Acquisition madness

April 26, 2007

Why do companies keep buying others? Why on earth there is such a drive to buy overvalued and overhyped companies that will ultimately take years to absorb and, when it is the absorption is finished, it usually means that the potential benefits have gone and other new challenges are in the market place.

I cannot understand why Google recently bought DoubleClick and before that YouTube. Google keeps saying that it makes sense and that it fits with their corporate strategy, but if it did then they should’ve been doing it already and not buying companies on top of burger joints for over $2bn.

I beg to disagree with the Larry and Sergey. I think it ultimately this acquisitions mean two things:

  1. We don’t like competitions because we are afraid; and,
  2. We don’t believe our staff is capable to beat or be more creative than the competition.

As far as I understand, Google has GoogleVideo, so what is wrong with that? Why was Google video not a viable competitor? The reason is simple: it lacked the right technology, YouTube technology is far superior, but it also highlights that Google doesn’t believe that its engineers would have been able to improve GoogleVideo to a decent enough standard. This is the key argument, after all they want to distribute TV online with advertising.

The other argument is about the community and the user generated content. YouTube has tons of ‘customers’ unlike GoogleVideo, which has none. I dismiss that completely. Anyone that has seen the user generated content and read the user comments can quickly understand that we are talking about morons and any company with a brain would distance themselves from this. On top of that everyone knows how fickle these users are. Today is YouTube, tomorrow GodTube and after that GoKnowsWhichTube.

I think there is no point of in most these acquisitions. Historically companies that begin focusing on buying others lose focus on the core business – the product they initially developed – and ultimately succumb to competitors coming out of nowhere. In the car world, Toyota is now the market leader and it seems to be the only car company that hasn’t been indulging in buying and selling other companies. On the other hand, Daimler-Benz, for example, bought Chrysler and now wants to get rid of it.

In the entertainment world Warner Brothers is a fantastic example. They got Time magazine, even tough they never made the same amount of money and then they merged with by AOL (the largest merger in history) and the result was totally disastrous. They even drop the AOL name from its name in less than 5 years.

The real drive between these acquisitions are the shareholders and board members with stock options. They make lots of money because they sell overvalued stuff to others by making them believe that it is a good business. Ultimately this is only about a few men/women that stand to gain personally. The companies ultimately always lose and more significantly their key asset: the workers.


Environmental obsession

April 25, 2007

The British are fickle and easily swayed into new fads, and the current fad affecting the UK is the environment. Nobody cared about the environment in the 90s when all the other European countries seemed to be worried with it, but now that Blair and other opinion makers (e.g. Al Gore) told us that the environment is the key challenge of our times, we are completely obsessed with it.

People tell me that kids nowadays are constantly being taught sustainability and other trendy stuff like that at school. I presume this happens at the expense of other subjects like maths, english, geography given the poor preparation they seem to have. Why on earth we use schools to create citizens that follow particular moral trends rather than giving them the tools to become fully thinking citizens?

The press continuously bombard us with environmental stuff: a Channel 4 programme that claims that global warming never existed (to create controversy), Al Gore going around pretending to be thoughtful and insightful, Sheryl Crow doing college tours, companies telling us how we can best offset your carbon emissions, newspaper articles on how to be more green, Tesco giving money for plastic bags… the list is almost infinite.

The problem with all these obsessions with the environment is that nobody is willing to change the way they live. All the solutions are directed to a simple paradigm – how can we continue to live in a wasteful society without damaging the environment. A simple example, in London people commute like mad so they can live in their little paradises with gardens. Would they be willing to live in a 60s-style block of flats so they don’t travel so much? Not a chance. Nobody in the UK is prepared to make any significant sacrifice to change the way they live. So what is the point of all this? To make everyone feel good that they are actually doing something about it.

I keep telling everyone. Ignore the environment. That is not the real problem. The possibility of a civil war in China is what we all ought to fear.

Sheryl Crow

April 16, 2007

The other day I discovered that Sheryl Crow is retarded. She posted an entry at The Huffington Post that almost paralysed me; I thought it was a misprint. In a global warming post, Sheryl seemed to be very impressed with young people today and how savvy they are. She claims that they are well informed and ask the right questions. Sheryl also gives an example: “this one kid who, when given the mic, asked me what I was doing after the show! Then, he threw in that he didn’t have any homework that night. So cute. Ok, he waited by the bus and handed me his number and said for me to call anytime. Sorry Brent, I’m old enough to be your mom but I sure do appreciate your chutzpah.”. Is this an example of well informed? I guess it is, after all he was informed enough to know that Sheryl is now single and therefore he thought he had a change. Ah, the great difference between information and thinking. But Sheryl goes further into defending this guy, she tells us that this kid “will go far in life.”

You wouldn’t really know from all this that the topic of the post was global warming. The only global warming-like reference? Her tour bus runs on biodiesel and she thinks that is good. I rest my case. No wonder Lance left her…

Instant reward

April 4, 2007

I just discovered that my employer has “broaden the range of reward and recognition available”. Apparently, as a first move, they will be “introducing an Instant Reward scheme and the primary element is the use of gift vouchers”. Great, I cannot wait for this…

There will be two types of vouchers available: a phenomenal Marks and Spencer voucher and super useful high street voucher — because M&S is not part of the high street!

My employer claims that this will “allow managers quickly to recognise where people have gone that extra mile and shown initiative in the areas of customer service and people management.”

I cannot wait for the next moment when I do something okay and I get a five pound discount for the M&S lingerie section. Since when outdate telemarketing strategies became acceptable to use around here? This is truly depressing.

I can only conclude one thing. My employer assumes that me, and my colleagues, work solely as a means of continuing/propagating our inane consumerism attitude and nothing else. Now I understand, all that crap about job satisfaction and sense of purpose, it was all about M&S vouchers.


April 2, 2007

Zopa is one of the best ideas going around the web today. It enables you to bypass the bank both as a borrower and as a lender. If you need cheap money, Zopa is a fantastic option, since you can get much better rates than the ones you get from the bank. If you have some spare cash you can lend it at Zopa and make money at a better interest than normal current bank accounts seem to offer.

I think Zopa is even better for those that want to consolidate debts, particularly those that run debts on expensive credit cards.

Now if you are a lender you may ask; what if the people I lend the money don’t pay? Well, Zopa does two things to cover this risk. First, if persona A borrows £1000 from Zopa, you personally only lend them £10 with 99 other people lending £10. This spreads the risk, so if person A doesn’t pay you only lose £10 rather than £1000. Second, they do credit score checking like a normal bank and spread their borrowers across different markets. Some are more risky than others and you as a lender can always choose.

I have been using it since May 2006 and I think it is great.