Monday, June 10, 2002

The second shoe in the auditing scandal is going to be stock options.  Stock options represent a wage expense and should be charged against earnings.  When that happens, Microsoft's earnings history will be restated to look like this (this was done by Bill Parish, who did some good work, but is a little over the top on other issues concerning Microsoft).  He estimates that a stunning 65 percent of Microsoft's cash did not originate from product sales but rather from tax benefits associated with the exercise of stock options, employees prepaying their own wages, and the sale of put contracts on its own stock.  Yikes!! [John Robb's Radio Weblog] 8:22:45 PM

Washington Post: Burden of the Board. This article describes how many venture investors are re-thinking their involvement as board members in this post-Enron world. Lew thinks the concern over board seats will push venture capital firms to appoint more "designated hitters" to boards -- that is, people who are affiliated with the firms and act on their behalf, but who aren't full-time venture capitalists. General Atlantic of Stamford, Conn., for example, has asked philanthropist Mario Morino to represent GA on the board of Ai Metrix in Herndon, and Proxicom founder Raul Fernandez to do the same for Critical Path. Fernandez, who recently gave up his day-to-day responsibilities at the Reston office of Dimension Data, the company that bought Proxicom, said he's expecting compensation for outside board members, including venture capitalists, will go up. "You've got to be active in every board because of the increased liability," Fernandez says. "The number of people willing to do it is dropping and the time commitment is increasing." Part of the concern, of course, is with litigation, from shareholders and employees alike. "If you have a distressed company, and the founder is threatening a lawsuit, the shareholders are not feeling the love," says Lew. There will be greater accountability, Lew predicts, whether VCs like it or not. "The era of private clubbiness has moved on to an era of greater transparency," she says. "It's almost like you have a target painted on your back." [Scott Loftesness] 8:21:59 PM

IM: Five Corporate trends on ZDNet [Jeroen Bekkers' Groove Weblog] [rebelutionary] Not very insightful, still interesting to see it get attention.  8:20:47 PM

I should end with this again tonight. How To Manage Companies in the New Economy [John Robb's Radio Weblog] The idea that a company answers not just to shareholders, but to customers, employees, government etc. is right on.  And I agree that, to some extent, the balance of forces has shifted.   We'll see how far it's shifted.  Better information or no, people are not perfectly rational in the products/services they choose or in the jobs they pick, etc.   There is a limit to how much effort they'll spend to perfect their decisions.    The Internet makes it easier to collect information for decision making, but the signal to noise ratio could still use some improvement. 8:00:17 PM

US 'foils terror attack'. US Attorney-General John Ashcroft says a plot to attack the country using a radioactive "dirty bomb" has been prevented. [BBC World] yipes! this seems more like a PR opportunity than an imminent threat. 2:19:29 PM

backpacking in yosemite.. Went backpacking in Yosemite last weekend - McGurk Meadow out to just past Taft Point.   Amazing views of the valley from Taft Point.    The drive up to the trailhead wasn't bad either. 8:15:49 AM

2 Tinkerers Say They've Found a Cheap Way to Broadband. Etherlinx uses an inexpensive wireless standard to transmit Internet data. Their ambitious plan threatens to shake the near-monopoly that the cable and phone companies hold on high-speed access. [New York Times: Technology] 7:46:09 AM

80211b News writes: John Markoff describes a quiet, inexpensive startup, Etherlinx, that plans to change the face of the final mile. Markoff details how two innovators a few doors down from Apple's historic garage are taking off-the-shelf Wi-Fi cards, installing their own firmware, and producing CPE (customer premises equipment) devices for less than $100. The dual-radio design allows them to run a long-distance high-bandwidth connection relayed to a local Wi-Fi network. What's unique about this product is that it's a single device and it's cheap.  [80211b News] [Mac Net Journal] [rebelutionary] 7:42:34 AM

Java Powers of Ten [Slashdot: News for nerds, stuff that matters] 7:41:01 AM

"BlogComp: Blog Tool Feature Comparison Table " [Daypop Top 40] 7:35:06 AM

First people injected with ID chips, sales drive kicks off. Round up the couch potatoes... [The Register] 7:31:16 AM

Novell to buy Web services company. The business software maker says it will acquire Silverstream, whose applications help companies build Web services, in a deal worth $212 million. [CNET News.com] 7:11:57 AM

Microsoft builds TrustBridge. Microsoft details Web services security, identity model with VeriSign, IBM [InfoWorld: Top News] IBM and Verisign, back in the boat. 7:05:57 AM