Posts Tagged ‘New York Times’

Merger Madness: Yahoo-Microsoft-AOL-FIM-???

April 10, 2008

OK, this is getting ridiculous. Today, the race to acquire Yahoo! has become perhaps the weirdest merger contest in the history of the technology industry.

Consider the day’s string of increasingly absurd leaks, er, I mean reports about Yahoo’s activities. First, this afternoon Yahoo! announced it would begin a limited two-week test of Google’s search technology on the U.S. version of Yahoo.com. Then, this evening at 10:35 pm EST, the Wall Street Journal reported that Yahoo and AOL were “closing in on a deal to combine their Internet operations.”

Not be to be outdone, the New York Times reported minutes later that “News Corp. is in talks with Microsoft about joining in its contested bid for Yahoo,” proposing a deal to join Yahoo, Microsoft’s MSN and News Corp’s Fox Interactive Media division, home of the MySpace social network. (If the story wasn’t penned by the usually reliable Andrew Sorkin, it would be laughable.)

Here’s my take: Yahoo is getting increasingly desperate. After Steve Ballmer issued a three-week ultimatum to Yahoo on Sunday April 5, Yahoo realized its needed to break out all the stops to either a) get a sweetened offer from Microsoft or b) strike a deal of comparable value that avoids getting co-opted by the Evil Empire in Redmond.

The announcement to outsource a miniscule amount of its search inventory smacked of last-minute desperation. (I like Silicon Alley Insider but I totally disagree with Henry Blodget that this was a “brilliant move.”) Even if the test improved the effectiveness of Yahoo’s search results (which is no slam dunk), there’s no guarantee Yahoo would outsource enough of its inventory to produce a material return. In its press release Yahoo went out of its way to stress the transient nature of the deal, saying “the testing does not necessarily mean that Yahoo! will join the AdSense for Search program or that any further commercial relationship with Google will result.”

The deal talks are a whole other matter. But let’s be clear: These are not superior proposals. Still, even if the deals are inferior (i.e. Yahoo would be much better off merging with Microsoft than the much smaller and weaker AOL, to say nothing of the deal’s antitrust issues), or just off-the-wall (adding MySpace to an already complicated Microsoft-Yahoo combination seems like a one-way express ticket to merger hell), they give Yahoo leverage in its talks with Microsoft. More suitors, however unattractive they are, create the impression of enhanced value (it would be interesting to know the valuation that these deals give to Yahoo). So give Jerry Yang & Co. credit for being shrewd enough to lure AOL and News Corp onto the dance floor.

I said in the beginning of this process that Microsoft would have to sweeten its offer. Lately, as Ballmer & Co. showed increasing signs of aggressiveness and the unimpressiveness of Yahoo’s future plans began to materialize, I began to question myself. But Yahoo’s shucking and jiving today makes me think it just might happen.

SXSW: Has Southby Sold Out? (and book reading post-mortem)

March 15, 2008

In the last two days, the Wall Street Journal and the New York Times have both run front page stories about Austin’s South by Southwest Festival, known as “Southby” to festival aficianados. The Journal story reported on the rising influence of corporations at the music part of the festival–and the consequential crackdown by festival organizers on private, invite-only corporate parties that violate the open access ethos of SXSW.

Long-time music critic Jon Pareles has a different take in today’s NYT. On the contrary, Pareles notes the declining influence of the major record labels (i.e. the corporations) on the music industry. SXSW, he reports, “is full of people seeking ways to route their careers around what’s left of the major recording companies.”

“Major labels used to help create stars through promotion and publicity, but their role has been shrinking,” writes Pareles. “Multimillion-selling musicians who have fulfilled their major-label contracts — Radiohead, the Eagles, Nine Inch Nails — are deserting those companies, choosing to be free agents rather than assets for the system that made them famous.”

I have not had the pleasure of attending the music part of Southyby. I barely survived three days at the non-stop Interactive segment. But I have to say that I was pleasantly surprised to find hardly any sign of corporate influence at SXSW Interactive. Heck, Facebook was the biggest show in town and their CEO is known to wear flip flops and T-Shirts to the office.

Southby is sort of like the anti-CES. It’s not about being overwhelmed by a blizzard of press releases and product announcements or marketing shlock. It’s about the conversation, about exchanging ideas and inspiration with like-minded creative folks down in the trenches. Think TED with an indie bent.

While I was in Austin for three days, I played a game to prove this point: I called it the find-the-man-in-the-suit-and-tie game. Before I arrived, I had heard complaints about the growing role of “suits” at SXSW. So for three days I searched for someone wearing a suit and tie. I found not one. I didn’t even find one single soul sporting a suit, let alone a tie. Instead, I saw an endless stream of cool young people dressed in jeans, T-Shirts, dress shirts and hoodies, with the occassional rebel donning a sport jacket.

Confession: I actually brought a suit to Austin (no tie though). Since I was giving the debut reading of my book and I had never been to the festival before, I decided to play it safe and bring one. Roaming the convention center, I quickly realized, it was as if I had brought a bathing suit to Alaska. The suit never saw the light of day.

Book B&N

I ended up wearing the Southby uniform–jeans and a long-sleeve shirt. The reading went pretty well, though I made a few mistakes. The biggest? I chose too many stories to read, didn’t pick all of the right ones, and underestimated the time it would take to read them. The result was that I raced through the end of the talk and left no time for Q&A. Doh!

Next reading I will pare down the number of stories and tailor their selection more tightly to the audience. Another cool part of SXSW was that Barnes & Noble set up a portable book store in the trade show area of the conference. Here’s a photo of my book for sale. I feel proud to be sandwiched between best-selling authors Bill McKibben and Timothy Ferriss. I hope their pixie dust rubs off on me.

HOW TO BUY CREATIVE CAPITAL: To pre-order Creative Capital and get a 34% discount, click here and go to Amazon

Zuckerberg: Being a CEO is “Hard”–enter Google’s Sheryl Sandberg

March 5, 2008

Yesterday, Facebook announced the hire of a new chief operating officer, Google vp Sheryl Sandberg. The New York Times, which buried the story on p. 6 of the Business Section, argued that Facebook’s 23-year-old CEO Mark Zuckerberg was “following the Bill Gates model and holding the top post.”

But you have to wonder how long Zuckerberg will follow the Gates model. He clearly wants to hold on to the reins and he may grow into the role of being a true CEO. But my gut tells me that the company and its investors will bring in a more seasoned exec to take the company public, if and when it goes public. Sandberg, while highly respected and successful, has never been a CEO before and has never taken a company public. And with so much at stake, you’d think the company would want to have someone in the role who’s done it before.

The Wall Street Journal, which gave the story huge play on p. 1, got Zuckerberg to admit that the CEO job “is hard.” Last December, the Journal’s Vauhini Vara reported that Zuckerberg held a meeting with Roger McNamee, a powerful Silicon Valley investor who Zuckerberg considers to be a mentor. During the meeting, Zuckerberg complained about the pressures he felt as a CEO, asking McNamee: “Is being a CEO always this hard.”

That one admission is another sign that Zuckerberg, however brilliant he is as a technologist and visionary, is probably not up to the task of running a multi-billion company with thousands of employees. What did he expect? That management would be any easier than slinging code? The comment just sounds naive.

I see Sandberg’s hire as more of a replacement upgrade for Facebook’s previous COO, Owen Van Natta, who recently left the company to pursue opportunities as a chief executive somewhere else. Van Natta was a former Amazon exec, and he did a fine job helping to grow the company and build a great brand. But Sandberg, the vp for Google’s global online sales and operations, is the perfect person to take the company to where it needs to go next–to create a advertising and marketing model that scales into the billions of dollars.

HOW TO BUY CREATIVE CAPITAL: To pre-order Creative Capital and get a 34% discount, click here and go to Amazon

Reader Mail: Did DEC hire a PR firm and run a campaign against IBM?

February 20, 2008

Yesterday, a former assistant managing editor of BusinessWeek who ran our overseas bureaus, Robert Dowling, was kind enough to post a comment on the blog about the development of Digital Equipment Corp. I bumped into Bob a few weeks ago at an event for the Asia Society. I was pleasantly shocked when he told me he actually moved to China, where he is serving as an editorial advisor to Caijing Magazine, the top business mag in China from what I hear.

In many ways, blogs are all about reader and writer interaction. So I am going to start a new feature today called “Reader Mail.” From time to time, I will post a good question by a reader and then answer it.

Bob asks: 

“Hi Spencer:
Congrats on the book and blog. That’s an interesting and unexpected angle on DEC, and the VC community. I wonder what behaviors, typical of VC-backed start-ups, did DEC exhibit in those early days? For example, did they hire a PR firm and run a competitive campaign for share of voice against IBM?
Best,
Dowling”

spencerante says:

As far as I know, DEC was not a big user of PR firms. But the company was very savvy in its use of public relations–a lot of which came from General Doriot.

Every spring, Doriot held an annual meeting for American Research & Development. At the meeting, Doriot always organized an exhibit of ARD’s portofolio companies, where they could show off their products to the public and the press. Doriot also encouraged entrepreneurs to use the annual meeting as an opportunity to make important announcements.

The events were always well attended and often generated lots of ink and coverage. BusinessWeek, in fact, ran many stories that came out the event.  It was sort of the first high-tech trade show in a sense and was very innovative for its time.

Here’s a bit from my book about the meetings and their impact. It is based on the 1952 annual meeting, when the New York Times wrote a page one story about Ionics, a water purification company financed by ARD.

“At the end of the meeting, MIT Chemical Engineering Professor Gilliland stood up behind a podium and announced a startling new development. Gilliland, who doubled as the president of Ionics, demonstrated the company’s new membrane that desalinated seawater more cheaply than any other existing technology. The demo and related testimony by Dr. Compton and Harvard chemistry professor and Ionics director Arthur B. Lamb was so compelling that the New York Times published a page one story about the development: “New Process Desalts Seawater; Promises to Help Arid Areas.” The story written by William L. Laurence hailed a “revolutionary new process for desalting seawater” that promised to “open up vast new reservoirs of fresh water for use in agriculture, industry and the home wherever water is now scarce.”

The page one scoop was a coup for both ARD and Ionics, generating publicity and contracts for the new company. After it came out, Senator Flanders received a visit from Sheridan Downey, a former U.S. Senator from California. Downey, who was representing the city of Long Beach, said he was “tremendously interested in the announcement” and expressed a desire to jump-start the first field trials of the technology for the city. Senator Flanders arranged for Downey to speak with Ionics cofounder and vice president Walter Juda. The meetings eventually led to one of Ionics’s first commercial contracts. In the mid-1950s, the town of Coalinga, California purchased a system from Ionics, replacing the water supply it formerly brought in by railway.”


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