Opinion

The Great Debate

from Breakingviews:

Rob Cox: GE should put itself up for sale

By Rob Cox
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

General Electric should sell itself. If that sounds like an April Fools’ Day joke, think again. It’s a real proposal on the ballot at the industrial group’s annual meeting. Setting aside the absence of any obvious buyer for the $260 billion company, the proposition illustrates the kind of shareholder democracy gone wild that many boards, and even some regulators, would like to squelch. They have half a point.

The proposal is one of about six that investors put forward and will be up for a vote at GE’s April 23 annual meeting in Chicago. Not all are quite so extreme. One calls for senior executives to hold options for life. Another would end stock awards and bonuses. Naturally, management is opposed to each of them.

But stockholder Robert Fredrich’s proposal that GE “hire an investment bank to explore the sale of the company” is the most financially illogical. For starters, there is no buyer capable of taking such a big gulp, unless Apple, Google or Exxon Mobil suddenly decides to change strategic course.

Moreover, Fredrich offers no evidence for his view that a sale would “release significantly more value.” A breakup of the finance-engines-turbines-refrigerators conglomerate might be worth considering, but not when the market cap of the company is greater than the sum of its parts, as GE contends is the case today.

from Jack Shafer:

Who’s afraid of Comcast?

Set aside for a moment everything you've read about the $45 billion bid Comcast made for Time Warner Cable last week. Blank from your mind Paul Krugman's prediction that the deal will result in a Comcast monopoly. Pretend you didn't read the New York Times piece about the acquisition presaging further consolidation in the cable market, with Charter Communications picking off Cox Communications. Thump yourself with a neuralyzer, if you can, and remove from your memory the protest against the transaction by Michael Copps, former Federal Communications Commission commissioner.

Finally, purge from your bile ducts the seething hatred you hold for Comcast and Time Warner Cable, those hurtful memories of rising bills, rotten service, and phone-tree purgatory and allow me to persuade you that we're having the wrong telecom argument when we quarrel about mergers and acquisitions. Instead of blocking mergers or beating concessions out of the telecom giants, let's give them the treatment they really fear: Policies that encourage the entry of competitors, which are the bane of every monopolist.

If you hate your cable television company -- to simplify a half-century of history -- blame it on the government. In the founding days of the industry, local municipalities mistakenly insisted that cable TV was a "natural monopoly" that must be regulated like telephone service. In nearly every case, the selection of a cable operator was a political one, with the most flattering supplicant winning the right from city councils to string wire on utility poles and cross right-of-ways to sell cable service. The municipalities collected franchise fees from the cable companies, shook them down for sweeteners like municipal channels and public access studios, regulated their rates, and required the operators to wire all if not most of their jurisdiction.

France says ‘Non’ to the digital age

France has kicked off 2014 with an array of skirmishes against Amazon, Google and other U.S. Internet companies, in what is shaping up as a classic battle between comfortable Gallic tradition and disruptive modernity.

On Thursday, Jan. 9, the French Senate unanimously approved a bill that would ban Amazon from offering free shipping on books in France. Strongly endorsed by the Ministry of Culture, the legislation is supposed to safeguard the existence of the country’s 3,500 bookstores, about 800 of which are independent.

A few hours earlier, France’s national agency for data protection, known by its acronym CNIL, announced that its sanctions committee had found Google to be in breach of national privacy laws, based on the company’s March 2012 decision to merge different privacy policies for each of its services — including YouTube, Gmail, Google Maps and Google Docs — into one policy. CNIL, along with data protection agencies in five other EU nations, argued that Google doesn’t sufficiently inform its users about how or why their data is processed. It ordered the Internet giant to pay a fine of 150,000 euros (about $200,000) and to publish a communiqué on its French home page informing users of the sanction.

Inside the Apple and Google smartphone war

This is an excerpt from DOGFIGHT: How Apple and Google Went to War and Started a Revolution by Fred Vogelstein, published in October 2013 by Sarah Crichton Books, an imprint of Farrar, Straus and Giroux, LLC.

By 2010 Apple and Google were attacking each other on every possible front: in the courts, in the media, and in the marketplace. Android’s surge in popularity was astonishing, and Andy Rubin, Eric Schmidt, and the rest of Google made no secret of their glee. It seemed that every chance they got during 2010 they would expound on how many monthly activations Android had racked up and how mobile devices were going to change the future of Google and the world. In an April 2010 interview with the New York Times, Rubin even predicted that Android was going to rule the entire mobile universe.

The year before he had been worried that Google would abandon Android and that he and his team would need to job hunt. Now he confidently proclaimed, “It [Android] is a numbers game. When you have multiple OEM’s [phone manufacturers] building multiple products in multiple product categories, it’s just a matter of time” before Android overtakes other smartphone platforms such as iPhone and BlackBerry.

Social media life: What privacy?

It was almost quaint: Google’s recent apology for privacy violations. Granted, it came in the face of a lawsuit where the company got its hand slapped for “data-scooping,” a wonderful phrase that could be the slogan of our current lives. Google was found to have crossed the line with its Street View Project, where in addition to photographing houses and buildings along the world’s streets and avenues, the Googilians scooped up all manner of personal information from zillions of unencrypted wireless networks.

Really? I’m shocked. Not. Who doesn’t data scoop is my question?

I look at a bathing suit on line. For the next few weeks, whenever I open my laptop it pops right up. It’s like I am being stalked by a bathing suit. I vow to never ever succumb again to online shopping, a resolve that crumbles faster than my New Year’s resolutions.

Every day I am online giving away — not just bits of information but bytes of my soul, or at least that’s the way it feels. Obviously the social media sites, Facebook, Twitter, Tumblr, Foursquare, et al, are the most glaring examples. We can complain about Google and about the predatory identity thieves out there who hack into our so-called private information. But the truth is we are the saboteurs of our own privacy.

from MediaFile:

Instagram’s Facebook filter

The startup had millions of users, but, from the beginning, just one customer.

The predominant way of interpreting Facebook’s billion-dollar purchase of Instagram, in light of the social-networking giant's forthcoming IPO, is that Mark Zuckerberg had to pick up the photo-sharing app to boost his company’s mobile engagement. That would allow him to guard the mobile flank against incursions from Google, Twitter, and whatever other social-media tools might next arise.

That may be true – and it may even be the way Zuck thought about the deal when he swallowed hard and ponied up the purchase price. But that way of analyzing Facebook’s pickup, and the pickup of dozens of other startups, not just by Facebook but by Google, Twitter, LinkedIn and others, is probably not telling the whole story. Here’s a different theory, one that better describes the tech world that we, the users of the Internet, now inhabit: Instagram may have had millions of us as its users, but it was really built for just one customer: Facebook.

Silicon Valley, for too long, has confused the issue of what it means to be a user of a website, service or app, and what it means to be a customer of the app. Intuitively, you’d think they would be one and the same: The person using the app is the person consuming the app. But increasingly, apps are being made to grab the attention of the hegemonic companies in tech. Whatever it takes to get bought.

from Paul Smalera:

The piracy of online privacy

Online privacy doesn’t exist. It was lost years ago. And not only was it taken, we’ve all already gotten used to it. Loss of privacy is a fundamental tradeoff at the very core of social networking. Our privacy has been taken in service of the social tools we so crave and suddenly cannot live without. If not for the piracy of privacy, Facebook wouldn’t exist. Nor would Twitter. Nor even would Gmail, Foursquare, Groupon, Zynga, etc.

And yet people keep fretting about losing what’s already gone. This week, like most others of the past decade, has brought fresh new outrages for privacy advocates. Google, which a few weeks ago changed its privacy policy to allow the company to share your personal data across as many as 60 of its products, was again castigated this week for the changes. Except this time, the shouts came in the form of a lawsuit. The Electronic Privacy Information Center sued the FTC to compel it to block Google’s changes, saying they violated a privacy agreement Google signed less than a year ago.

Elsewhere, social photography app Path was caught storing users’ entire iPhone address books on their servers and have issued a red-faced apology. (The lesser-known app Hipster committed the same sin and also offered a mea culpa.) And Facebook’s IPO has brought fresh concerns that Mark Zuckerberg will find creative new ways to leverage user data into ever more desirable revenue-generating products.

Stopping the Stop Online Piracy Act

Now that Congress has hit pause on its controversial Stop Online Piracy Act and nearly every argument about the merits and failings of the piece of copyright legislation has been made, it’s a good time to ask: what, in 2012, will it take to actually stop a bill like this?

Because despite the delay, the situation still isn’t looking so hot for those looking to bring down SOPA. Amendments to tone down the bill’s more disliked points have been routinely defeated in the House Judiciary Committee by numbers sufficient to pass the bill to the full House floor.

But, at this point in the process, numbers aren’t everything. In the wake of the Arab Spring, talk of censoring technology hits the ears differently. More important is that in SOPA’s short two-month life, opposition to it has catalyzed online and off. But to succeed, its opponents will have to both boost the volume of their public alarm and convince Congress that, in an Internet-soaked 2012, questioning SOPA needn’t be politically fatal.

Electronic medical records after Google Health’s failure

By Vineeta Vijayaraghavan and Clayton Christensen
The opinions expressed are their own.

It may seem that the viability of electronic health records looks dismal after the failure of Google Health, yet in integrated health systems around the country they have been implemented and utilized by patients. In Google’s failure we must see an opportunity to address the fragmentation of our healthcare system and take notice of those health systems that are offering innovative services that help provide better care at a lower cost.

Earlier this month, Google announced that it was closing down Google Health, its foray into personal health records, because it failed to find “a way to translate limited usage into widespread adoption in the daily health routines of millions of people.” Based on 30 years of research, we are firm believers that technology will enable disruptive innovations in healthcare – the types of innovations that will dramatically lower costs, increase quality and improve access to millions. But Google Health was doomed from the start. The obstacle standing in the way of its success was the massive fragmentation of our healthcare system, and its closure signifies the urgent need to integrate healthcare.

Google’s greatest skill – and challenge

GOOGLE/

By Jeff Jarvis
Jarvis is the author of “What Would Google Do?” and teaches at the CUNY Graduate School of Journalism. His next book, “Public Parts”, will be published later this year. The miracle of Google was that it could accomplish anything—let alone become the fastest growing company in the history of the world and the greatest disruptive force in business and society today—while being run by a committee, a junta, a council of the gods. In management, as in every other arena of business, technology, and media, Google broke every rule and made new ones. It should not be a shock that Eric Schmidt has stepped aside as CEO and made room for Larry Page. Schmidt was the prince regent who ruled until the boy king could take the throne while training him to do so. We knew that this would happen. We just forgot that it would. When I interviewed Schmidt a few weeks ago and asked about pressure over privacy, China, and lobbying, he said, “This is not the No. 1 crisis at Google.” What is? “Growth,” he said, “just growth.” Scale is Google’s greatest skill and greatest challenge. It scaled search (vs. quaint Yahoo, which thought it could catalogue this web thing). It scaled advertising (vs. the media companies that today don’t know how to grow, only shrink). It is scaling mobile (by giving away Android). It has tried to scale innovation (with its 20 percent rule)—but that’s the toughest. How does Google stay ahead of Facebook strategically? The war between the two of them isn’t over social. The next, great scalable opportunity and challenge is mobile, which in the end will translate into local advertising revenue. Mobile will give Google (or Facebook or Groupon or Twitter or Foursquare … we shall see) the signals needed to target content, services, search, and advertising with greater relevance, efficiency, and value than ever. As Schmidt told broadcasters in Berlin last year: “We know where you are. We know what you like.” Local is a huge, unclaimed prize. The question is how to scale sales. I have no special insight into the Googleplex. But I have to imagine that when the company’s three musketeers sat down and asked themselves what impediments could restrain their innovation and growth, they were smart enough and honest enough to finally answer, “us.” As well as their holy trinity worked setting strategy and reaching consensus—the one thing I did hear from inside Google was that nothing happened if they did not agree—it has become apparent that Google became less nimble and more clumsily uncoordinated. Google is working on two conflicting and competing operating system strategies, Android and Chrome. It bungled the launches of Buzz and Wave. It is losing talent to Facebook. It needs clearer vision and strategy and more decisive communication and execution of it. If it’s obvious to us it had to be obvious to them that that couldn’t come from Largey- plus-Eric. Google, like its founders, is growing up. It needs singular management. So let’s hope that Schmidt did his most important job well—not managing but teaching. Now we will watch to see who Larry Page really is and where his own vision will take Google. Will he give the company innovative leadership and can Sergey Brin give it leadership in innovation? I imagine we will see a new support structure for Page built from below now rather than from the side. I’m most eager to see how he will cope with speaking publicly for the company. Schmidt’s geeky sense of humor was not grokked by media. (When he set off a tempest in the news teapot saying we should all be able to change our names at age 21 and start over with youthful indiscretions left behind us, he was joking, folks. Really, he was.) Page is even less show-bizzy. As for Schmidt: I have gained tremendous respect for him as a manager, thinker, leader. His next act will likely surprise is more than today’s act. Jeff Jarvis, author of What Would Google Do?, teaches at the CUNY Graduate School of Journalism. His next book, Public Parts, will be published later this year.

The miracle of Google was that it could accomplish anything—let alone become the fastest growing company in the history of the world and the greatest disruptive force in business and society today—while being run by a committee, a junta, a council of the gods.

In management, as in every other arena of business, technology, and media, Google broke every rule and made new ones.

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