Case Study: A Content Company Weighs Becoming a Technology Company

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After Leaving Office, Bloomberg Is More Hands-On at Old Company

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States shouldn’t be allowed to register anonymous shell companies, which can be used for tax evasion and other bad deeds.

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Corner Office: Francisco D’Souza of Cognizant, on Finding Company Heroes

Q. What were some early lessons for you?

A. I was very fortunate in my upbringing. My father was a diplomat, and so, until I was 18, we traveled to a new country every three years. After finishing high school in the Caribbean, I wound up in Hong Kong when I was 18. We realized that there were few universities that taught in English, and so I went to one in Macau that focused on working professionals. I went to school at night and on weekends.

My days were free, and I got a job as a bank teller. It was a small bank, and they still used a punch-card system. I had taught myself as a teenager how to program. I went to the branch manager and told him he ought to consider new technology. He said: “Fine. Help me figure it out.” We bought a computer. We wrote the software, and I wound up supervising a couple of people when I was 19.

Q. I can imagine that some kids would resent moving to a new country every three years.

A. I was somewhat indifferent to it because I expected it, and I knew nothing else. In hindsight, I wouldn’t do it any other way. It really did shape who I am today.

Q. In what sense?

A. We learned how to love the world. There’s this great richness of diversity, yet people are far more similar than they are different. You’re not as likely to learn that when you grow up in one town, in one environment, in one culture or in one country.

The second thing is that it was an environment of scarcity in many ways, because my parents weren’t particularly affluent. You learn how to find opportunities where they don’t exist and capitalize on them. You have to find ways to make the most of everything, from the littlest things to the biggest.

Q. What are some leadership lessons you’ve learned during your career?

A. We started Cognizant in 1994, and there was a period early on when I personally knew everyone in the company. Now we have 160,000 employees, and there were several personal and rapid transitions over that time.

The lesson I learned is that when you have to evolve that quickly as a person, you need to be aware of two things. One is personal blind spots and the other is personal comfort zones. Those two things can be real gotchas.

It’s very hard to see your blind spots, by definition, and it’s very easy to fall into comfort zones, because people like patterns and a sense of familiarity. I’ve tried consciously to say, “What are the tools I can use to identify these blind spots and push through comfort zones?” And I always tell myself that if I wake up in the morning and feel comfortable, I’m probably not pushing myself hard enough.

Q. And what are the tools to help you see your blind spots?

A. One is just talking to other leaders. The conversations with them help me because they are, in a sense, a mirror — I can assess what I think they’re doing well, and where I think their blind spots are. It’s easier to see someone else’s blind spots than it is to see your own, of course, and you can use that to reflect on what your own blind spots are.

I also learned a lot from the people who work for me. Before I took over as C.E.O. in 2007, the board gave me the benefit of some time. I worked with a coach for a while, and he talked to about 20 people who worked for me, above me and around me, and to my board. It was difficult feedback, but very enlightening. That helped me identify a couple of my blind spots.

Q. Can you share one?

A. There was a lot of feedback from my team that people had confidence in my ability, but they also said that when I criticize something they’ve done, the weight of that is very pronounced and significant. It made me understand that the weight of my words was a lot heavier than I gave myself credit for, and it led me to be much more thoughtful and measured in how I give feedback.

Q. What’s unusual about your culture?

A. We’ve organized the company in a way to make sure that we continuously delegate and empower people on the front lines. As we got bigger, we would take larger units and break them down into smaller units and give individuals a sense of ownership, creating very clear success metrics around those individuals.

But when you decentralize and empower, you have to make sure you don’t wind up with lots of microcultures, because every leader, every manager, puts his or her stamp on the culture. Culture gets passed along not by writing it down, but through the rituals you have in the organization, the legends you refer to, and the heroes of the organization. So we institutionalized a set of things to create rituals, heroes and legends.

For example, we have a tradition of naming the associate of the year — we use a process in each region to find the single associate who contributed well above and beyond and, through his or her actions, exhibited the traits of the culture that we thought were important. We similarly institutionalized a ritual that we called the project of the year. And we rent stadiums around the world and bring all the employees and their families for a celebration, with entertainment and awards.

Q. How do you hire?

A. I’m looking for passion. The person I’m hiring needs to have passion for what they’re doing, and they need to understand where that passion comes from. They need to be in touch with that. You need to know what drives you.

And you need somebody who’s got just raw smarts and talent and an innate ability to learn. Because the thing about functional expertise is that unless you’re in some very specific area, almost everything that we need to do our job becomes obsolete quickly, and the half-life of knowledge is becoming shorter and shorter. So do you have the personal agility to continuously renew those skills, to reinvent yourself?

Bits Blog: Twitter General Counsel Leaves as Company Prepares to Go Public

Business Briefing | Company News: Early Date Set for U.S. Suit to Block Airlines’ Merger

The Egyptian authorities are spinning conspiracy theories to intimidate dissenters and rally the public.

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Merger Is Set To Create World’s No. 1 Ad Company

The two announced a merger on Sunday that would create the world’s biggest family of agencies, with a stock market value of $35.1 billion and more than 130,000 employees.

In the early going at least, the new Publicis Omnicom Group would have co-chief executives: John D. Wren of Omnicom, based in New York, and Maurice Lévy of Publicis, based in Paris. But after 30 months, Mr. Wren, who is 60, would become sole chief executive and Mr. Lévy, 71, would be nonexecutive chairman.

On Sunday, Mr. Lévy and Mr. Wren said their deal sprung from a casual conversation six months ago during a social encounter. Then on further reflection, Mr. Lévy joked, “it looked like it was not that stupid after all.”

If the merger passes muster with shareholders and government officials, the new conglomerate’s combined revenues, which totaled about $23 billion last year, would be far greater than the $16 billion in revenues for WPP of London, the current industry leader.

Publicis is considered a French national champion, and French officials have been active during President François Hollande’s tenure about protecting its business icons from foreign dominance. It was not immediately clear what position Mr. Hollande’s government might take on the merger. Calls to Élysée Palace over the weekend were not returned.

At a news conference, Mr. Lévy said the companies informed the French government of their plans on Saturday and had received “tremendous support” from officials. “We are not owned by the French government,” Mr. Lévy said, “yet we are one of the iconic companies in France.”

He said that the combined companies wanted a neutral third country as the place to register the new holding company. They ruled out Ireland and Luxembourg, Mr. Lévy said, to avoid the appearance that they were seeking a tax haven. They chose the Netherlands — which at 25 percent has a nominal corporate income tax rate that is higher than Ireland’s and Luxembourg’s, but below the 33.33 percent rate in France and the 40 percent rate in the United States, according to the global accounting firm KPMG. Mr. Lévy said the companies would keep their headquarters in both Paris and New York to avoid the impression that Publicis would be “swallowed” by an American company — something that he said would not be accepted in France.

In a statement, Mr. Lévy cited technological advancements in advertising and the rise of so-called Big Data — the ability to amass larger volumes of consumer information and make money from it in various ways — as reasons for the merger.

“The communication and marketing landscape has undergone dramatic changes in recent years including the exponential development of new media giants, the explosion of Big Data, blurring of the roles of all players and profound changes in consumer behavior,” he said. “This evolution has created both great challenges and tremendous opportunities for clients. John and I have conceived this merger to benefit our clients by bringing together the most comprehensive offering of analog and digital services.”

Mr. Wren also stressed the importance of digital technology to advertising’s future. “Everything three years from now is going to be digital,” he said. “Everything that we do, even billboards nowadays are digital or become digital.”

The merger would bring under one roof separate networks of ad agencies — including BBDO, TBWA and DDB under Omnicom, and Leo Burnett and Saatchi & Saatchi under Publicis. Collectively, the conglomerates represent some of the world’s largest brands, including AT&T, Visa and Pepsi at Omnicom and McDonald’s, Coca-Cola and Walmart at Publicis.

Shareholders of each company will hold 50 percent of the equity in the new company, which will be listed on the New York Stock Exchange, Euronext Paris and included in the Standard & Poor’s 500-stock index and the CAC 40 in Paris. A single board of directors will include Mr. Wren and Mr. Lévy and seven representatives from each of the two merging companies.

The executives said that they hoped the deal would be completed later this year, or early next year, depending on the regulatory approvals.

At least one competitor was willing to comment on Sunday — if only to deride the merger strategy. David Jones, the chief executive of Havas, a competing French advertising holding company, referred the deal as “an industrial merger in the digital age.”

“Clients today want us to be faster, more agile, more nimble and more entrepreneurial — not bigger and more bureaucratic and more complex,” Mr. Jones said in a statement.

Mr. Jones said the advertising industry’s “obsession with mergers and acquisitions” was out of sync with how the other technology companies operate. “The industry’s obsession with mergers and acquisitions still amazes me particularly in a world where digital and technology have made scale irrelevant.”

He noted that the photo-sharing service Instagram has 32 employees, but 140 million users. Facebook, he said, has but 5,000 employees supporting one billion users. “In a people business, mergers and acquisitions rarely create value in the way they do in industrial businesses,” Mr. Jones said.

Earlier this year, France’s industrial renewal minister, Arnaud Montebourg, scuttled a deal by Yahoo to take a 75 percent stake in DailyMotion, a French Web video start-up in which the government holds a 27 percent share. Warning that Yahoo would “devour” DailyMotion, he insisted that Yahoo reduce its stake to 50 percent, causing Yahoo to walk away.

But Mr. Lévy might be in a better position to finesse any government resistance to the loss of a national icon. He is one of the best-connected businessmen in France and has cultivated relationships with each administration since he joined Publicis in 1987.

Despite his clout, Mr. Lévy has been a polarizing figure to the French public, coming under fire for receiving multimillion-euro pay packages that are among the highest of any French executive. His pay — 16 million euros last year — was a flash point during the 2012 presidential elections, when Mr. Hollande slammed what he called excessive executive pay and called on the rich to pay more taxes.

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Bits Blog: Coursera, an Online Education Company, Raises Another $43 Million

Ramin Rahimian for The New York Times Daphne Koller, a co-founder of Coursera, at the company’s offices in Mountain View, Calif. Over the next few months, Coursera plans to double its employees to about 100.

Coursera, a year-old company offering free online courses, has raised another $43 million in venture capital from investors active in both domestic and international education.

The new investors include the International Finance Corporation, the investment arm of the World Bank, and Laureate Education, an international higher education company with dozens of profit-making universities around the world, as well as GSV Capital, Learn Capital and Yuri Milner, an individual entrepreneur.

“We hope it’s enough money to get us to profitability,’’ said Daphne Koller, a co-founder of Coursera. “We haven’t really focused yet on when that might be.’’

Coursera, based in Mountain View, Calif., previously raised $22 million from Kleiner Perkins Caufield & Byers; New Enterprise Associates; and the University of Pennsylvania and California Institute of Technology, two of its university partners.

Over the next few months, Coursera plans to double its employees to about 100, and expand in several areas, including mobile apps and its Signature Track offerings, which charge a fee to students who want an identity-verified certificate upon successful completion of Coursera’s free courses. Since January, when the Signature Track option was first offered in five courses, Signature Track fees have produced more than $800,000, Ms. Koller said — and in the long run, she said, such revenue may be enough to make the company sustainable.

The company also plans to invest in international expansion, through localization, translation and distribution partnerships, and techniques for blended learning, in which Coursera’s online materials are used alongside classroom sessions with a professor.

“We see great potential for using some of the Coursera materials in our universities, so there is a strategic element to this investment,’’ said Douglas L. Becker, chairman and chief executive officer of Laureate. “The I.F.C. made the largest education investment they ever made in Laureate, and they’re joining us in this investment. Coursera allows us to invest in something we see as a rising technology impacting higher education, and gives us access to their content and curriculum.”

Coursera has grown with stunning speed since it began in April 2012, with four university partners. Now, the company works with 83 educational institutions on four continents, offering about 400 free college-level courses to more than four million students from every country in the world.

But after the initial burst of enthusiasm last year about massive open online courses, or MOOCs, and their potential for democratizing higher education worldwide, this year has brought some pushback. Faculty members at several institutions have expressed concern about how the courses may change higher education, how quickly university administrators signed on to work with MOOC providers, and whether the aim is more to save money than improve the quality of education.

So far, most of the students who have completed Coursera MOOCs have been college graduates, and it is still unclear how well the format will work to help students without degrees earn college credit for their online work. Coursera has recently started to market its materials for use by public universities in blended on-campus classes. Universities that use the materials will pay licensing fees, which Coursera will share with the universities that produce the courses.

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At Melissa & Doug Toy Company, Thriving on the Basics

ESTHER BERNSTEIN, 6 years old with long blond hair, pulled on a pair of blue slippers with a gray tassel over the toe. She grinned.

“Look, Mom! I like these princess slippers!”

“Would you wear them to play dress-up?” her mother asked.

“Yes.”

Esther’s 9-year-old sister, Sydelle, grimaced and freely offered that she would not.

“Well, Sydelle, you’re too old for this toy,” her mother said. “You’re not the target market.”

It was a Sunday night, after dinner, at the informal in-home testing lab of Melissa and Doug Bernstein, better known as Melissa & Doug, the toy company and the signature that adorns all their products. This August, their company will turn 25, celebrating a quarter-century of anachronism. In a time when major corporations dominate the industry, making toys with all manner of batteries, digital gimmicks or movie tie-ins, the Bernsteins keep making money in wooden puzzles, coloring pads, blocks, trains and simple costumes (the police officer, the princess, the pirate). They hatch many of their ideas by watching children at play — often among their own brood of six.

From left are Sydelle, 9, Nate, 5, and Esther, 6.

They do little public relations and don’t advertise in magazines, or on radio and television. They don’t put coupons in Sunday newspaper inserts. They don’t rely on big hits, industry analysts say, just a steady stream of variations on classic toys mostly for children up to the age of 5. Nonetheless, their business has grown by double digits every year, to an estimated $325 million in revenue this year from $100 million in 2008 (and to 650 employees from 200), according to a toy company executive familiar with the company’s operations. Such figures make theirs a midsize toy business, of which analysts say there are fewer and fewer these days. In this industry, three huge players — Mattel, Hasbro and Lego — account for around $14 billion in sales, or about a third of global toy company revenue.

The Bernsteins have come a long way from the days when they drove a Chevrolet Malibu, owned by Mr. Bernstein’s father, to deliver products. Growing up in Westport, Conn., an affluent community, Mr. Bernstein, now 50, thought himself the poorest kid, living in a 900-square-foot house. Now their home is 36,000 square feet, one of the biggest in the same township, with hand-chiseled stone and antique ceiling beams — not to mention a bowling alley, an indoor full-court gym and a video arcade.

But they are, as Mrs. Bernstein, 47, puts it, restless, very restless — and challenges are upon them in an industry that, like so many others, is being rewritten in the technology age. Overall toy sales have slumped. Some specialty retailers have closed. Low-cost manufacturing has commoditized many items. But Internet sales have soared, meaning that the Bernsteins are having to adapt to online sales and marketing after years of building relationships with specialty stores.

Crucially, the rise of high-tech entertainment has changed how children play. Apps and video games have soared in popularity; on Amazon, you can even buy an iPod stand to accompany a potty trainer. The phenomenon can provoke conflicting feelings in parents. Should they give in to children’s yearnings for a phone app or video game? Or limit the screen time and offer up something simpler and more nostalgic, reminiscent of a childhood real or imagined?

The topic of traditional versus high-technology toys is one that particularly piques Mrs. Bernstein. “When you’re using a computer or an app, it’s giving you all the information you need,” she said. “It’s a completely reactive experience.” But she thinks she knows why that is so appealing. “Parents are so scared of having their kids say, ‘I’m bored.’ It’s synonymous with, ‘I’m a bad parent,’ and so they never allow kids to feel boredom, which equals frustration, and so kids don’t get to the point where they have to dig deeper and figure out what to do.”

Plenty of toy companies have joined Melissa & Doug in this niche, competitors whose simple offerings aim to entertain — but not too much. Companies like Haba, which makes blocks and wooden toys from sustainable woods, or Alex, which makes arts and crafts for “active fun.” But few companies can reach the size of the Melissa & Doug operation without facing a tough decision: Do you keep trying to expand on your own, pushing into larger retailers, or do you sell to a major toy maker?

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Occidental Chairman Irani Agrees to Leave Company

The decision, announced at the company’s annual meeting, was the climax of a brutal boardroom struggle between Mr. Irani and Stephen I. Chazen, the chief executive during the last two years, over leadership and direction of the company. Earlier this week, the Occidental board bowed to investor pressure by announcing that Mr. Chazen would continue to serve in his position through the end of 2014 and help find a successor.

The company announced that Edward P. Djererjian, a former ambassador in the Middle East who has served as an independent director since 1996, will assume the role of independent chairman of the board, and that former Energy Secretary Spencer Abraham will become the independent vice chairmen. Both were elected by the board.

Mr. Irani has been chairman of Occidental since 1990, and many observers of the company believed he had been maneuvering to remove Mr. Chazen and retake the post of chief executive. He did not attend the shareholder meeting, held in Santa Monica, Calif.

Mr. Irani, 78, took over the Los Angeles-based company from Armand Hammer and stretched its reach across the Middle East, including Iraq, Oman and the United Arab Emirates. But he angered many investors by rewarding himself and some of his most senior executives with pay packages that were outsize even by the generous standards of large oil companies. Shareholders forced him to step down as chief executive two years ago.

Mr. Irani will be eligible for a severance payment of $38 million, which includes a life insurance payout, and additional annual payments of more than $2 million.

In recent years, Mr. Chazen tried to turn the company’s focus toward domestic oil fields to take advantage of the shale oil boom, but the financial results of his approach did not satisfy Mr. Irani. Occidental’s stock price has lagged those of competitors.

The shareholders had voted against Mr. Irani’s retention as chairman by more than 3 to 1.

“This means Chazen is really in charge until his time is up next year,” said Philip H. Weiss, a senior energy analyst at Argus Research. “This ends the battle at the top and clears a path for new leadership.”

In another sign of change, Aziz D. Syriani, the lead independent director, submitted his resignation. Mr. Syriani is the chief executive of the Olayan Group, a global trading and investment company, who received stock and cash worth $879,000 last year as an Occidental board member.

The developments were welcomed by activist investors who wanted Mr. Irani to retire.

“I am happy and cautiously optimistic but the devil’s in the details,” said Steven Romick, a managing partner of First Pacific Advisors and overseer of the $11 billion FPA Crescent fund, who attended the annual meeting. He said he hoped the company would now restructure its compensation policies for the board and senior management, and he was open to the possibility that Mr. Chazen might stay in his position longer.

Mr. Chazen is 66, two years younger than the new retirement age set for the chief executive just this week by the board.

Mr. Romick added, drawing a clear distinction with Mr. Irani’s direction, “My preference would be to be very circumspect about the Middle East.”

In February, Occidental surprised investors when it announced that it was creating a search committee to replace Mr. Chazen as chief executive. Fear spread among some investors that Mr. Irani was trying to put off his retirement and even return to his old post as chief executive. That stirred a revolt by the California State Teachers’ Retirement System and other shareholder activists who came out in favor of Mr. Chazen. They were supported by many Wall Street analysts who have complained that the company under Mr. Irani was often secretive.

Mr. Chazen, who previously served as chief financial officer, won the support of many investors because he was viewed as a smart allocator of capital and efficient manager of new projects.

Institutional Shareholder Services, the influential proxy adviser, had recommended that shareholders refuse to re-elect Mr. Irani or Mr. Syriani.

Penn State Settles Trademark Case Against Stadium-Area Rental Company

Penn State has confidentially settled a trademark infringement action it brought in January against real-estate companies that provide rental housing to people attending the school's football games.