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Tag: Yahoo

No Digital Skyscrapers

A colleague of mine shared an interesting article by Sarah Lacy from tech site Pando Daily about the power of technology building the next set of “digital skyscrapers” – Lacy’s term for enduring, 100-year brands in/made possible by technology. On the one hand, I wholeheartedly agree with one of the big takeaways Lacy wants the reader to walk away with: that more entrepreneurs need to strive to make a big impact on the world and not settle for quick-and-easy payouts. That is, after all, why venture capitalists exist: to fund transformative ideas.

But, the premise of the article that I fundamentally disagreed with – and in fact, the very reason I’m interested in technology is that the ability to make transformative ideas means that I don’t think its possible to make “100-year digital skyscrapers”.

In fact, I genuinely hope its not possible. Frankly, if I felt it were, I wouldn’t be in technology, and certainly not in venture capital. To me, technology is exciting and disruptive because you can’t create long-standing skyscrapers. Sure, IBM and Intel have been around a while — but what they as companies do, what their brands mean, and their relative positions in the industry have radically changed. I just don’t believe the products we will care about or the companies we think are shaping the future ten years from now will be the same as the ones we are talking about today, nor were they the ones we talked about ten years ago, and they won’t be the same as the ones we talk about twenty years from now. I’ve done the 10 year comparison before to illustrate the rapid pace of Moore’s Law, but just to be illustrative again: remember, 10 years ago:

    • the iPhone (and Android) did not exist
    • Facebook did not exist (Zuckerberg had just started at Harvard)
    • Amazon had yet to make a single cent of profit
    • Intel thought Itanium was its future (something its basically given up on now)
    • Yahoo had just launched a dialup internet service (seriously)
    • The Human Genome Project had yet to be completed
    • Illumina (posterchild for next-generation DNA sequencing today) had just launched its first system product

And, you know what, I bet 10 years from now, I’ll be able to make a similar list. Technology is a brutal industry and it succeeds by continuously making itself obsolete. It’s why its exciting, and it’s why I don’t think and, in fact, I hope that no long-lasting digital skyscrapers emerge.

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Thompson-gate

If you’ve been following the major tech trades, you’ll know that Scott Thompson, former head of eBay’s PayPal unit and CEO of internet giant Yahoo, has been embroiled in an embarrassing scandal about a misrepresentation on his resume. It turns out that Mr. Thompson’s resume specifically says that he had a degree in computer science from Stonehill College – something that turned out to be flat-out false, and which ultimately led to Thompson stepping down as CEO.

I may be in the minority here, but I feel that Thompson lying on his resume was probably not the biggest deal, especially since I doubt that degree made any real difference to why Yahoo hired him. But what was a heck of a lot worse was that the misrepresentation made its way into Yahoo’s 10K  — “Mr. Thompson holds a Bachelor’s degree in accounting and computer science from Stonehill College” — a filing to the SEC that Thompson signed, certifying that:

I, Scott Thompson, certify that:

1. I have reviewed this Amendment No. 1 to the Annual Report on Form 10-K of Yahoo! Inc. for the year ended December 31, 2011; and

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

(bolding mine)

This changed Thompson’s sin from one of “just” padding a resume to one of either (1) not carefully reading one of the most important documents a company can issue and/or (2) outright lying to the government and to Yahoo’s investors – not a good sign for a new (and now ex-) CEO. And, also seriously calls into question the Yahoo board of directors’ judgment in that they failed to do a very simple thing such as running a basic background check on a key hire.

As someone who is an investor (both in my job in venture capital investing in startups and outside of my work in the public market) and has been lucky enough to participate in board meetings for some of our portfolio companies, these are particularly alarming signs. While the underlying lie is not really that big a deal, being able to trust the executives and the board members who are supposed to have your best interests at heart is – and misrepresentations in a regulatory filing speak very poorly to a person’s thoroughness, competence, and/or credibility.

The next Yahoo CEO has a difficult job ahead – not only will he/she need to address the underlying problem of Yahoo not having a coherent vision/strategy and having demoralized workers, he/she will likely need to manage the construction of a better board of directors and the implementation of new policies and procedures to prevent this type of thing from happening again.

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Keep your enemies closer

One of the most interesting things about technology strategy is that the lines of competition between different businesses is always blurry. Don’t believe me? Ask yourself this, would anyone 10 years ago have predicted that:

I’m betting not too many people saw these coming. Well, a short while ago, the New York Times Tech Blog decided to chart some of this out, highlighting how the boundaries between some of the big tech giants out there (Google, Microsoft, Apple, and Yahoo) are blurring:

image

Its an oversimplification of the complexity and the economics of each of these business moves, but its still a very useful depiction of how tech companies wage war: they keep their enemies so close that they eventually imitate their business models.

(Chart credit)

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