at Ross LaJeunesse, Google’s head of international relations, who had just criticised him.

“Or maybe go on the Camino . . . find a new way [to share revenues with telcos]. How can we be partners in bringing the world broadband?”

O’Brien’s argument is simple. As he sees it, Google, Facebook and other OTT (over the top) content providers are raking it in on the back of the expensively-assembled infrastructure of telcos such as Digicel.

Share your loot with me to help pay for my wires and pipes, or I will block your ads from my network, he has threatened them. No agreement, no ads, no revenue.

Using software from Israeli ad-blocker, Shine, Digicel is now carrying out his threat across more than 30 markets, despite whimpering from some regional regulators. Judging from his comments, O’Brien appears to be most upset with Google, with whom he says he has had “lovely chats” but no dice.

“Initially they threatened us [after he proposed ad blocking],” O’Brien said. “Then they became friendly. Then they said they would have to go back to Mountainview (where Google is headquartered) and think about it.”

One wonders how O’Brien’s confrontational approach towards Google affects the mood at board meetings of Communicorp. Ronan Harris, head of Google’s massive Irish operation, is a director of the radio business alongside O’Brien.

Has he any hope of getting a dime from the tech giants? Not on his own. But if he can build a “coalition of the willing” among other telcos to block Google and Facebook ads at network level, he may force them to give some ground.

This appears to be the strategy he is now pursuing. Mobile operator Three is already on board.

O’Brien was loudly banging his drum this week at the annual global conference of the Milken Institute, at the Beverly Hilton hotel near Hollywood. The Milken conference, sponsored this year by Paul Coulson’s Ardagh Group, is like a star-studded Davos without the snow.

The bejazzled crowd included actors Cher, Tom Hanks and Seth Rogen, investor types like Blackstone’s Stephen Schwarzman and assorted other business, media and political global heavyweights. O’Brien, for example, was on a panel with Tony Blair.

The conference is put on by philanthropist Mike Milken, a financier derogatorily known as the “junk bond king” in the 1980s before he was jailed for securities violations. He served two years and paid $600 million in fines and settlements.

Milken popularised investment in the sort of high-yielding corporate bonds issued in recent years by the likes of Digicel and Ardagh. O’Brien is a regular at the conference. So, too, are a lot of other influential people, who will have heard the Irish billionaire’s arguments.

Eric Schmidt, Google’s executive chairman, was also there. One wonders did O’Brien collar him on the sidelines for another “lovely chat”. He certainly didn’t mince his words when he crossed swords with LaJeunesse, who was once an adviser to terminator-governor Arnold Schwarzenegger.

“You forced us [to ad block] and there will be a lot more of us... They’re struggling in Mountainview as to what to do with people like us.”

At the Milken gig, O’Brien also reminded everybody he is on the United Nations broadband commission, where he serves alongside industry heavyweights such as America Movil tycoon Carlos Slim, Vimplecom boss Jean-Yves Charlier, and Ooredoo’s Nasser Marafih. It includes politicians aplenty, too.

Kevin Martin, one of Facebook’s top policy lobbyists, also serves on the commission. O’Brien is presumably making as much noise about ad-blocking and revenue sharing at the commission as he did at Milken this week.

LaJeunesse told O’Brien that his approach, if widely adopted, would change the internet because it would deprive smaller publishers and start ups of vital ad revenue.

This, O’Brien argues, is a “canard” because if Google and Facebook would only share their huge revenues with him to help pay for the rollout of “broadband, 4G and 5G”, he wouldn’t have to ad block.

“Enough is enough,” he said.

Over to you, Mountainview?


Footnotes . . .

There comes a time in everyone’s life when they must grab a knife and fork, tuck a nice white napkin into their shirt, and chow down heartily on a big, steaming plate of humble pie.

Just over a year ago, I compiled an effective league table of Irish business figures, according to the English football team they supported. Michael O’Leary was the nouveau riche Man City fan, Dalata’s Pat McCann the Arsenal fan, Aidan Heavey of Tullow Oil the Man Utd fan, and so on.

Nigel Blow, the former Brown Thomas chief executive, was then the chairman of Arnotts and well-known in Irish business and media circles as a Leicester City fanatic. At the time, Blow’s team was rooted to the bottom of the table and, as I wrote with what appeared to be some justification, “looked doomed”.

Leicester needed a miracle to survive last season. They got one and the rest is history, as this week proved when Leicester won the Premier League title to the astonishment of pretty much everybody.

Arnotts has since been bought out by Selfridges, and Blow has returned to his native England where he is now running posh shirt company, Turnbull & Asser.

He is predictably stoked that Leicester won the title.

Turnbull & Asser, it turns out, now supplies shirts to the Leicester City team. The perks of being the boss, eh Nigel?

No more footballing predictions around these parts. Not even tribal barbs towards Liverpool fans such as IAG’s Willie Walsh. They’d only win the league next season, and we can’t have that . . .

If you’re on Linkedin, Richard Branson is “looking for your advice”, apparently.

The Virgin tycoon wants to choose 12 members of the site from a mountain of Irish and British applicants to help him judge the Virgin Media “Voom” business pitching competition.

Voom has a prize fund of £1 million, which will be distributed among businesses who pitch their ideas throughout a gruelling, 14-week odyssey. One leg involves a 29-hour “pitchathon”, which Virgin says is a Guinness World Record attempt. The 12 judges will be chosen on the basis of the quality and relevance of their business experience, their number of Linkedin connections and the quality of the content on their Linkedin page.

They must be “experts” in their field and be available for four days in June to help mentor the businesses and entrepreneurs who will pitch to Branson.

There doesn’t appear to be any pay on offer for the Linkedin dedicated dozen.

Apparently their rewards will include an opportunity to meet Branson and “have the moment saved for eternity via a personal photo”. Oh, and a “warm, satisfied feeling”.

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