'Online And New Media' Archive
Money and politics go together like cookies and milk, unless you’re apolitical or lactose intolerant. As the Democratic National Convention winds up in Denver and the scene moves on to the Republican National Convention in St. Paul, technology titans are making their presence felt on the national political scene.
The most obvious manifestation of the phenomenon is the Big Tent, which actually is a big tent (8,000 sq. ft.) put up for the use of bloggers and others at the two conventions. The amenity-packed facility is sponsored by Google and YouTube, along with Digg. Bloggers were first credentialed at the national conventions four years ago, and now they’re ubiquitous at the political confabs, with many of them deliberately choosing to stay out of the convention halls (where the speeches and activities are meant for the consumption of TV cameras) and to follow the action everywhere else in the vicinity.
The high-tech industry steered clear of the Beltway for decades, feeling it didn’t need to indulge in grubby lobbying with Congress and the federal bureaucracy. A number of issues, however, have forced industry figures to get down and dirty with the likes of AARP, the National Association of Manufacturers, the National Rifle Association, and the US Chamber of Commerce in making sure their interests are represented on Capitol Hill and elsewhere in the District of Columbia. Intel, for example, spent $500,000 in Q2 for lobbying the Department of Commerce, the Federal Trade Commission, and other agencies.
One hot-button topic is Net neutrality. Online content providers, such as Yahoo! and YouTube, are vitally interested in making sure their users are unfettered by any restrictions on access and downloading, while Internet service providers, such as Comcast and Verizon, see some customers of theirs engaging in high-volume swapping of files and want government regulators to let them limit those customers or even to charge them more.
The R&D tax credit is another issue that raises the blood pressure of executives in technology, especially those in the semiconductor industry. Chip makers typically spend about 20% of their annual sales on R&D expenditures. Any hint that Congress is or isn’t going to revive the R&D tax credit brings this corporate pocketbook issue to the fore.
The conventional wisdom is that techies tend to vote Democratic. It ain’t necessarily so. There is a very strong libertarian bent to the industry. Electronics engineers and executives may not vote in large numbers for candidates of the Libertarian Party, but their limited-government philosophy attracts them to candidates like Representative Ron Paul, who was running for president among the Republican field this year and was the Libertarian nominee for president in 1988.
Tech CEOs, in their personal economic interest, are often closest to the Republican Party. Meg Whitman, the former CEO of eBay, is reportedly considering running as a Republican for governor of California in 2010. Carly Fiorina, the controversial ex-CEO of Hewlett-Packard, is a business and economic adviser to Senator John McCain and is rumored to be on the inside track for a top post in a McCain Administration, perhaps even as vice president.
Whitman and other high-tech execs hedge their political bets by giving to both Democratic and Republican politicians, pragmatically recognizing that one party isn’t going to control the White House or the Congress forever. Regardless of who wins the election in November, the technology industry will be pressing its case with donations and lobbying in 2009 and beyond.
Poor Carl Icahn — he was all set to join the Yahoo! board of directors, bringing along Jon Miller, the former chairman and CEO of AOL. Mean old Time Warner and its army of attorneys stepped in, however, and reminded all that Miller has a non-compete clause in his contract with the media conglomerate that runs through March 2009, prohibiting him from sitting on the boards of companies like Yahoo!.
A mere speed bump in the grand plans of the ambitious Mr. Icahn. He just went to the cupboard and dusted off the nine men who were on his putative slate of nominees when he was conducting a proxy contest against Yahoo!. The online media giant this week selected former Viacom CEO Frank Biondi and John Chapple, the one-time CEO of Nextel Partners, to fill the two new seats on the Yahoo! board.
To my greatest regret, Yahoo! didn’t pick Mark Cuban, the very vocal owner of the Dallas Mavericks. They also passed over Adam Dell, attorney, venture capitalist, and brother of You-Know-Who.
I can’t say whether they’re happier at Yahoo! HQ these days, but they’re certainly dancing! Especially that wild-and-crazy Chief Yahoo, Jerry Yang.
Meanwhile, back on the front lines of the stock-options backdating scandal: Nancy Heinen, the former general counsel of Apple, reached a settlement with the SEC. Without admitting or denying the civil charges brought against her last year, the attorney agreed to pay $2.2 million in returning allegedly ill-gotten gains, penalties, and interest. The settlement also bars her from serving as a director or an officer of a publicly held company for five years and prohibits her from practicing or appearing before the SEC for three years.
According to the SEC’s complaint, Heinen caused two large grants of stock options to be fraudulently backdated in 2001. One block of options went to six Apple executives (including Heinen), while the other grant went to CEO Steve Jobs. Her actions led to Apple failing to account for nearly $40 million in compensation expenses related to the grants — money that should have been charged against the company’s profits for the year.
To review: Backdating the granting dates of stock options isn’t in itself illegal. The questionable legal behavior occurs when executives cover up their actions and fail to disclose them to the board of directors, the company’s shareholders, and the SEC.
The Apple backdating case hasn’t had any blowback for Steve Jobs; all the legal fallout fell on Nancy Heinen and the company’s former CFO, Fred Anderson, who reached his own settlement with the SEC last year. No criminal charges against anyone are expected. Of course, if SEC investigators grilled Jobs, he just would have used his famous Reality Distortion Field on them. I’m pretty sure that’s exactly what happened.
The Mojave Desert is a barren and desolate place. Encompassing the iconic Death Valley in California and adjacent states, the High Desert has inspired generations of artists with its arid, unforgiving beauty, as expressed in U2’s classic 1987 album, The Joshua Tree, and many other works.
The word “Mojave” has lately come to be associated with a barren and desolate corporation from the rainy Pacific Northwest, however. Microsoft hired the advertising and branding firm Bradley and Montgomery to conduct consumer testing of a “new” computer operating system. The subjects were told the demonstration they witnessed was of an OS code-named “Mojave.” At the end of the demo, the subjects were told that “Mojave” actually is — wait for it — Windows Vista! Yes, Vista, the much-slagged iteration of Windows that first shipped 18 months ago and has underwhelmed PC users around the world.
Videos of the demos and reactions are posted at MojaveExperiment.com. All over the blogosphere, this attempt at redeeming the reputation of Vista has drawn widespread derision and scorn.
I’ve been using Windows Vista Home Basic on my personal notebook computer since early last year, and I’ll say I’m still generally happy with the operating system. Sometimes it seems like an overbearing spinster aunt, asking me if I really, truly want to visit that unfamiliar Web site, but you can disable such hurdles. My computing requirements are quite simple, however, and I haven’t had the unpleasant experience of trying to connect an old printer with my Vista-based PC or other horror stories.
At Hoover’s, we’re still using Windows XP Professional (and Internet Explorer 6!), and we don’t seem to have any immediate plans for big changes in our company IT infrastructure when it comes to operating systems and browsers. (A lot of people here use Firefox to take advantage of tabbed browsing and other useful features, things that are incorporated into IE 7.)
Whether you think Vista is a blessing, a curse, or something in between, you’ve got to admit this is a curious way for a big corporation to market a controversial product.
Friday’s annual meeting of Yahoo! shareholders will be anticlimactic, thanks to a deal worked out last week between the company and activist investor Carl Icahn, who owns about 5% of Yahoo!’s shares.
Icahn called off his proxy challenge, striking a settlement agreement with Yahoo!’s board and management. Basically, one incumbent director will leave the board, the board will expand from nine to 11 seats, and two of the three vacant seats will be filled by Icahn and former AOL CEO Jon Miller, with Icahn to name a third director. (Please let it be Mark Cuban!)
Icahn briefly blogged on the settlement, which is so 21st century, of this aborted proxy battle.
What brought about this rapprochement? As others have noted, one event that may have tipped the balance and caused Icahn to seek a deal was the declaration by Legg Mason the week before that it planned to vote its shares in favor of the management nominees at the Yahoo! annual meeting. Bill Miller, the manager of Legg Mason’s flagship Value Trust fund, loudly criticized Yahoo!’s board and management for scaring off Microsoft, yet decided in the end to go with the devil he knew. Icahn reportedly saw Yahoo!’s institutional investors circling the wagons around the incumbent board and management and apparently decided against suffering a public defeat.
For their part, the Yahoos in Sunnyvale, California, knew they were about to report mediocre results from their second quarter, so they also had an impetus to come to an arrangement with the barbarians at their gate.
This sally by Icahn is looking like his crusade against Motorola — he buys a small but significant stake in the target company, blusters about the sins of the board and management, pulls together a proxy bid, and then calls it off in exchange for seats on the board for him and some cronies. It remains to be seen whether the Yahoo! episode will play out like Motorola did, with the CEO banished and the company broken up.
Meanwhile, the Evil Empire in Redmond, Washington — excuse me, I mean Microsoft — is officially washing its hands of any interest in all or part of Yahoo!, and turning to its own knitting to defeat Google. Knit one, Perl two? (A little coding humor.)
Yahoo!’s not out of the woods, with Congress scrutinizing its search advertising deal with Google and some shareholders still mad about losing out on $33 a share in cold, hard cash from Microsoft. (The stock closed Monday at $20 and change.) Not much yodeling going on at Yahoo! HQ these days.
Not me, buddy. I’m no gadget geek. My wireless phone is an aging Samsung A660. I’ve never owned an iPod, although I bought one for my daughter and I’m a power user of iTunes at home and at work.
Then again, Apple sold more than 1 million iPhones by Sunday, so lots of people obviously care about the new iPhone.
The iPhone 3G went on sale last Friday, and people in New York City were lining up a week in advance. Some of those folks, however, apparently were hippie farmers trying to make a point about organic food and technology.
A lot more people lined up just for the iPhones, including Steve Wozniak, the co-founder of Apple, who spent hours at a mall in San Jose, California — not waiting in line, like most civilians, but lounging on the comfy furniture in the mall and then taking his place at the head of the line when the Apple store opened on Friday morning. Violence did not ensue, as Apple fanatics will countenance anything from the two creators of the Apple II personal computer. (To be fair, Woz later reported that he had permission in advance from the staff of the Apple store in question to sit on the chairs near the store entrance and then to be first in line, along with several friends, as the store opened.)
The big news about iPhone 3G launch day was all the trouble activating the newly purchased phones (not a surprising development, given that hundreds of thousands of iPhones were bought that day in Apple and AT&T stores) and the temporary “bricking” of existing iPhones as their owners installed the newest version of iTunes and downloaded the cool new iPhone applications from the App Store. Through the weekend, there were more than 10 million iPhone and iPod touch apps downloaded.
The iPhone 3G is a certified hit, and it may help boost sales for chip makers supplying semiconductors for the new smart phone. They include Broadcom, Infineon Technologies, Marvell Technology Group, Skyworks Solutions, and TriQuint Semiconductor.