Mark Pincus Blog

Frank Rich on Corruption Thriving in Washington

everyone should read frank rich's great op/ed piece in this week's ny times detailing how the same 'enron' culture of crony corruption is thriving in DC today on both sides of the aisle. it's surreal to me to read how bush continues to appoint totally unqualified people for solely political purpsose, how even after the scandal and great loss due to his ridiculous choice (michael brown) for FEMA director he is replacing the guy with yet another crony, and how the whistle blower who outed the govt's awarding $8B in no bid contracts to haliburton has had to endure demotions and ridicule. (craig also posts on how he has now admitted to ignoring warnings about katrina)

frank says...The mutant Enron version of the C.E.O. culture still rules in Washington: uninhibited cronyism, special-favors networks, and the banishment of accountability.

safari

safari
Originally uploaded by markpinc.

i'm just back from africa where there was no internet connection. not sure how i survived but it was a nice break where i rediscovered the joys of reading in a non electronic form. i also got to meet a lot of new types of animals. i highly recommend trying a safari, however, put a mountain climb in the middle or end as you cannot exercise at all on safari!

Community vs. the Corporation

jeremy zawodny had a great post covering a piece by robert young on the dilemma and internal battle faced inside companies like yahoo in deciding how far to go in handing control over to their communities...

I've got one foot inside the company and the other firmly planted in the community. The two are often at odds and, more often than not, I side with the community.

This makes some people at Yahoo very unhappy, but I really believe that it's in the best interest of Yahoo. I'm not doing it just to be a pain in the ass. Some people are really good at running a business. I like to think that I do a decent job of representing community interests when I try to do so. And making sure the community is heard loud and clear inside the company walls helps keep us honest. That's why I say many of the things you read here.

The two camps need to better understand each other.... somehow.

The transition from the old way to the new is not easy, but we're making real progress. Some groups are getting their heads around it faster than others. Having the Flickr folks in the Yahoo family helps. Flickr is all about community. The same goes for Chad, Danah, Alex, and many of the others who've joined Yahoo this year, either through acquisition or relentless pursuit of them. The more community-minded folks we hire, acquire, and breed, the better off we are in this brave new world. There will be more before this year is over.

and robert young writes...

It won’t be the corporation that locks its customers into a walled garden any more; instead, it will be the people themselves who create their own high switching costs. For instance, if you are an eBay seller, your switching cost is not so much the relationship you’ve created with eBay itself and the store you set up, it’s the reputation and trust you spent years building with fellow members of the community. Similarly, if you are a member of MySpace, it’s not the web-page and blog you spent time constructing, it’s your social network of cyber-friends you’ve cultivated and accumulated over time.

At the end, the lesson is one of a paradox. As the power shifts increasingly towards community, the corporation loses its grip on the traditional means of control. Yet, by letting go of control, the corporation creates an environment where the community willingly creates its own switching costs. Such changing market behavior, which is structural and permanent for any industry being usurped by the Internet, must be met with a corresponding shift in corporate mindset. Otherwise, a “generation gap” will exist between the members of management themselves (old vs. new media), as well as the company and its market. In my view, if there is one company that seems to grok such dynamics better than anyone, and is in the process of executing superbly against these new set of challenges, it’s Yahoo!

my response...

i totally agree with this concept. this has been an issue at tribe since its founding. i would love to start a community site where the community has a much bigger role in deciding its fate. i do believe this is part of the brilliance of craigslist. craig is fanatical about listenting to the community both so he doesnt fuck up and so they trust they are partially in control. what's hard is that often a small part of the community is most vocal while the silent majority is too busy to bother. tribe made some big mistakes over the past couple of years by focusing at times more on business model than user love. the lesson from web 1.0 was that user love alone didnt make successful companies. in the first chapter of web 2.0 companies like myspace seem to be proving the opposite as that company has had little success in getting high ad rates or monetization per member, but such massive success on uniques and page views it doesnt seem to matter.

Going to Africa

my girlfriend, mo, and i are going to africa friday for a short one week safari. still confused why it's called a safari when you dont actually hunt anything. we're going to a couple of camps in kenya. i have no expectations and all i've really heard so far is to take malaria pills and really good bug spray. anyway, i'll report back with a ton of pix i'm sure (assuming a) i come back and b) i can operate the camera and charge the batterries).

if i were ceo of yahoo...

i had a fun lunch with a new friend from yahoo the other day and started imagining what i might do if i were ceo of that company (and if anyone would listen to me, which i know is a big if for any ceo).

first, i'd apply the 1% rule that we followed when i was at TCI. john malone's approach was dont waste your time on any investment or new project that doesnt have a reasonable expectation of increasing the entire company asset value by at least 1%. TCI was worth $20 billion, so we had a $200 million hurdle on any significant project. seems like yahoo (which would have a $470 million hurdle) is dabbling in some activities that  dont meet that but for the most part i'd give them a good grade there.

what would be truly fun to me would be making some big bets around some of their marginal or tertiary properties. i'd love to take hotjobs and yahoo personals and test some entirely different approaches to the market that might position them on top in the web 2.0 world. seems to me that both of these companies spend huge amounts acquiring their audiences (i may be off as yahoo may already be leveraging its properties well on this front).  if they are spending big on acquisition, i'd love to see what happens if i turn this spending off for a quarter and substantially reduce my prices. i might find they contribute way more cashflow to my bottom line.

i'd love to take yahoo classifieds and turn it into an anchor tenant for an open classifieds marketplace. i'd make it a web service, allowing any player to pull my listings feeds into their own (with full attribution back to me). i'd encourage a bunch of existing and new players from local papers to tribe.net, oodle and others to build their businesses on top of mine. i might go even further and pioneer a new open source ebay, which might work like DNS where everyone's listings are replicated all over the network so that anyone could get in the listings business and achieve scale. why would i do this? becuase as the biggest player, i would have the biggest share of the combined database which means that i would get even more traffic back. every player from sj merc to tribe would be ultimately sending their traffic to me for free. i might even develop value added services like user ratings and dynamic pricing that i could offer back to all these players. i'd have an advantage in building these new services fastest too. this might also increase the entire market size as classifieds suffers from continual fragmentation.  if there existed a single market that all listers tapped into there would be an immediate network effect topping even ebay in power to lister and responder. 

to do this, yahoo would merely need to...

1. identify and publish open standards for meta data
2. crawl, aggregate all other data. (oodle would be a good place to start) and then normalize and tag that data
3. and then offer that data up to the world

given yahoo's bold, impressive moves towards the new open web, i'm sure they are close to executing these or similar ideas. it will be fun to watch, even more fun to find new ways to participate.

Ebay/Skype + Oracle/Siebel

it seems like news has gone into hyper drive the last week and now every time i turn around i've missed another major story. so apparently ebay just bought skype and oracle took out siebel. wow. two huge stories within two quiet days. seems like one is a giant consolidating its hold on the new world, the other a giant consolidating the old world. 

it's always been my belief that companies revert to major acquisitions when their own numbers are falling short of expectations. it's a pyramid scheme where the company can mask their bad numbers within the 'pro forma' combined. some lucky ceo's even hand the baton over before the music stops. in the past i've used major acquisitions as a signal to short stocks. this worked amazingly well  with peregrine systems which seemed to announce a bigger acquistion every quarter until they were eventually caught cooking their books. 

now i'm not rushing out to short oracle or  ebay but another part of the rule is the less strategic and synergistic the acquisition the higher the liklihood that the management team is just selling their own stock while the price is high. of course aol was the best example of this gambit.  based on this rule, ebay would be the stock to short as i just cant see any strategic-ness to owning skype. 

The Burn

8
Originally uploaded by abia.

i finally saw the burn. now you can too. this is a pic my friend took.

burning man 05

burning man 05
Originally uploaded by markpinc.

just back from a third amazing annual burning man experience. given that complete agreement that it's impossible to describe i wont bother. i will say this was the first time that i went for the full week and first time i stayed through the actual 'burn'. while i loved it all, i found that the energy changes completely after the burn and there seems to be an onslaught of 'tweakers' (seems to be the serious druggies from reno).

anyway, a lot of people have considered checking out burning man and seems like this year most of them came. amazing how many out of context friends i saw there. to their credit they all seemed to get the idea of participation and take it a step further.