Daily Archives: January 17, 2007

How Yahoo Blew It

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Nice piece by Fred Vogelstein in Wired…

Terry Semel was pissed. The Yahoo CEO had offered to buy Google for roughly $3 billion, but the young Internet search firm wasn’t interested. Once upon a time, Google’s founders had come to Yahoo for an infusion of cash; now they were turning up their noses at what Semel believed was a perfectly reasonable offer. Worse, Semel’s lieutenants were telling him that, in fact, Google was probably worth at least $5 billion.

This was way back in the summer of 2002, two years before Google went public. An age before Google’s stock soared above $500 a share, giving the company a market value of $147 billion — right behind Chevron and just ahead of Intel.

As Semel and his top staff sat around the table in a corporate conference room named after a Ben & Jerry’s ice cream flavor (Phish Food), $5 billion sounded unacceptably high. Google’s revenue stood at a measly $240 million a year. Yahoo’s was about $837 million. And yet, with Yahoo’s stock price still hovering at a bubble-busted $7 a share, a $5 billion purchase price would essentially mean that Yahoo would have to spend its entire market value to swing the deal. It would be a merger of equals, not a purchase.

Terry Semel — a legendary Hollywood dealmaker, a guy who didn’t even use email — had not come to Silicon Valley to meekly merge with the geeky boys of Google. He had come to turn Yahoo into the next great media giant. Which might explain why the face of the famously serene CEO was slowly turning the color of Yahoo’s purple logo, exclamation point included. “Five billion dollars, 7 billion, 10 billion. I don’t know what they’re really worth — and you don’t either,” he told his staff. “There’s no fucking way we’re going to do this!”

Note for UK readers: When Americans say ‘pissed’ they do not mean ‘drunk and incapable’ but ‘cheesed off’. I write with feeling, having once been caught up in a trans-Atlantic misunderstanding of the phrase.

Fail better: Zadie Smith on writing

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Novelist Zadie Smith had a terrific essay in last Saturday’s Guardian Review. For one so young, she writes with astonishing poise and maturity. Sample:

In preparation for this essay I emailed many writers (under the promise of anonymity) to ask how they judge their own work. One writer, of a naturally analytical and philosophical bent, replied by refining my simple question into a series of more interesting ones:

I’ve often thought it would be fascinating to ask living writers: “Never mind critics, what do you yourself think is wrong with your writing? How did you dream of your book before it was created? What were your best hopes? How have you let yourself down?” A map of disappointments – that would be a revelation.

Map of disappointments – Nabokov would call that a good title for a bad novel. It strikes me as a suitable guide to the land where writers live, a country I imagine as mostly beach, with hopeful writers standing on the shoreline while their perfect novels pile up, over on the opposite coast, out of reach. Thrusting out of the shoreline are hundreds of piers, or “disappointed bridges”, as Joyce called them. Most writers, most of the time, get wet. Why they get wet is of little interest to critics or readers, who can only judge the soggy novel in front of them. But for the people who write novels, what it takes to walk the pier and get to the other side is, to say the least, a matter of some importance. To writers, writing well is not simply a matter of skill, but a question of character. What does it take, after all, to write well? What personal qualities does it require? What personal resources does a bad writer lack? In most areas of human endeavour we are not shy of making these connections between personality and capacity. Why do we never talk about these things when we talk about books?

But in the middle of this remarkably elegant, thoughtful and articulate essay, there is a surprising lapse:

But before we go any further along that track we find TS Eliot, that most distinguished of critic-practitioners, standing in our way. In his famous essay of 1919, “Tradition and the Individual Talent”, Eliot decimated the very idea of individual consciousness, of personality, in writing. There was hardly any such thing, he claimed, and what there was, was not interesting. For Eliot the most individual and successful aspects of a writer’s work were precisely those places where his literary ancestors asserted their immortality most vigorously. The poet and his personality were irrelevant, the poetry was everything; and the poetry could only be understood through the glass of literary history. That essay is written in so high church a style, with such imperious authority, that even if all your affective experience as a writer is to the contrary, you are intimidated into believing it.

Smith has fallen into the trap of using ‘decimate’ as a synonym for ‘obliterate’ or ‘destroy’. What it actually means is “removal of a tenth”, the distinctive form of punishment meted out to mutineers in Roman legions. I’m wearily accustomed to journalists misusing the term. But it’s a shock to find someone as erudite as Ms Smith doing it.

Nobody’s perfect, alas. But it’s the only flaw in her lovely essay.

The view from planet Phillips

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Take a look at this — a post from Daily Mail columnist Melanie Phillips’s Diary…

Wars are often characterised by mistakes in analysis and strategy. This one can be won — provided the President now understands the strategic and operational errors that have been made, and puts them right. Putting more troops into Iraq will not be enough unless the Iranian regime is taken out. Clearly, this is not a great prospect. But it is a prospect which as time goes on will become even less palatable as it becomes ever more unavoidable. The longer it is left, the more difficult it will be. We are now in a world where the only calculation to be made is between rocks and hard places. There are no good options. The only sane course of action is the least worst option.

There will be scant support for this, it goes without saying, from the British media which remains largely on a different planet. Thus Anatole Kaletsky in the Times thinks war with Iran would be

…a disaster on [sic] the Middle East, beside which the war in Iraq would be a mere sideshow… What now seems to be in preparation at the White House, with the usual unquestioning support from Downing Street, is a Middle Eastern equivalent of the Second World War. The trigger for this all-embracing war would be the formation of a previously unthinkable alliance between America, Israel, Saudi Arabia and Britain, to confront Iran and the rise of the power of Shia Islam…

The fact that the ‘Middle Eastern equivalent of the Second World War’ has already been declared and is being waged upon the west does not seem to occur to him. No, the war-crazy villains of the piece are ‘trigger-happy’ Israeli ‘hotheads’ who are ‘hell-bent’ on stopping Iran from developing nuclear weapons. Yes, these are actually the terms he uses. Clearly, on planet Kaletsky it is those who seek to protect their country from the nuclear genocide that is being openly prepared for it — of which he makes no mention whatever — who are to be blamed for ‘trigger-happy’ aggression rather than those who are planning such a holocaust. No mention, either, of the fact that Iran has directly threatened America, has for years attacked America and in Iraq is currently waging war on America, which all might be thought to constitute a somewhat overdue reason for a response by America. But no, it’s those wretched Jews again. What moral and intellectual sickness is this?

Alas, it is the default position in British media and political circles. It is also rampant in the US, but there at least there is now an argument going on. On the outcome of that argument the course of this war — and the fate of the free world — now depends.

So now you know. Andrew Brown thinks that this is the way Dubya thinks.

Hmmm… Suppose he’s right. There is a strange, rather weary, liberal consensus (to which I subscribe) about what’s happened in Iraq, namely that the failure of the neocon project in that benighted land is so manifestly obvious that it’s inconceivable that the US Administration doesn’t now see it that way. (After all, the result of the mid-term elections suggests that the majority of American voters have come round to the view that the whole adventure has been either a mistake or a catastrophe.) In that sense, the report of the Iraq Study Group seemed to us to be just a statement of the obvious.

But it’s just possible that Bush & Co don’t see it like that at all. Maybe they see the difficulties in Iraq as a symptom of not applying enough force? Or of not applying it to the right points — e.g. Iran? Maybe they are seriously thinking of a strike against Iran?

Excuse me while I go and lie down in a darkened room.