The Bay Citizen: At Google, the Book Tour Becomes Big Business

At an Authors@Google “fireside chat,” Ms. Fey, the “30 Rock” creator and star, had a friendly conversation with Eric Schmidt, the company’s executive chairman, in front of an audience of hundreds of employees who greeted her with a standing ovation.

As Google’s reach into many aspects of media production and distribution grows ever greater, A-list authors, actors, musicians and others are taking part in the company’s six-year-old on-campus speaker series.

Lady Gaga recently shared the stage with Marissa Mayer, the company’s vice president for location and local services, as did Christy Turlington, the supermodel turned documentary director. The YouTube video of “Google Goes Gaga” has been viewed more than 1.5 million times.

The unlikely spectacle of technology executives chatting up celebrities talk-show-style originated as part of Google’s effort to create a quasi-collegiate atmosphere on its campus. The events increasingly dovetail with Google’s interests in publishing, broadcasting, music distribution and other media businesses. The company is selling “Bossypants” as a Google e-book for $12.99 in its online bookstore, which it opened in December.

For authors and other creative professionals, an appearance at the Googleplex, the company’s sprawling complex of office buildings, is good business — but nonetheless conjures some mixed emotions in light of Google’s complicated relationship with content creators. The company is involved in a bitter lawsuit over its efforts to scan all of the world’s books and make them available online, and has long stood accused of unfairly profiting from work that is excerpted and indexed by the company’s search services.

“I think it’s a great thing that they’re doing this,” Chris Clarke, a natural history and environmental writer, said of the talks. “I don’t think that it clears their karma as far as trying to become the sole-source provider of all intellectual property everywhere.”

The speaker series began in 2005 with the New Yorker writers Malcolm Gladwell and James Surowiecki as its first two guests and has since featured hundreds of authors, musicians, chefs, economists and politicians.

Google employees involved in the program say that it evolved out of employees’ interests and at their initiative.

“The program was a grass-roots effort that started when a few Googlers realized that some remarkable people were passing through the halls of the Googleplex,” said Ann Farmer, an information engineer. She is one of more than two dozen employee volunteers who organize the events, which are now held three to five times a week.

Since 2005, more than 1,000 guests have appeared. Garry Kasparov, the chess master, and Jesse Ventura, the former governor of Minnesota, are among some 600 authors, mostly of nonfiction, who have participated. The list includes a number of authors who have written books about Google.

Talks now take place at Google offices around the world, with employees from 18 offices participating via videoconferencing. At larger events, employees use Google Moderator software, which fields questions from the audience, ranking the most popular ones.

In the early days of the series, the employees had to cajole speakers to attend, working personal connections, since the company did not pay an honorarium. But the program gained traction, with some talks drawing more than a million viewers on YouTube. “Let’s put it this way,” said Ms. Farmer. “The tables have turned.”

As of April 1, Cliff Redeker, 27, is the company’s official “speakers specialist.” He used to organize author visits in his spare time as a support specialist, but now his full-time job is dedicated to the speaker series.

The series has made the Googleplex an increasingly important stop for authors promoting their work in the Bay Area, as many major bookstores that featured readings have closed.

“It’s not going to replace bookstore events,” said Larry Weissman, a literary agent in Brooklyn, “but if I have an author going to San Francisco, I always want my author to stop in at Google and do an event there as well.”

The Google books lawsuit, though, combined with a broader concern that the Internet is undermining the ability of authors to get paid for their work, remains a big issue for some.

As of last October, Google Books had already scanned more than 15 million titles from more than 100 countries in 400 languages. On March 22, a federal judge threw out a settlement agreement between Google and groups representing authors and publishers. The Authors Guild had filed a class-action lawsuit against the company over copyright infringement.

 

Seeking Business, States Loosen Insurance Rules

Today, all it takes is a trip to Vermont.

Vermont, and a handful of other states including Utah, South Carolina, Delaware and Hawaii, are aggressively remaking themselves as destinations of choice for the kind of complex private insurance transactions once done almost exclusively offshore. Roughly 30 states have passed some type of law to allow companies to set up special insurance subsidiaries called captives, which can conduct Bermuda-style financial wizardry right in a policyholder’s own backyard.

Captives provide insurance to their parent companies, and the term originally referred to subsidiaries set up by any large company to insure the company’s own risks. Oil companies, for example, used them for years to gird for environmental claims related to infrequent but potentially high-cost events. They did so in overseas locations that offered light regulation amid little concern since the parent company was the only one at risk.

Now some states make it just as easy. And they have broadened the definition of captives so that even insurance companies can create them. This has given rise to concern that a shadow insurance industry is emerging, with less regulation and more potential debt than policyholders know, raising the possibility that some companies will find themselves without enough money to pay future claims. Critics say this is much like the shadow banking system that contributed to the financial crisis.

Aetna recently used a subsidiary in Vermont to refinance a block of health insurance policies, reaping $150 million in savings, according to its chief financial officer, Joseph M. Zubretsky. The main reason is that the insurer did not need to maintain conventional reserves at the same level as would have been required by insurance regulators in Aetna’s home state of Connecticut.

In other big transactions, companies including MetLife, the Hartford Financial Services Group, Swiss Reinsurance, Genworth Financial and the American International Group, among others, have refinanced life, disability and long-term-care insurance policies, as well as annuities.

For the states, attracting these insurance deals promotes business travel and creates jobs for lawyers, actuaries and other white-collar workers, who pay taxes. States have also found that they can impose modest taxes on the premiums collected by captives.

For insurers, these subsidiaries offer ways to unlock some of the money tied up in reserves, making millions available for dividends, acquisitions, bonuses and other projects. Three weeks after Aetna’s deal closed, the company announced it was increasing its dividend fifteenfold.

And as changes to the nation’s health systems are phased in, such innovations might even help hold down the cost of insurance for consumers, much as selling pooled mortgages to investors has made buying a home less expensive.

The downside, though, is that the states are offering a refuge from other states’ insurance rules, especially the all-important ones requiring companies to have sufficient reserves. California, for one, has already chosen not to try to lure such businesses. “We are concerned about systems that usher in less robust financial security and oversight,” said Dave Jones, the California insurance commissioner.

While saying that he wanted to remain open to innovation, Mr. Jones added, “We need to ensure that innovative transactions are not a strategy to drain value away from policyholders only to provide short-term enrichment to shareholders and investment bankers.”

The cost of some of the deals has been considerable. In 2008, MetLife used a subsidiary in Vermont to handle a crucial $3.5 billion letter of credit, with help from Deutsche Bank, because the subsidiary was not subject to the same collateral requirements as in New York. The trade immediately bolstered MetLife’s balance sheet, helping the company to endure that year’s market turmoil without government assistance. But MetLife agreed to pay Deutsche Bank $3.5 million a year for 15 years, according to internal documents obtained by The New York Times — locking itself into high costs for years.

MetLife said its transaction was in keeping with industry rules and norms, and Deutsche Bank declined to comment.

Another issue is public oversight. State regulators normally require insurance companies to make available reams of detailed information. A policyholder can find every asset in an insurer’s investment portfolio, for instance, or the company the carrier turns to for reinsurance. But not if the insurer relies on a captive. The new state laws make the audited financial statements of the captives confidential.