Rumors about the possible acquisition of Facebook, usually with Yahoo as buyer, have been around for most of this year. Not that Yahoo or Facebook have asked for this attention, but the media is getting antsy. Robert Young put it best last week when he asked – Yahoo & Facebook: Deal or No Deal?. That is certainly the question of the fiscal quarter.
We know that Facebook has been pursued almost since the beginning of its existence. They narrowly avoided a $10 million acquisition by Friendster in mid 2004, just months before they took their first round of financing from Accel Partners. Former Friendster execs say that the deal was close to closing, but last minute negoations over control ultimately disrupted the deal. Since then, Facebook has certainly been approached by every major Internet company.
Category: Entrepreneurs
Web Investment Bubble: 61 Video Hosting Companies
I’m pleased to offer this latest revision of the Web Video Cheat Sheet, a quick and dirty guide to sharing videos online. I’m in the process of compiling another report that examines a specific facet of the video sharing experience (more on that later). Meanwhile, I couldn’t wait to get this 61-site overview out there so folks can figure out the best place to host their most memorable (drunken) holiday moments.
Baseball & Innovation
Jeff Angus over at Management by Baseball sent me an intriguing update about Billy Bean’s approach to Moneyball. Bean is famous in the baseball world for developing quantitative techniques to help identify players that are underpaid by market standards and for developing a system that enables such “bargain” players to contribute to overall team performance. There are many signs that the system works, for example, Oakland’s cost per win in 2005 was $450,000 in salary, while the New York Yankees paid 1.4 million. The 2006 payrolls (when Oakland had a better season than the Yankees) were about 60 million for the A’s and about 200 million for the Yankees. Bean and his staff do impressive analysis to make decisions that gain them cost advantages and increase their odds of success. For example, they stay away for star players that are coming out of high school and prefer college graduates because only 5% of baseball players drafted straight out of high school are in the major leagues in three years, while 17% of college graduates that are drafted make it to the majors.
Beane watching is worthwhile…
Revive Care Packages?
I may spend too much time thinking about this, but how is it one reverses the hatred of a people after war? WWII was no doubt very different. But interestingly, Germans talk about this a lot — about the brilliance in the American strategy after the war to rebuild (what we weirdly call) “friendship” between the German and American people.
That strategy had a government component (2% of the GDP spent on the Marshall Plan) and a private component. The private component came largely through the delivery of “CARE Packages.” As described on CARE’s website, these packages were originally surplus food packs initially prepared to support a US invasion of Japan. Americans were invited to send these packages to victims of the War. Eventually, over 100,000,000 packages were sent by Americans over the next two decades, first in Europe, then throughout the world.
A German friend this afternoon was recounting this story to me — he too is obsessed with how to reduce Iraqi anger. But the part he emphasized that I had missed originally was how significant it was to Germans to know that these packages were sent by ordinary Americans. It wasn’t the government sending government aid; it was American volunteers taking time to personalize an act of giving.
A good idea.
A Few Words With Jerry Brown
Then how would you describe yourself politically?
I’m very independent. There’s a great line from Friedrich Nietzsche: A thinking man can never be a party man.
Extraordinary Service in an Era of Low Expectations
My cell phone rang, displaying an unknown number while driving home from a Thanksgiving trip via the airport. Shannon from Milwaukee’s fine airline – Midwest – called to say that one of her coworkers found homework in the seatback of the plane we just vacated. She thought it important and wanted to know if we had a FedEx number so she could send us the missing homework via an overnight package.
Let’s just ponder this customer service outlier, or “black swan [more]” for a moment. We live in an era of low expectations:
- Politics: Meet the New Boss, Same as the Old Boss:
But Ms. Pelosi’s damage to herself was already done. The well-known shortcomings of Mr. Murtha were broadcast for all to see — from his quid-pro-quo addiction to moneyed lobbyists to the grainy government tape of his involvement in the Abscam scandal a generation ago. The resurrected tape — feasted upon by Pelosi enemies — shows how Mr. Murtha narrowly survived as an unindicted co-conspirator, admittedly tempted but finally rebuffing a bribe offer: “I’m not interested — at this point.
- Black Friday retail tactics:
In Lewis Center, Ohio, near Columbus, Cindy Milsap, 43, and her daughter, Ashley, 20, woke up before dawn to drive to the nearby Wal-Mart Supercenter, which advertised a 52-inch high-definition television for $474. “We don’t really need a new TV, Ms. Milsap said. “But at that price? C’mon.”
But the bargain eluded them. The “limited quantity” in the ad, she said, was three TVs — all sold by the time the pair arrived.
Those customers left in peace.
- The oxymoron that is “airline service“:
With overcrowded airplanes, little civility in dress or demeanor of passengers, few meals, fewer amenities, industrywide salary cuts of epic proportions, and (the worst sin of all) airlines canceling pension plans because they’ve robbed the fund of hundreds of millions, far too many of America’s airline employees are shell shocked, depressed, disillusioned and resentful. In effect, we’re now an industry full of employees going through post-traumatic stress and wondering why we ever thought it was fun.
And that, in a nutshell, equates to bad and inattentive service with a “who cares” attitude. Morale, in other words, is the key, and it’s in precious short supply today.
- 2006 Airline Quality Rating website.
I remain astonished that a Midwest employee cleaning the plane found said homework, took the time to give it to someone who could find the owner, lookup their contact information, make a call, obtain the shipping information, place the papers in a FedEx package and send it our way. Everyone involved must actually care about the customer. What a concept. I hope that these words, in some small way encourage others to fly Midwest. There is indeed, no better care in the air.
Wisconsin 27th in “Entrepreneur Friendliness”
Small Business & Entrepreneurship Council [PDF]:
The Small Business Survival Index ranks the 50 states and District of Columbia according to some of the major government-imposed or government-related costs affecting investment, entrepreneurship, and business.
This eleventh annual Small Business Survival Index ties together 29 major government-imposed or government-related costs impacting small businesses and entrepreneurs across a broad spectrum of industries and types of businesses:
- Personal Income Tax. State personal income tax rates affect individual economic decision-making in important ways. A high personal income tax rate raises the costs of working, saving, investing, and risk taking. Personal income tax rates vary among states, therefore impacting crucial economic decisions and activities. In fact, the personal income tax impacts business far more than generally assumed because roughly 90 percent of businesses file taxes as individuals (e.g., sole proprietorship, partnerships and S-Corps.), and therefore pay personal income taxes rather than
corporate income taxes. Measurement in the Small Business Survival Index: state’s top personal income tax rate.1- Capital Gains Tax. One of the biggest obstacles that start-ups or expanding businesses face is access to capital. State capital gains taxes, therefore, affect the economy by directly impacting the rate of return on investment and entrepreneurship. Indeed, capital gains taxes are direct levies
on risk taking, or the sources of growth in the economy. High capital gains taxes restrict access to capital, and help to restrain or redirect risk taking. Measurement in the Small Business Survival Index: state’s top capital gains tax rate on individuals.2
A Chat with JetBlue’s David Neelman
With Washington often, umm, unable to focus–“It took 10 years to get an energy bill passed that has had little effect,” Mr. Neeleman interjects–he sought counsel on the capital’s ways. As a result, he got professional help on the bill’s language and learned about the legislative process. “The advice I got was to go get RAND and other thinkers to write about it–those are the guys that they listen to,” Mr. Neeleman says. He has spoken with RAND about doing an economic impact study, but has not commissioned one. And, as he put it, “I got a couple professors”–names of people he might enlist in the cause. Who?–I ask. “From the American Enterprise Institute and Brookings Institution,” is his reply.
Mr. Neeleman has also visited the White House seeking support. “They’re looking at it,” he says, but were noncommittal. He believes “it should sail through Congress,” and would be happy to “testify for my country and for our industry.” This earnestness, along with his resolve, is obvious throughout the interview. As I’m leaving, Mr. Neeleman stops me to point out–no, to declaim–a framed quote on the wall outside his office. It’s from Teddy Roosevelt, and reads, in part: It is not the critic who counts, not the man who points out how the strong man stumbled or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena . . . who–at the worst–if he fails, at least fails while daring greatly.
The Next Capitalism
When he died in 1848, John Jacob Astor was America’s richest man, leaving a fortune of $20 million that had been earned mainly from real estate and fur trading. Despite his riches, Astor’s business was mainly a one-man show. He employed only a handful of workers, most of them clerks. This was typical of his time, when the farmer, the craftsman, the small partnership and the independent merchant ruled the economy. Only 50 years later, almost everything had changed. Giant industrial enterprises — making steel, producing oil, refining sugar and much more — had come to dominate.
The rise of big business is one of the seminal events in American history, and if you want to think about it intelligently, you consult historian Alfred D. Chandler Jr., its pre-eminent chronicler. At 88, Chandler has retired from the Harvard Business School but is still churning out books and articles. It is an apt moment to revisit his ideas because the present upheavals in business are second only to those of a century ago.
Until Chandler, the emergence of big business was all about titans. The Rockefellers, Carnegies and Fords were either “robber barons” whose greed and ruthlessness allowed them to smother competitors and establish monopolistic empires. Or they were “captains of industry” whose genius and ambition laid the industrial foundations for modern prosperity. But when Chandler meticulously examined business records, he uncovered a more subtle story. New technologies (the railroad, telegraph and steam power) favored the creation of massive businesses that needed — and, in turn, gave rise to — superstructures of professional managers: engineers, accountants and supervisors.
KCRW’s Active Internet Audience
KCRW is a leading example of how public radio stations are aggressively pushing high-definition radio, live streaming of programs, podcasting and other technology-driven improvements — and in the process demonstrating the potential the Internet may hold for all radio stations, public or commercial.
Such moves have helped public stations expand their audience at a time when commercial broadcasters are seeing the listener base shrink. But while the initiatives have helped public radio stations expand their reach, the bar for success is also lower. Public stations rely on sponsorship and listener donations and are under less pressure to make money on their audience-growing online initiatives, such as selling ads on their podcasts.
“They have less to lose,” says David Bank, an analyst at RBC Capital Markets. “They’re all about delivering their content to the audience, without worrying about how [new technologies] might displace the audience and the advertiser.” Now, he says, commercial radio is wishing it had moved faster and earlier in this area, although it has a big effort to catch up in the past year or two. Many big radio companies now sell advertising for their streams separately to their broadcast advertising, and start most podcasts with an ad. Industry-wide, online revenue now runs well north of $100 million annually.
KCRW’s music programs are, in my view, the best around and a refreshing change from the usual commercial practice of playing the same old songs over and over and over and over.