Finance Geek

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Rebels fighting against Bashar Assad in Syria’s civil war are outgunned, outmanned and largely aren’t professional soldiers. So they’re turning to social media for tutorials in how to use their weapons.

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We’re still waiting for Google’s Data Center Navy. But Dell is doing its best to feed the Data Center Air Force. On Tuesday, the Texas computing giant took the wraps off what it calls the Dell Tactical Mobile Data Center — a kind of data-center-in-a-box that’s specifically designed for military outfits looking to air-lift temporary computing power into emergency situations.

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Follow The Daily Ticker on Facebook! Testifying on Capitol Hill Tuesday, Fed Chairman Ben Bernanke conceded the obvious: “Economic activity appears to have decelerated somewhat during the first half of this year.” “Risks to economic growth have increased,” he said, citing Europe’s debt crisis and the U.S. “fiscal cliff” as big concerns. Predictably, the Fed [...]

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A century after the great Antarctic explorers crossed that icy continent, many of their destinations remain inaccessible — at least on foot. From your desktop, though, you can visit huts built by Ernest Shackleton and Robert Scott, even plant a virtual flag on the Ceremonial South Pole.

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Follow The Daily Ticker on Facebook! In the midst of the LIBOR scandal comes another black mark on the U.S. Treasury Department — recently published documents show that some employees have been abusing their government responsibilities. A handful of officials who worked for the Office of the Comptroller of the Currency (formerly the Office of [...]

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Marissa Mayer is a big deal. She’s Google employee 20, the first woman engineer, and the highest ranking woman there. Well, she was. As of yesterday, she’s a Xoogler. Mayer quit Google in order to become Yahoo’s new CEO. As if that weren’t enough, the same day she made the announcement, she tweeted that she and her husband were expecting a baby boy in October. That’s right, Yahoo hired her with a visible baby bump.

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Follow The Daily Ticker on Facebook! The economy is the main event but the LIBOR scandal will be on the under-card when Fed Chairman Ben Bernanke testifies before Congress today and tomorrow. (See: Bernanke Ready to “Throw in the Towel on Inflation”: Jim Rickards) At issue is what the Fed, and other bank regulators, knew [...]

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Follow The Daily Ticker on Facebook! Procter & Gamble’s (PG) stock price is up nearly 6 percent since last Thursday’s announcement that Pershing Square Capital Management’s William Ackman has taken a $2 billion, or 1 percent, stake in the consumer-product manufacturer. Ackman is known for taking large investment positions in companies to try to sway [...]

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If you were to tick off the ideal leader for Yahoo, you?d wind up with a description that sounds a lot like Marissa Mayer: Highly technical, product-oriented, as Internet-savvy as anyone in the world, and charismatic enough to energize followers.

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When a business team with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.

- Warren Buffet

I love this quote. The FT printed it in their Lex article on Marissa Mayer taking the CEO job at Yahoo (paywalled, so no link) but it applies equally at startups. When a company is underperforming it is tempting for boards and shareholders to believe that the problem is with execution rather than with an underlying underlying feature of the business. That way they can reach for the easier fix of changing management and avoid dealing with the fact that their investment thesis was flawed. However, as anyone who has been around lots of companies knows, sometimes the problems are fundamental in nature and radical restructuring is required to save or maximise value, not just better execution. This is the point I think that Buffet is trying to get to with this quote – when a business has flawed economics (fundamentals) then good execution alone doesn’t help.

Mayer is a very impressive character and Yahoo have done well to land her. It is also easy to see the attraction from her side of trading a senior exec team roll at Google for a CEO position at a $19bn market company. The tech press this morning is full of speculation about whether there are enough good bits in Yahoo (large audience, good media partnerships, strong cashflow) for Mayer to work with. I think she will have to be brilliant to succeed – Yahoo’s technology, products, and culture are a mess, they are rapidly losing market share, and the good bits aren’t the sorts of things you can build a company on – unlike, say, a dominant position in search. Perhaps most concerning is that it doesn’t sound like she has a mandate for truly radical change. Mayer is talking about spending her first period in office touring the company and getting to know the business better before outlining her strategy. If she was planning a radical overhaul I would expect her to be starting to build momentum now.

I saw something similar play out at one of the startups we were involved with. The company was missing budgets and failing to grow, so we brought in a new CEO who had previously been successful at a similar business, but his better execution didn’t translate into an improvement in business performance. In order to turn things around we had to radically overhaul the business model. The core product proposition remained the same, but we dropped the price by up to 60-90%, cut investment in R&D by a similar amount and innovated to find a much more efficient sales process. The company isn’t out of the woods yet, but has recently secured new investment and is doing much better. With hindsight we made the mistake I described above of taking the easy option of fixing the execution when the business model was the issue.

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