Monthly Archives: March 2010

Cut Costs And Get Fit During Down Times

How to  Deal with a New Economy

Weakening Firms Focus on Cuts, Not New Products – The Daily Stat – March 29, 2010 – Harvard Business Review.

This makes sense. During the good times, top line growth is what really drives the business. The coordination required to keep the organization closely behind sales takes a lot of effort. It is when top line growth is stagnant, when management can spend time and attention towards optimizing processes and installing best practices to tune the bottom line.

Accounting Tricks: Verizon’s Leaving A Trail Of Bankrupt Wreckage Behind Them – After being slammed for Fairpoint deal, Idearc shareholders sue telco… –

The class calls the spinoff “a massive, Enron-style debt off-loading spin transaction”. The class claims that the Idearc flop was “just one of three such transactions accomplished by Verizon Communications [that were] followed by quick bankruptcy – Hawaiian Telecommunications Inc., Idearc Inc., and Fairpoint Communications Inc.” The shareholders claim Verizon did the spinoff so it “could escape federal taxation,” and resorted to it only “after a series of failed attempts to sell the subsidiary to potential bidders.”

via Verizon’s Leaving A Trail Of Bankrupt Wreckage Behind Them – After being slammed for Fairpoint deal, Idearc shareholders sue telco… –

Microsoft’s mobile strategy should learn from Android | The Open Road – CNET News

Microsoft could play an open game. Tim O’Reilly has suggested Microsoft has every incentive to be the leading proponent of the open Web as it plays catch-up with Google. That same incentive applies to its efforts in mobile. Microsoft needs an open ecosystem to win in mobile, and scaring off developers like Mozilla isn't a sign that it's on the right track.

via Microsoft’s mobile strategy should learn from Android | The Open Road – CNET News.

I’m a big fan of accounting forensics

John Hempton is the kind of guy who compares the numbers for quarter-by-quarter average assets in Bank of America’s annual reports with the numbers for total quarter-end assets in its quarterly reports. And guess what — if you look at the year 2006, BofA’s total assets were always substantially lower at the end of the quarter than they were over the course of the quarter as a whole.

via Felix Salmon

Short Term Vs. Long Term

There are countless examples where fat margins in the short term guarantee trouble in the long term.   Do companies even have a choice here if shareholders are putting the pressure to chase the sure thing?

Part of the answer, academics and industry analysts say, is that for years American carmakers made so much money from high-margin behemoths like pickup trucks and S.U.V.’s that ignoring quality held little financial downside — at least in the short term.

via G.M. and Ford, Channeling Toyota’s Focus on Quality –

Microsoft outlines the network effects in search

All of this is quite important because search is so central to how people navigate the Internet, and because advertising is the main monetization mechanism for a wide range of Web sites and Web services. Both search and online advertising are increasingly controlled by a single firm, Google. That can be a problem because Google’s business is helped along by significant network effects (just like the PC operating system business). Search engine algorithms “learn” by observing how users interact with search results. Google’s algorithms learn less common search terms better than others because many more people are conducting searches on these terms on Google.

These and other network effects make it hard for competing search engines to catch up. Microsoft’s well-received Bing search engine is addressing this challenge by offering innovations in areas that are less dependent on volume. But Bing needs to gain volume too, in order to increase the relevance of search results for less common search terms. That is why Microsoft and Yahoo! are combining their search volumes. And that is why we are concerned about Google business practices that tend to lock in publishers and advertisers and make it harder for Microsoft to gain search volume.

via Competition Authorities and Search – Microsoft On The Issues.