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When will Steve Jobs level with his investors about his health?

2009-06-24T19:14:33-07:00

Steve Jobs' health is the center of a discussion about CEO privacy - again! And once again it is a divisive issue. Doubt me? See the comments on my friend Joe Nocera's post yesterday. They say he hates Jobs, that he is using his illness for his own publicity and worse. Many claim to be Apple investors, saying that because they are fine with what Jobs is doing, Nocera should be.

And people wonder why they lose money in the stock market ......

CEO privacy on health matters is typically complicated. Putting personal issues aside, a CEO that goes into too much detail about his health problems can unnecessarily undermine his ability to lead. If a CEO is hospitalized for an asthma attack do his investors have a right to know? Untreated asthma attacks kills people all the time. I side with the privacy advocates on that one.

But the disclosure issues around Jobs' health are easy: Jobs has encouraged everyone inside and outside Apple to see him not just as its CEO but as an irreplaceable superhero. That means the state of his health is relevant to investors. Period.

This isn’t ghoulish. It’s business. Jobs’ ability to make others see him in exalted ways has been of measurable value to Apple above and beyond that of any ordinary CEO.

It enabled Apple to negotiate deals with record labels eight years ago when every other company had tried and failed. Why were those deals important? They were the engine behind Apple's iPod and iTunes store, which changed the way the world buys and listens to music.

Three year ago Jobs' charisma enabled Apple to build a cell phone in a totally new way - without the interference from carriers. The iPhone not only has been a hit, but it has changed the face of the wireless industry forever.

There is just no getting around the fact that without Jobs, Apple is not as valuable a company. He has worked hard to make investors think he is irreplaceable, and he has succeeded.

I don’t need to know Jobs’ prognosis. There is so little certainty in medicine that it would be meaningless. Dick Cheney has had a bad heart for nearly 30 years.

But now that Jobs is back at work, I’d like to see him stand up on stage, tell me once and for all what has happened to him in the past year, and tell me that, for now at least, he is OK. Jobs' doctor has finally spoken. Now we need to hear from the patient.

Doing that would certainly be better for Apple employees, investors, vendors and customers, than the outright deception and associated speculation that has been going on for the past year.

Why Google needs better antitrust advice

2008-09-21T23:05:35-07:00

This is a big week for Google. Its new mobile phone software called Android is debuting, and there will be much debate about whether this much hyped project is going to get any traction. But that discussion may get drowned out by another. It seems as if everywhere you turn in the past two weeks, someone is wringing their hands about Google, the monopolist.

Google is trying to get a mega advertising deal with Yahoo approved by the Justice Department. Advertising agencies, a bunch of big and small advertisers and - big surprise - Microsoft, are all crying that Google is hell bent on world domination and want the deal blocked. Google says the accusations are ridiculous and has stepped up its defense in recent days to press that point. It says Microsoft isn't really credible on antitrust matters, after all. Moreover, it's hard to be a monopolist when you don't have any pricing power. Google ads are auctioned to the highest bidder, not sold in the conventional sense.

Easy, right? Wrong. The truth is, Google has more control over pricing than it lets on, and it is going to need to do a better job of explaining that in the coming weeks if it doesn't want to see this deal - and maybe all future deals - go down in flames.

It is absolutely true that Google's ads are auctioned, but it is also true that Google sets minimum bids for those auctions on an advertiser by advertiser basis. That means that if Google doesn't like you as an advertiser, your price per click - the way advertisers bid on Google ads - will have to be higher to get top placement in search results than an advertiser Google likes a lot.

How do you know whether Google likes you or not, if you're an advertiser? The answer to that question used to be clear. If your ad was popular, it meant Google liked you, and you had to pay less per click than if your ad was unpopular. If your ad was unpopular, it often didn't get listed at all. But you knew what to do. You made it better and tried again. Advertisers whined about all this at first, but when they saw how much better their ads performed compared to other networks, like Yahoo's, they shut up. Indeed, Google's obsession with ad's quality is at the root of why it is such a successful company.

So what's different? Google has made the way it measures ad quality a lot more complicated, and it hasn't done a very good job of letting advertisers understand what all those variables are and how each one affects the overall measurement of ad quality. For example, part of an ad's quality score now depends on whether dozens of raters working for Google around the world like your site and the ads on your site. Google's position is that it doesn't want users clicking on Google ads and getting taken to sites that aren't "useful." Google says this approach improves the user experience, and it probably does. However, the changes also mean that it has become harder and harder for advertisers to understand how to tweak their search ads to get the best placement - and they no longer have any real choice about where else to go.

I don't believe that Google is becoming another Microsoft. It is not using its position to unfairly crush competitors. Indeed, part of he reason Google added so many quality measures to its ad bidding process
was to stop ad arbitrageurs from gaming its system. And I think Google has succeeded. Indeed, Google executives openly talk about how improvements in ad's quality allows it to show fewer, but better ads. Because the ads work better, both Google and its advertisers benefit.

But the world applies different standards of behavior to corporate heavyweights than to young fast growing companies. When you're the latter, as Google has been for most of the past 10 years, telling your customers that you are doing what's good for them - and delivering - makes you brilliant. When you are the Google of today, it can also make you seem arrogant and pushy.

More transparency would do wonders. Even Google's biggest supporters have criticized it for becoming something of a black box to the outside world. I understand why Google doesn't want to do this. But stubbornness in the face of antitrust cops, as Microsoft will surely attest, enables you to win a few battles, but ultimately lose the war.

We don't care. We don't have to. We're the phone company.

2008-09-14T18:13:54-07:00

I was just reminded why Americans hate their cell phone company. I just tried to downgrade my account with Sprint and discovered that I couldn't do it online. And then, on the phone was told, in effect, that it was going to cost me $50. I have no contract anymore and have been a customer for more than 5 years. So I asked the nice woman on the phone why that was. It obviously doesn't make sense. "I honestly don't know," she said. I actually believed her. $50 isn't going to kill me, but it's not chump change either. In most parts of the US that's dinner and a movie for two.

Why Steve Jobs is so thin

2008-09-10T13:47:01-07:00

Steve Jobs announced a new line of iPods on Tuesday; but getting almost equal time with his new products - once again - was his health. He looks too thin, and for such a public person, - and one whose existence means so much to so many people - that is something that is just hard to ignore. But if his pancreatic cancer has not returned - and I believe the reports that say it has not - what's wrong? I suspect it's that his digestive system hasn't been the same since his cancer surgery. The operation saved his life, but Google "Whipple Procedure" and you'll see that it's still a ghastly operation. Surgeons not only remove a chunk of the pancreas but a chunk of the stomach and small intestine. Jobs apparently had to have another surgery earlier this year related to that. My former colleague Philip Elmer DeWitt flicked at this on his blog back in June. It appears to need repeating.

Google's Chrome shows the shortcomings of open source software

2008-09-06T18:28:00-07:00

I've been thinking about my friend and colleague Steve Levy's awesome Wired piece on the making of Google's new browser and realized the following: Chrome is the ultimate statement about the shortcomings of the open source movement.

Yes, I know that Google is open sourcing the development of Chrome and yes, I know that Google has run its architecture on Linux from its founding. But read the piece. The reason Google built Chrome was because one browser - IE - is controlled by enemy Microsoft and the other, Firefox, is a hugely successful open source project. In both cases that means that while the future of Google's business depends on the browser, it has no control over either piece of software. Google's approach to business is looking more and more like Apple's every day, wouldn't you say? Not that there is anything wrong with that ...........