Many years ago it became obvious to some of us that online retail would continue to grow at a much faster pace than brick and mortar stores. This appeared to be less obvious to traditional retailers until more recently. In 2001, I suggested to some colleagues that Wal-Mart should acquire Amazon to gain an edge in online retail (Amazon stock was about $5 a share at the time). This idea was scoffed at. I bought Amazon stock but, clearly, didn’t maximize my execution as I sold it within 18 months for 3 times the return (it’s now $317). I’m guessing there were also some prescient investment bankers who received a similar response after suggesting that Wal-Mart buy Amazon. Who knows what the world would be like today had that occurred, as Amazon could easily have been derailed under Wal-Mart management. Continue reading
A high proportion of people I know use Facebook as their social network and LinkedIn as their business network. LinkedIn has executed well in capturing a massive audience of business users with over 300 million members, especially in North America which has approximately one third of the network’s members (with Europe quickly catching up). Having done so, it is well positioned to replicate what Facebook has done on the social side – capture business discussions. The question is how can they best do this? LinkedIn’s Influencer Series identifies the most influential voices on LinkedIn and invites them to allow LinkedIn to distribute their articles. The distribution goes to the LinkedIn feeds of people who have opted into seeing posts from each writer. However, the relatively small number of posts and limited distribution doesn’t drive the user value and uptick in page views that could be possible if LinkedIn is to own business discussion in the way that Facebook owns social discussion. Earlier this year LinkedIn recognized this opportunity and opened its Influencer programs to its wider member base with hopes that it would generate more engagement. The move came shortly after the company disclosed that page views declined for the second consecutive quarter.
The CEO correctly lays out some of the ways the world is changing, but can the software maker really change?
Microsoft CEO Satya Nadella recently emailed Microsoft employees a speech that I’ll refer to as his “Satya Manifesto.” In it, he points out that the software maker must make fundamental strategic and cultural changes to deliver on his vision of being “the productivity and platform company for the mobile-first and cloud-first world.” He further states: “We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more.”
I was impressed with his willingness to shift Microsoft’s focus to the mainstream of where the world is moving. Yet, I couldn’t help compare his memo to a 1999 speech by Carly Fiorina after assuming the CEO role at Hewlett Packard. In her speech she said, “…we are a single global ecosystem – wired, connected, overlapping …”
By rethinking its acquisition strategy, the computer software and electronics company can be an innovator in growing sectors, such as cloud services, smart phones and teleconferencing
Microsoft’s stock has been stagnant as investors lose faith in the company’s plans for its future. After peaking at just under $60 a share in early 2000, Microsoft’s stock fell to about $22 later that year and has traded mostly between $25 and $40 a share in the 14 years since then. While revenue and earnings per share have more than tripled since then, the stock price has not followed suit. The question of why can be answered fairly simply: investors have lost faith in Microsoft’s future ability to control its core markets. What Microsoft could do can be answered fairly simply: Take a page out of Facebook’s apparent strategy and buy best of breed next generation companies. Continue reading
I admit it, I’m a weird guy. How many others have a PhD in financial modeling combined with an MBA in finance and accounting? I’ve never put any of this on my business card (not even my CPA) because degrees are not necessarily the indicators of who will succeed in business. After all, the one thing Bill Gates, Mark Zuckerberg, Michael Dell, Ted Waitt and Larry Ellison have in common, besides 4 of the 5 being billionaires before turning 30, was they never graduated from college. Don’t get me wrong: I’m notadvocating dropping out of school. In fact, in this post, I will leverage my finance and modeling background to discuss further how to better predict the future success of companies. When we evaluate companies, we like to see that:
When Facebook acquired WhatsApp last week, it set itself apart from earlier generation technology leaders like Apple and Microsoft. Facebook has decided that it wants to own the social space now, as well as in the future, and is willing to pay an ostensibly high price to ensure owning rising players who may one day challenge them. By contrast, Apple and Microsoft believed they could catch up and surpass new entrants (and were both often, but not always, correct) and therefore rarely paid a premium for acquisitions. We will return to this theme in a future blog by speculating who Microsoft could buy to help ensure more control over its domain going forward.
You’re an entrepreneur with the greatest idea since sliced bread. It’s even better than the invention of the wheel. And you don’t understand why those clueless VCs are hesitant to fund you. As a former CEO of a startup I share your pain. What are you missing? Well, your wheel may hit ruts in the road ahead if you haven’t paid attention to:
While the short run excitement is more around the Super Bowl, the longer term impact on the Seattle region will be from Microsoft. Since I was one of the top analysts on Wall Street following Microsoft (in a prior life), I feel well qualified to give some thoughts on the changing of the guard.
I can’t help myself, I analyze everything: technology, exercise, electric cars, marketing of every ilk, airline disservice, and like many others, professional sports. This should be a really exciting Super Bowl – an irresistible force meets an immovable object! Given so much focus on the Super Bowl, this post won’t be about the next generation of technology but rather what I believe are suggested improvements in statistical measurement of a quarterback’s effectiveness. Since I asked several colleagues at Azure, including Dan Park (who helps edit every post), to offer opinions I will often say we throughout this writing.
For many years, while on Wall Street, I published my newsletter SoundBytes. Although blogs did not formally exist, it was written like a blog post with lots of personal references and comments on society in addition to analysis of technology trends and stock opinions. Looking back, we had numerous calls that have proven prescient and a few (most of which I won’t mention) that were not as strong. A few examples of posts that appeared in the mid- to late-1990s, include: