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Real Business : Autumn 2008
8 REAL BUSINESS AUTUMN 2008 GETTY Spoiling tactics in business are a little like those in sport. Consider those times when a footballer sees an opponent about to take possession of the ball, so knocks it out of their reach. In business, a competitor company can do just that when it sees a rival about to take over another business in the same playing field. The company will typically buy a stake in the target company that its competitor is trying to acquire, get itself on the board of that company, and then block the acquisition of it by its rival. The intention isn't to take over the images -- Diddy the playa/50 Cent the gangsta -- their approach to business is uncannily similar. So what is their secret, and what can we learn from them? Kevin Liles, himself a success story after rising from an intern at Def Jam Records to vice-president of Warner Music, provides hints in his book The Hip-Hop Generation Guide to Success (w w w.kevinliles.net). Between these pages he describes his 10 golden rules. Rule one says, "Find your will -- you will need that passion to drive you to make it happen against seemingly impossible odds." "Sometimes people may think that I have too much passion, you know?" Diddy told business news network CNBC in November 2007, echoing the rule. "You have to believe." Liles' rule two says: "Once you have found your will you have to package it and present it to the world." Diddy told NBC: "I take pride in my identity, representing success and aspiration. When people see me, I want them to see hard work, resilience." Likewise, Robert Greene's 48 Laws of Power (see w w w.powerseductionandwar.com) have become very popular among hip-hop artists. Clearly there are lessons to be learned from some hip-hop artists. We especially like the advice espoused by the Jungle Brothers: "If I worry too much about what I have not, I might not recognise just what I've got." Word. n HEADS UP THE WORD "RAP" WAS COINED ON THE ALBUM RAPPERS DELIGHT BY THE SUGAR HILL GANG AND BECAME THE PREFERRED TITLE FOR HIP-HOP RECORDING ARTISTS. iN The loop BY DIANA ELLIOTT WHY DO THEY DO THAT? SPOILING TACTICS target company itself, merely to prevent its competitor from doing so. Spoiling tactics typically occur in industries dominated by a small number of players, known as oligopoly markets, in which each participant is motivated to retain or expand its market share. The main oligopoly markets include mining, airlines, telecommunications, media and electricity. One of the most recent examples of spoiling tactics was in 2006, when cable TV broad- caster Virgin/NTL wanted to acquire ITV, the UK's largest independent television broad- caster. Murdoch's British Sky Broadcasting (BSkyB) bought a 17.9 per cent share in ITV and enough of a stake to block the acquisition attempt, and thwart Virgin/NTL's plans to compete for BSkyB's market share. In October 2007, Facebook founder Mark Zuckerberg sold a 1.6 per cent stake to Microsoft for $272 million, shrugging off rival bids from Google and Yahoo. Microsoft aggressively pursued the deal because it saw a way to lock Google out from acquiring even more market share in the online advertising space. Although some public companies may be frustrated that a spoiling bid means a A POTTED HISTORY HIP-HOP MANAGEMENT Hip-hop has created astonishing riches for a few skillful rhymers who've turned the gritty tales of their lives in to tasty records. The roots of hip-hop culture can be traced to block parties held in New York in the 1970s. Back then MCs began rapping over beats created by DJs, and an artform was born. What began as a frow ned-upon activity of ghetto youth eventually evolved into the cultural phenomenon and multi-billion dollar business it is today. And the most successful hip-hop artists/ entrepreneurs circa 2008 have translated their fame into lucrative entertainment empires. Curtis James Jackson III, a.k.a. 50 Cent, for instance, is fully loaded. Apart from an estimated 20 million-plus album sales thus far in his career, 50 Cent also licenses his G-Unit sneakers brand to Reebok, owns a successful clothing company, a video game, a condom line, and is involved in film. He made US$100 million selling his stake in a sports drink company. Sean John Combs -- you may know him as Diddy (or Puff Daddy, or P-Diddy) -- is estimat- ed to be worth over US$350 million. Diddy's interests include Bad Boy Records, two clothing lines, a movie company, restau- rants and a super-premium vodka brand. Although they have distinctly different BY ADAM CARSWELL 50 Cent: fully loaded NET GAINS Check out P Diddy talking about his management style and success in business at www.cnbc.com/id/19350718 NEWSPIX