Tuesday, December 20, 2005

Why Google's Management doesn't really matter

"But, in terms of the power of the business model, look at, for example, Messrs Page and Brin, who created the ubiquitous product Google. This is a great product, but I believe there are at least 100,000 executive managers in the world qualified to run the company. There are probably at least 10,000 who could sit in the CEO chair, and management?s performance wouldn?t change a whit.

I disagree with Bill Cara on this. The CEO (or figurehead) of a company provides a layering of personality and influence on its executives, who gets hired, and who invests in the company. It also provides the brain (or at least the head) of the company.

If a CEO or a management team doesn't have qualities that influence people, the people following them won't be influenced.

If Sergei & Larry weren't the search engine gurus that they're cracked out to be, they wouldn't have taken Google off the ground. Sorry Mark Cuban, but IceRocket ain't no Google, and I'm pretty sure you didn't do your PHD in search engine algorithms. However, you'd make a good sports team owner, superfan.

If Bill Gates wasn't a cutthroat businessman, technology prophet, and also the stereotypical geek, his business wouldn't be doing so well. I don't think he would work as the head of McDonalds, though he could fit in with the Simpsons pimply-faced teen image. (from the way the Pirates of Silicon Valley movie portrayed him anyway)

If Warren Buffett didn't have the respect of his peers & the qualities of being frugal, straightforward, honest, and trustworthy, he would not be the head of the cult of value-investing followers.

But back to Bill.

So I ask, why are some of these persons paid multi tens of millions per year to run shareholder-owned corporations? I?ll tell you: boardroom politics. Nothing more.

And if these individuals were not complicitly linked to and supported by the sell-side, many of them wouldn?t even have a job.

Agree with you on this one. Connections make sense. Hello again Mark Cuban. Hi Bill & Warren, bridge-playing friends.

Once securities traders can see the business model for a company (and its relationship with interest rates, the economy, and commodity prices), they can pretty much tell how the company?s metrics are going to play out for the time they will actually hold an unhedged stock in their portfolio, which in the case of the average professional investor is less than one year."

Interesting to note that the average professional investor trades companies like baseball cards. It seems that baseball cards are like stocks. Every year there is a new superstar, but only a few who stand the test of time.

Aren't baseball cards way down in value lately?

No comments: