CARLOS SLIM

MY INSPIRATION FOR THE DAY, 69 YEARS OLD ESTIMATED FORTUNE 35 BILLION WOW!!!!!!!!!!!!

NEW YORK. – What would you invest in right now if you were the wealthiest man in Mexico?

Certainly not a newspaper; especially when the industry is suffering massive layoffs and company closings due to rapidly diminished advertising revenues and circulation, increased competition from the Internet and television, and other calamities caused by the worst economic recession in over 50 years.

And yet, that is exactly what Carlos Slim, the Mexican billionaire and the third richest man in the world according to Forbes Magazine, did in January 2009, when he loaned $250 million dollars to the New York Times, the crown jewel of American journalism.

Carlos Slim

Carlos Slim
Carlos Slim Helú, the Mexican mogul, is considered the third richest man in the world according to Forbes magazine. Slim’s fortune is estimated in $35 billion. Slim, 69 years old, was born in Mexico to Lebanese par ents.
Besides becoming the largest creditor of that company, Mr. Slim – with a fortune estimated at $35 billion dollars – secured warrants of 15.9 million shares, which if converted, would position him as the single largest shareholder of the Times Company.

Mr. Slim’s investment shook the financial and business community in New York which for months has asked a simple question. Why would the Mexican tycoon be interested in that kind of business, one that is under such pressure?

To wit, three days ago, Bob Arum, the legendary boxing promoter, slapped the New York Times down, for not covering one of his events at Madison Square Garden. During a news conference, Mr. Arum said that boxing is a healthy sport, that almost all the tickets were sold and that they did not need the help of a Mexican magnate Carlos Slim to rescue them.

So, why did Slim invest in The New York Times? Power, vanity, influence, dreams? Or perhaps, from a profitable business perspective that has not yet been understood?

Carlos Slim was born in Mexico City into a caring and tight-knit family of Lebanese immigrants, who prospered through hard work, luck and good business contacts. His public image has always been controversial, ranging from being a captain of industry loves his country, the simple life and mathematics, to that of the corrupt robber baron who builds on “crony capitalism” to aggressively seek profits everywhere.

He owns and controls more than 200 companies that m anage and sell just about everything, from bread to iPhones, toys to music and books, restaurants and real estate. Mr. Slim’s holdings are in Mexican cement and tobacco industries, as well as international banks and retailers such as Sears and Saks Fifth Avenue

His flagship companies are Telmex and Telcel, the giant phone companies that control most of the land and cellular lines in Mexico, and their powerful spin off , America Móvil, that dominates the cellular market in vast parts of South and Central America.

In many aspects, Mr. Slim often seems to own the Mexican economy. It has been said that it is not possible to live in Mexico without spending at least one dollar a day across his empire. And according to a recent profile done by the New Yorker magazine, nobody in modern times, not Rockefeller or Gates, can match the grip he has on the wealth and spending of an entire country as Slim does with Mexico.

Yet, with all his wealth, Mr. Slim lives modestly, owning only one house where he lives with his youngest son, and uses American SUVs that he enjoys to drive around town. He has been married only once, to Soumaya Domit de Slim, who passed away in 1999.

An engineer by trade, and schooled in the family business since he was born, he does not use a computer and=2 0loves numbers and metrics. In interviews with U.S. correspondents, Slim enjoys bragging about his love of baseball and his great recollection of the sport’s stats and figures. Since 2000, Mr. Slim has redoubled his charitable efforts, focusing on the revitalization of Mexico City’s historic center, as well as leading the $10 billion Latin America Development Fund which supports cultural projects across Latin America.

But his name is synonymous with wealth and capitalism. Mr. Slim is despised by critics who perceive him as a cutthroat rival who does everything possible to deny the rise of competitors.His supporters note his mastery of business strategy and tactics, and his focus on business as a true calling.

These supporters cite the business savvy displayed when he pocketed close to $600 million dollars in 2005 from selling his stake in MCI to Verizon. Slim had invested $300 million in fire-sale bonds as MCI went into bankruptcy pr otection following a huge accounting scandal. As it emerged from bankruptcy, the bonds were converted into shares which with the valuation provided by Verizon’s offer for MCI’s assets, netted the tycoon a tremendous profit.

But for his competitors like the global telecommunications company, Telefónica of Spain which has been entrenched in legal and competition battles with Slim in México and all over Latin America, Slim’s actions are the signs of a monopolist who’s goal is to completely control markets and crush all competition.

Telefónica first went up against the Mexican magnate when they entered the Mexican mobile phone market, pricing their phones and services lower than Mr. Slim’s company, Telcel in order to gain market share. At first, Telefonica was seeing great sales of the phones but poor usage or subscriptions to their services.

After months of investigating, they discovered that affiliates of Telmex were buying the mobile phones, changing the service chips to Telcel and re-selling the phones for only a little more than what Telefonica was offering. Customers were getting newer, cheaper phone models but backed by the leading company services, letting Telefonica’s marketing expenditures drive customers to Telcel and depriving Telefonica of the revenues from the subscriptions and service plans.

Since that opening salvo, Telefonica has also fought an expensive battle to leverage consumer and market demands to open the land line phone market in Mexico, facing Telmex’s deep pockets and legions of lobbyists and lawyers intent on keeping Telmex dominant position intact.

In the past few years, a new wrinkle has developed as the telco’s have been joined by cable operators, communications technology providers and entrenched media companies in targeting the next generation of services: the “triple play” combination of voice, data and content services delivered in one package.

This new market has brought formidable competitors to the table, including Televisa, the dominant media company in Mexico, whose relationships across government, business and society are as deep and powerful as those of Carlos Slim.

By law, Telmex is unable to provide ‘triple play’ services, but they are certainly interested in changing those laws and it is speculated to be only a matter of time. At that point, Slim’s affiliation with Microsoft via their Prodigy MSN venture can provide another piece to the puzzle as he pursues additional media and content partners that will add value to the ‘triple play’ services he seeks to20provide.

When recently asked why he thinks the New York Times is a good investment, the Mexican billionaire that has made fortunes in distressed industries that provide steady cash flows answered:

“We think it’s the best newspaper,” he said. “We believe in media content. We think paper will disappear, but not the content. The content will become more important.”