Beating up on the nerds

Joel Kotkin pens a provocative critique of the new wealthy of Silicon Valley, and their growing political aspirations.

It’s a characteristically good piece of writing, full of much new reporting and many specifics. One still stretches to liken this lot of nerds to the industrialists at the turn of the 20th century, though. The Googlers’ private planes might keep people up at night; the Carnegiers’ private lake killed two thousand people.

The victims of the smartphone boom are real, and as Kotkin points out, Chengdu and Guangzhou aren’t represented in the U.S. Congress. But no one is about to stop using smartphones.

And while the techies’ endless tour of TV shows grows tedious, have they really succeeded in making many political changes at the expense of the public good?

Whatever their aspirations, neither the Googlers nor the Koch Brothers, George Soros, Chris Hughes, Shelly Adelson nor any of a dozen other favorite targets has managed to install a puppet regime in Washington.

So, a bunch of guys are throwing tasteless parties and trying to pay as little as possible in taxes. What else is new?

The Four Sons of Passover, reinterpreted for the modern age

March 2013 / Passover 5773

The Torah speaks of four sons: The wise doctor, the angry lawyer, the middling customer service rep, and the backpacker taking the year off and flirting with eastern religions.

The wise doctor asks: “Can eating unleavened bread for eight days really be good for you?”

To him, you shall say: “Better than eating General Tso’s chicken 50 times a year.”

The angry lawyer asks: “Why are we talking about the Exodus from Egypt when at this very moment, thousands of people are gathering outside the Supreme Court, calling on the Justices to compel the states to recognize the sanctity of same-sex marriage? #@% this (#&*@%!”

To him, you shall say: “Right there with you, kid, but I’m your father. You’re not billing me for this. Eat your charoset.”

The middling call center rep asks: “Sorry I mispronounced your name. Can I have your address and the last four digits of your social security number again, and then put you on hold for like half an hour?”

To him, you shall say: “You’ve been a disgrace to me since your mother brought you kicking and screaming into this world. Have some gefilte fish and try not to say anything else that embarrasses us in front of the Cohens.”

The backpacker who’s flirting with eastern religions is too stoned to ask anything. To him, you shall say: “The Beatles went through it, too. But if you’re gonna learn the sitar, actually learn it, okay? I wish you’d just gone into dentistry.”

Will Ferrell will adapt “Tiger Mike” into a movie

No, he probably won’t, but oh how I wish he would. In Anchorman, Ferrell immortalized the conceited 1970s newscaster Ron Burgundy, a completely unexpected delight.

Today, instead of making a more than likely underwhelming sequel, Ferrell should play Edward “Tiger Mike” Davis, the legendary CEO of the Houston-based Tiger Oil Company, which declared bankruptcy in 1980.

Tiger Mike may have been the greatest bad manager in the history of the workplace, and he’s written more punchlines than Ferrell would ever need. His unparalleled memos, Platonic forms of incompetent managerial correspondence, would give most human resources and internal communications professionals an aneurysm. They establish him as a jaw-dropping boor who nonetheless manages to elicit your sympathy.

“When you are on the road or out doing my business, that is exactly what I expect you to do 100%,” Tiger Mike writes in a typical memo, dated January 13, 1978. “I do not want any fabricated expense accounts, drinking or carousing around on my money. Telephone calls for business purposes only will be accepted — not personal.”

So far, so good, until:

“This will apply to all geologists, geophysicists, and whoever the hell it may concern who works for me.”

“If you don’t like it, you can do the same thing the ones in the first memo got told — pick up your check!…” he continues, concluding “Do not speak to me when you see me. If I want to to speak to you, I will do so. I want to save my throat. I don’t want to ruin it by saying hello to all of you sons-of-bitches.”

Often, it’s not so much the expectations Tiger Mike has of his employees as the way he communicates them.

From day to day, he voices impotent fury punctuated by a range of demands and even occasional appeals to common decency. Meanwhile, it seems, his employees steal his cigars, candy and medicine, use his private bathroom, charge personal phone calls to the office, and drink on the job. And instead of managing them, he condescends to them in a series of ever angrier and more ineffectual memos, as his company careens off to hell.

As any reader will recognize, Tiger Mike’s tone-deafness alone almost guarantees that his memos will have the opposite of their intended effects, and you can only laugh as you imagine how his employees reacted to them.

“I have noticed that the rugs throughout this office are very dirty from people spilling things on them,” he writes on June 1, 1978. “I will have them cleaned (which will cost me $1,000.00); and, in future, if people cannot carry their coffee without spilling it on my rugs, we will do away with the coffee pots entirely just as we did away with the food.”

I would gladly pay twice what a movie ticket now costs to see Will Ferrell own that role.

Sporting a moustache of mythical proportions, he kills it in Anchorman, subjecting Christina Applegate — a great foil, and one of the only ones who doesn’t bust out laughing beside him — to all sorts of misogyny and boorish pick-ups.

Tiger Mike provides more material than Ron Burgundy ever did. How could Ferrell not hit it out of the park with this stuff?

I’d pay for Facebook

With Facebook now preparing to launch its new Newsfeed format, friends often ask whether or not I’d buy stock in the company. Not at the moment, but one condition under which I’d consider it is if Facebook allowed me to pay for its services.

Mark Zuckerberg tells us Facebook is free, and “always will be.” That’s great, but I’d pay them $50 a year if they’d let me strip out all the ads for games, certain types of sponsored posts that only ever litter my feed, and put my timeline in true chronological order.

Right now Facebook earns about $5/user/year. When you have nearly a billion active users, that’s still a lot of money, but it’s a lot less than Zuckerberg and company could make if they finally started thinking about the service they provide as a business, and their users as customers. I am literally asking them to take my money and they’re telling me no.

Facebook initially faced the same problem large general interest newspapers do, in that you’ll find yourself less and less inclined to pay for them, since you have so many free substitutes available to you. But the network is much more established than LinkedIn (more professionally focused) and Google+ (too substantially similar, and too late to market), so it enjoys a near-monopoly in its space. And Facebook now brings you so much spam, and so many companies and other interests trying to game EdgeRank with sponsored content that it may now be thinkable for it to transition to a Freemium model.

Suppose 5 percent of Facebook’s active users — 50 million people — paid $50 a year for their service. That’d be another $2.5 billion a year in revenue for the company, and as much as 50 percent more than it’s earning now. Does the company really want to leave all that on the table?

As Mark Zuckerberg himself famously said when he filed Facebook’s S-1 to go public, “We don’t build services to make money; we make money to build better services.”

Fine, but people buy stocks to make money. I’m willing to give you some, and you’re saying no.

Are Warren Buffett’s hobbies overtaking his work?

In his latest letter to shareholders, billionaire Warren Buffett offers a much-discussed explanation of the news business, and why he believes newspapers can still be sound investments even after the classified advertising revenues on which they depend have plummeted 90% in a decade.

As a reader and citizen, I’m glad to see him saying this, in a way few other people can. But as an investor, I’m stunned.

What fund manager wants to tell his shareholders — in a letter announcing subpar earnings, no less — that he spends even a fraction of his time buying things he says only bring in extraordinary earnings margins when they enjoy local monopolies?

In his closer, Buffett notes that “it’s only been in the last year or so that other papers, including Berkshire’s, have explored pay arrangements. Whatever works best — and the answer is not yet clear — will be copied widely.”

This man commands an investment company worth tens of billions of dollars. Here he is, telling the people who trust him with their money that after a year in which he failed to make a single major acquisition, he’s spent $344 million buying 28 newspapers without clear business plans.

Buffett’s take on the news business is beside the point. His job isn’t to buy anything that interests him and happens to have okay economics behind it. It’s to buy the BEST assets he can, to create the most shareholder value.

As his colleague Charlie Munger told him half a century ago, it’s better to pay a fair price for a wonderful company than a wonderful price for a fair company.

Maybe it’s no surprise that the Oracle of Omaha is no longer beating the market.