Evening reflection by matey_88

With all the news swirling around lately, it feels to me that we’ve lost a little bit of perspective.  It could be international relations, the stock market or the economy just to name a few, all very important things that affect our lives and life on a global scale. The economy is not the greatest right now.  We’ve witnessed over the past few months some of the worst corruption and corporate negligence on very large scales.  But does that mean everything should be put under the microscope, that everything is wrong rather than the other way around?

Let’s take two of the bigger stories in the tech industry of late: Yahoo! and Steve Jobs.  (I could argue these are not the two biggest things going on but they certainly are driving a large portion of the media coverage)

Yahoo! has been under the microscope for some time now.  And yes, an offer from Microsoft at $33 per share is looking pretty compelling when you look at where the stock is today.  But let’s not lose sight of what is good.  Yahoo! has $7B in revenue, is a known brand and has a number of category leading products. Last time I checked, that is pretty good.

The story with regard to Jobs’ health I find more concerning.  I’m a shareholder in Apple but I don’t think it is my right to probe into the health of an executive.  There is no correlation between Jobs’ health and bad company performance.  So the ‘conspiracy theory’ swirling around this (even if Apple could have been more forthright) just doesn’t deserve this much negative attention.  Because we’ve been burned by poor corporate governance in several situations should not mean that is the litmus test on how we handle all questionable story lines.  In fact, Kara Swisher has what I believe to be a great post with regard to Steve Jobs today over at Boomtown, particularly the transcript of Job’s speech at Stanford.  It is about perspective and a bit of reflection, even in cloudy times, and driving forward from there (that’s what I took from it).

I don’t plan to jump into philosophy here so I won’t.  My sense is everything has reached this point of “permanence”, that all is bad right now and is being looked at with that lens.  With that there’s been some loss of perspective, some loss of reflection on what is really important. Tim O’Reilly recently posted his thoughts on what matters.  I agree with much of what he said.

I’m confident that things are going to look up.  It is going to take some time.  I know one thing though, that it starts with a positive look on things, a look at the things that are important and a passionate drive forward from there.  Just a quick glance back at the innovation that came out of the first bubble burst tells us that is true.  And that is what is at the heart of the entrepreneurial spirit after all.

Related articles by Zemanta

• Anyone Still Remembers Steve Jobs Is Human?
• Apple still has a credibility problem
• A tale of two tech companies: Apple & Yahoo

The hot news of the day is Carol Bartz being the choice for CEO over at Yahoo! There is plenty of coverage out there about the news.  It seems from everything that I’ve read and how the markets have reacted that the choice is not a popular one.  My two cents on the subject is that we should take a step back and give Bartz a chance to assess the Yahoo! landscape, make some decisions and begin to re-align Yahoo! on the determined course and strategy.  I made some early comments on this over at TechCrunch.

Yahoo! has a tremendous number of assets and really smart people.  Products ranging from search to delicious to flickr all can be knitted together in a cohesive strategy if the right leader and decision making framework is in place.  The boat needs to get pointed in a unified direction. That is why I think Bartz could be a good choice.  She may be new to the web and to media but Yahoo! has a campus full of individuals who are passionate and go to work everyday to build great stuff.  Bartz, from what I’ve read thus far, seems like someone that can assess the playing field for the organization, distill the information and make key decisions.  She clearly understands the gauntlet laid out as she stated:

Yahoo…a company with great assets that frankly could use a little management.

It all seems to blur together at this point but it seems the news regarding the company has been on a downward news cycle since the infamous Peanut Butter memo.  Perhaps there was a lot of merit in that memo where the general gist is that Yahoo! had its hands in too many things and needed to focus.  That is before any of the Microsoft debacle even occurred.  Then everyone coming out of the woodwork to put their view on the situation and what they should do to which Bartz responds:

Everybody on outside deciding what Yahoo should or shouldn’t do–that’s going to stop.

As I said, she is going to need some time to get on the ground, assess and move from there.  She is going to need that chance to do it.  I, for one, believe she should have that chance.  Clearly, she does do:

I can’t give you a timeline. I’m very good at listening, digging around, finding out what’s going on. I don’t expect it’ll take an extraordinary amount of time, but this is a big company. Let’s not put ourselves in some crazy timeline. Let’s give this company some frigging breathing room.

I, again, am bullish on Yahoo!  I think they have some great elements going for it and I never quite rallied behind the concept that they were in real trouble.  Time will tell but I think picking a CEO like Carol Bartz is a step in the right direction in changing the negative momentum that has surrounded Yahoo! for some time and then getting the company plowing forward again.  That’s it, from here out, I plan to give them some room to breath.

Sorry, I love Facebook but this simply strikes me at late nineties irrational valuations but an new stratospheric levels.  Of course this is a rumor and very inline with the 1% valuation Microsoft has already placed on the company but buying 1% and buying the whole enchalada at that valuation are two completely different things.  And I’m sure Microsoft has a team of folks a lot smarter than me doing IRRs, synergy analysis and long-term value analysis on what Microsoft can do from a revenue perspective overall with a great site like Facebook in its arsenal (not to mention it from a defensive maneuver against its core business).

To me, this is the Alex Rodriguez signing brought to the Internet.  The Rangers signed him, 10 years $275M.  The Yankees just parlayed that into 10 years, $325M.  Rodriquez, great player (Facebook).  Yankees, great franchise (Microsoft).  But completely off-the-grid and irrational.  Keeping the sports metaphor going and trying to put such an aquisition in perspective:  Microsoft could buy the TOP 18 NFL Franchises for the price of Facebook and those franchises have a cumulative revenue stream of $3.88B! (according to Forbes).

Think about it from that perspective.  The top 18 storied franchises in football with the likes of the Cowboys, Giants, Bears, Patriots, Redskins, Jets, Packers and Steelers to just name a few.

I see such an acquisition and such a valuation as crazy.  Bad for the web overall (for another post).  Potentially bad for Facebook and its users (again, another post).  And for that, I do not (or at least hope I do not) see this happening.  Sara Lacy doesn’t see it happening for different reasons.

UPDATE:  More conversation and interesting points on this topic at TechCrunch.

From an outsider’s perspective, it seems crazy to think some of these potential partnerships that are being discussed are a better alternative than Yahoo! standalone. Time Warner? wow. Did I imagine what happened with AOL? If a financial transaction has to take place which apparently needs to since the situation is not going away, then Microsoft sure does seem the best alternative. As long as Microsoft basically leaves Yahoo! as their online arm, doing synergistic tie-ins to drive Microsoft’s online agenda. Microsoft keeping MSN running, however, seems duplicative and confusing. And, I can’t help but to continue to think that, even with the best of intentions, two companies of this size and different cultures often doesn’t lead to “one plus one equals three”. But again, I am not a financial analyst.

I, for one, am hoping that Yahoo! finds the financial methods to stay standalone. It will foster innovation, keep some competition in place, and I still think they have a LOT of runway to do great things.

UPDATE: Got an email regarding a related funny video. Uploaded over at my tumblr site. Thanks to Observ34 for sending my way.

Take a look at a study done by a faculty member at the University of Technology in Sydney comparing the correlation of results by contextualising search engine with conventional engines. The premise of the hypothesis is that “an automated analysis not only of the content of candidate documents, but also the content of related (i.e. either directly or indirectly linked) documents and the structure of the relationships can be used to improve the effectiveness of search engines (Ellis 1996).” As the study points out:

While the results are preliminary, the improved correlation of results in different searches does shed light that contextual searching is a value added way of standard searching. Pretty interesting about the power of context, something much more difficult to achieve off web…

The paper was written in 2000 which makes it interesting that Google is not even mentioned when the likes of Yahoo!, Magellan, AltaVista and Lycos are. Hey, for that matter, why not About.com, we were still considered a search engine back in ’00 even when we were using Inktomi as our core engine. Back to the point, Google via Page Rank truly pioneered by innovating search and contextualizing it through the power of linking and basing relevancy accordingly. It seems so intuitive now but you really have to give them credit for coming up with it then.