Crazy Guide to the Internet

This is a video that Shiv Shinh made back in college. Totally hand it to him for ingenuity. The brief can be found on Shiv’s blog.

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Found this on Adotas.

Sergey Brin on the Microsoft-facebook deal - “Some of our competitors might be willing to spend very large amounts of money…and we’re really interested in doing sustainable economic deals so we would rather not participate in those sorts of transactions.”

Coming from the company that drove inflation into web company valuations (on the back of strong free cash flow/stock) to keep Yahoo! and numerous other web players out of the acquisition ring on numerous occasions. Ouch, must hurt!

To quote another Googler, the views expressed here are mine alone, and not those of my employer.

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Little long article, but I guess whoever belongs to online industry would like it

With the occasional jab, duck and left hook three leaders of the internet advertising industry faced off in person at the Right Media Open conference on Tuesday to debate the future of ad exchanges and online advertising. Showing up to the panel representing their advertising business and future ad exchange was Scott Howe, President, Microsoft’s DrivePM, Mike Walrath, CEO of Right Media, and David Rosenblatt, CEO of DoubleClick. The discussion that started with a friendly round of respectful back slapping quickly moved to reflect the competitive and cut throat race each leader is in.

Each panelist was quick to start trumpeting the strengths of their respective ad platforms. While Mr. Rosenblatt calmly answered what differentiates DoubleClick’s ad exchange from Right Media’s, Walrath was clearly irritated by his response and image that only DoubleClick’s exchange had premium publishers, “One of the key differences is that we have top premium publishers,” said Rosenblatt. In response Walrath pointed out the status of his new employer, “Correct me if I am wrong, but isn’t Yahoo one of the largest premium publishers on the Internet?” he said.

This battle of ad dominance is marked by the ongoing and expensive consolidation between the titans. Yahoo’s acquisition of Right Media in April for $680 million, Microsoft’s acquisition of aQuantive in May for $6 billion, and Google’s hopeful swallowing of DoubleClick for $3.1 billion, highlight the importance of dominating the technology, supply and the demand. While being asked about why Microsoft was the right partner for aQuantive and DrivePM, Howe put on his best sales pitch, “Building ad technology is very complex and Microsoft’s strong history of software development will help us win the ad technology war. We have big big plans for AdEcn and our ad serving platform. Microsoft brings the resources to the table to compete.”

Acquisitions are typically marked with frustration and failure as companies with different DNA attempt to get married. However the competitive heat was strong enough here that each group preferred to highlight how conflict wasn’t the case with these integration efforts. Howe was more pronounced than normal with his excitement, “The cultural integration is going extremely well and we’re very lucky to have the Microsoft resources and money behind us, before we were a small company with little money and limitations. We realized that in order to win, Microsoft was the right partner.”

While the bicoastal relationship between the New York based Right Media and California based Yahoo may be a saving grace as the Right Media team continue to build their business while integrating one bicoastal flight after another, “The cultural integration with Yahoo has been good, they have a real commitment to openness and get it,” said Walrath. Rosenblatt was unable to address the specifics of integration between Google and DoubleClick as he continues to face legal review and approval of the deal.

While each company fights it out in the market, one of the more sensitive topics was the Google and DoubleClick acquisition. With the latest calls of anti-trust and for Government intervention to stop the acquisition, Rosenblatt was put on the hot seat with questions to defend the acquisition, “It defies commonsense to say that with this acquisition, with all the competitive companies out there, plus Microsoft’s competitive plans, we would kill competition. This deal is very pro-competition.” Microsoft has lobbied to have the acquisition stopped and Howe was quick to point out the issue, “As standalone companies DoubleClick and Google enhance competition, no doubt, but together they cover over 80% of the display market, this is very serious cause for worry.” Rosenblatt deflected the point by repeating that they were different and there was no conflict, “DoubleClick is an ad delivery company and Google isn’t.” Howe repeated his sound bite, “As standalone companies it’s not a problem, together it’s dangerous.”

Walrath was happy to point out that networks and exchanges are like church and state, “The conflict here is AdSense, which is a network, when a platform like an ad exchange or ad server and a network come together into one you have inherent conflicts.”Of course the consumer related concerns of such a merger surround the data and consumer privacy. Rosenblatt was quick to point out that he doesn’t speak for Google, but that privacy is very important to protect and consumers own their data, “We will work very hard to protect consumer privacy and we do not see much changing there.” DoubleClick has a controversial history of privacy concerns and Walrath was quick to summarize his view of the real problem, “You do not need to have a breach to have a problem, the perception to consumers is that their data is vulnerable, this is the real issue.”

The race to establish closed platforms, gather customers and win dominance is typically how markets are initially successful, however it was interesting to hear all three leaders say they would be happy to interconnect with other ad exchanges and support interoperability. “The economics of exchange businesses and networks aren’t so different. If companies want to be in both businesses I would support that and promote interoperability with other exchanges,” said Walrath.

Rosenblatt was quick to point out that he would be glad to connect with Right Media. It is unlikely that this will happen anytime soon as each company is working hard to sign up customers and create differentiators. Overall the panel demonstrated a strong mutual respect for their competition, but as each panelist repeated over and over that it is still very early in the race, it became obvious how important it is to establish early market dominance and make their ad exchange the platform of choice.

Pete Ryan pointed me to two posts on allfacebook that helped rid my blogging inertia

“Mark Zuckerberg dropped an indication that Facebook is considering opening up at some point. While there was no mention of when that would occur, the fact that they are considering an opening of their network is significant. By opening up their platform to make identities transportable will help them to become a Google competitor. Without opening their platform, Facebook is indeed risking becoming a fad. Conversely, the older generation’s presence on Facebook is expanding rapidly and this generation is known to stick with the sites that they use.

While it is impossible to say what would happen if Facebook falls off their high horse that they are currently riding or what will happen when Google launches their social platform, Facebook does have a shot at becoming an industry leader. It’s as simple as that. Facebook now needs to make all the right moves and currently they have a board of advisors that can help them execute successfully. If Facebook does indeed decide to make identities transportable, I believe they could become the center hub for a large portion of identities online.”

Though the Customer DNA wars have been on for a while Facebook can potentially crash this party with homegrown intelligence… would be interesting to know how this impacts their own valuation and companies like OpenID and Plaxo. What’s also really interesting is Google’s opinion that The web is the platform. Devaluing Facebook? Or love for the web the way it was supposed to be? I could argue either way.

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Twenty six of us were seated around a long U-shaped table. It was late in the afternoon. The room was semi-dark. Each of us had a plate of sweets and a bottle of mineral water in front. A third of the people seated here were CEO’s of large and famous Indian companies, some recently retired, others still very active in business. Another third were high-level civil servants. The rest was a mix of senior company executives and academics. A slightly graying 40-something man stood at the head of the U in front of a brightly-lit screen. Everyone was intently focused on what the man was saying straining to take in every word above the whirring sound of the air conditioners valiantly battling to tone down the heat from the October afternoon sun.
We were at IIM Calcutta’s quarterly board meeting. The Professor at the podium was walking us through some pretty revolutionary ideas for updating the curriculum for the flagship two-year Post Graduate Programme in Management- the result of nearly three years of debate within the faculty. A mandatory course in a foreign language, other than English, was the first of the many revolutionary ideas. The world is increasingly globalized, explained the professor, and our students need to be comfortable in dealing with people of other cultures. It was one of those ideas that catch you by surprise because once you hear it you wonder why you didn’t think of it earlier.
A compulsory course on Ethics was the next big idea. Of course, the professor quickly added, it’s not that we think we can “teach” people issues like ethics but it certainly was worthwhile to explore with young and impressionable minds what constitutes unethical behavior in business. Explore with them how to deal with bosses who sail too close to the wind in ethical matters. Perhaps even demonstrate to students that ethical companies get practical rewards such as higher stock market valuations. None of us around the table could quarrel with this either.
There were a few murmurs around the table when the professor mooted his next big idea- increase and emphasize the mathematical content of the programme. More and more stock trading is being done based on mathematical models, he pointed out and since the majority of the graduating class finds its way to financial service and consulting companies, being adept at mathematical modeling is likely to be a useful thing.
That’s when a really revolutionary idea was sprung on us. By a board member, a retired CEO. Is it possible, he asked, that our IIMs, espouse essentially an American way of managing businesses? Should we not be opening our minds to looking at other ways of managing too? Aren’t there lessons to be learnt, for example, from successful Japanese companies? Companies such as Toyota have used a subcontracting system to rise to the top of the world auto industry. What are the practices they have instituted that makes co-operation with suppliers possible over the long term? What makes it possible for Japanese companies and their partners to exploit complementary assets? What allows them to have a convergence of purpose with their suppliers? How do they so successfully manage the interface between themselves and their suppliers? Is this something in the Japanese industry structure? Or something in Japanese society?
While our meeting ended with all of us promising to think about this issue, that evening as I drove back into Calcutta city along the Ganges, I asked myself: are ways of managing businesses different across countries?
Prof Bruce Kogut of Wharton and INSEAD, writing in the journal, “Management Science”, is someone who believes that the institutional environment in which large firms operate differs significantly across countries. Boards of US companies, for example, are much more powerful than boards in France or Japan. Institutional investors have a large say in how large US firms are run whereas in France and Japan it’s not institutional investors but government bureaucrats that wield this kind of power. In Germany, commercial banks and labor unions have strong voices on company boards. Again, in Germany, there are few industrial groups whereas in Japan groups of large companies are tied together in keiretsu with a large firm and a bank as the hub. These differences in the institutional environment play a crucial role in how management plays out.
Maybe management thought, to be powerful, ought be like the Ganges itself- springing from many different sources. The Alaknanda river meets the Dhauliganga, then the Mandakini at Nandprayag, then the Pindar at Karnaprayag, and finally the Bhagirathi at Devaprayag to form the Ganges. Then the Ganges emerges from the Himalayas at Haridwar, and flows for 800 km till the Yamuna joins it at Allahabad. Then it picks up speed as rivers such as the Kosi, Son, Gandak and Ghaghra join it. When it reaches Bengal, the Meghna River joins it before it flows into the Bay of Bengal.
Maybe, what we teach at our IIMs need to be like the Ganges, nourished from many different sources.

READERS WRITE

Ajit,

I read with great interest your article on whether IIM’s are overly US looking. I strongly agree with your thoughts.

The US is head and shoulders above other countries in terms of management research output. Add to it the fact that business schools across the world have come to rely on textbooks written by American professors and you have an American focus on management education.

When I did an executive education program at IIM Ahmedabad in 2000, I remember a marketing professor taking us through an HBS case about the Suzuki Samurai. A group of people who had never been to the US, had little knowledge of the market environment were analyzing why a concept did not work. Obviously, the learning we derived from it was suboptimal. I am sure this situation is changing as the IIMs produce more case studies and research.

The graduates of 2009 should be exposed to the world order they will be function in (BRIC countries contributing disproportionately to world growth, shrinking populations & relative importance of Europe/Japan). In this regard, any steps taken by IIM Calcutta to modify the curriculum would benefit graduates tremendously.

I enjoy reading your notes about taking IIM C forward. Thank you for sharing them.

Krishna
Krishna Hegde krishna.hegde@gmail.com

Ajit:

Big fan of rediff and India Abroad. Congrats on building a great media business.

On your recent article about the philosophy of MBA programs, you had ended the article with a provocative question around whether our MBA programs need to be nourished like the Ganges and essentially saying we need to accommodate philosophies from multiple sources. I tend to cringe whenever I hear folks espousing multiplicity for multiplicity’s sake. We need our MBA’s programs to follow the “right” philosophy and if it does happen so that the “right” philosophy is an amalgam of various things from various cultures than we should do so. The idea of a global buffet based educational philosophy where you pick things just because they are different does not make sense to me.

Most MBA programs adopt an US centric view because the US centric view optimizes around capital and return on capital (not saying that this is a good or bad thing but just stating the fact). Optimizing around capital has many social and labor implications - the Japanese optimize around market share and maximum production even if it undermines return on capital. As a venture capitalist, there is no doubt which philosophy I believe in ;-). If your goal is to maximize wealth creation (again not saying that is a good or bad thing) then the US centric philosophy is the way to go.

Venky
Venky Ganesan vganesan@globespancapital.com
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Dear Ajit,

I read your article in rediff.com with great relish. I admire the way you have steered rediff to become one of the foremost india based internet portals.

Regarding your article, while the argument is not very old that we are following US in terms of evrything we do, we will have to look at it from a different light. I feel that there is nothing wrong in accepting what is good from other cultures and countries. Looking at the specific aspect of curriculum, it is important to note that the number of electives offered by american graduate schools are far more than indian schools. Faculty shortage is one major concern, i agree.

You mentioned three different topics that was discussed, language course, ethics and more mathematical courses. I am especially keen that all bschools start full fledged course modules in ethics and CSR. These courses should be made mandatory and a clear expectation should be set as to what it means and how important these subjects are.

As such these are extremely important for any new bschool graduate, but there are some areas where i feel indian management schools should give more importance. For e.g it would be great if there is a course on new venture planning in indian context. This could include courses, workshops and meeting with people, like you for e.g., who have successfully established brands and companies in india and also india specific venture capitalists. This could also include how to deal with issues related to IP.

Another area is Knowledge Management. This century is touted as the knowledge century and the ability to develop, manage, dissiminate and profit from knowledge is of great importance. Again this is a concept that the japanese have used successfully to build their global dominance.

The internet has changed the world interacts and this has significant impact of business. You being the head of one of the leading global internet portal would vouch for that. The future business models would involve understand the social aspects of internet and how that can inspire and invigorate businesses. So the sociology of the internet and the concept of Web 2.0 should be made part of the tool set for future managers.

Finally i feel that project management should also become part of the new manager. With a lot of developments happening in the infrastructure development in india, it would be important for people to have a good grasp of the project management methodologies.

Knowledge mgmt and project mgmt are offered as part of the PGESM program at IIMB. but it is necessary to offer these courses as part fo the normal MBA as well. I feel that these courses would significantly help the young student become a better manager.

Sathya Pandalai spandalai@yahoo.com
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Dear Ajit

After reading, Are Our IIMs Over US-Centric, I thought our International Conference, ” Expanding Horizons of Indian Business & Indian Management” would interest u. It is being organised by Indian Business Academy in association with WISDOM, Banasthali on Jan 15-16, at IBA Bangalore and Feb 19-20 at IBA Greater Noida. This would be a path breaking conf. like the earlier conferences that we had at IISc and WISDOM. The attached brochure provides the outline of the conference and its themes.

We look forward to your support for the conference and invite u to present ur views. Already leading academicans such as Prof S. K. Chakraborty, Dr M B Athreya, Dr Gustavsson from Swedish Business School, have confirmed their participation as key note speakers

Subhash Sharma
subhash sharma re_see@rediffmail.com
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Hi Ajit,

Here’s what I feel about Ethics being “taught” being a “course” (as in, being part of syllabus).

We are a country of “moral science” classes being part of curriculum in schools. Colleges dont have them, coz.it is felt that the kids have got the foundation right already, based on which the next lessons are taught.

Times when ethics / corporate governance is taught in Company Secretaries / Chartered Accountants course; governed as clause 49 of listing agreement; or regulated, you would always see that the “words” are what is met, “spirit” is what a few follow (largely because of the person’s values in life, upbringing and the eco-system that person is working in). Example, think of corporate governance in Real estate industry…

While the thought of the IIM Prof is laudable, I think his ‘exploration’ might remain a survey / research paper on the subject.

Sharda Balaji
Legal Counsel, corporate advisor, aspiring enterprenuer
sharda balaji <sharda_balaji@rediffmail.com>
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Dear Shri Ajit Balakrishnan,

I am a regular reader of Business Standard and read your
article regularly.
I am eager to know:
“Were you born in a village? or do you have any ancestral village in India?
Have you ever solved one or two problems of the said village or town?
What were those problems?
How did you solve them?
Were the solutions economical?

With regards,
S.C. Aggarwal,
Founder, Poverty Trust,
aggarwal@indiainfo.com

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Dear Mr Balakrishnan,

I enjoyed reading your column today. It is most unusual for the chairman
of a board to make public any item discussed in a board meeting- excuses
for not parting with nformation are more common.

I had occasion to post a comment in my blog. The link is attached.

http://ttrammohan.blogspot.com/

regards,

Dr.T T Ram Mohan
Finance & Accounting Area
Indian Institute of Management
Vastrapur, Ahmedabad-380015

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