Monthly Archives: September 2010

John Gapper

As a journalist, I  appreciate  people who are straight talkers – and agree with Lucy Kellaway’s praise of Steve Jobs’ pithiness – but Carol Bartz at Yahoo has been taking it too far.

Kara Swisher suggests that the Yahoo board has doubts about Ms Bartz, and may be manoevreing to find a successor. Among other things, it is apparently worried about internal instability and Ms Bartz’s well-known bluntness (including a penchant for swearing in public).

She recently talked openly about tensions with Alibaba, Yahoo’s search partner in China, and why she had spurned  its attempts to buy back Yahoo’s 39 per cent stake. That followed her having sworn publicly at Michael Arrington, the founder of TechCrunch (which AOL has just bought).

Meanwhile her recent retort to reports of Yahoo executive leaving sounded graceless:

“I can’t tell you how many times I’ve gone to my assistant and said, ‘Do you know who this person is,’ and they’re about six layers down.”

Of course, if the Yahoo share price was doing well and Ms Bartz’s attempts to redefine Yahoo were being seen to work, such off-the-cuff remarks might not matter. Mr Jobs can say more or less what he likes, after all, but she lacks that luxury.

Bland corporate-speak is very frustrating to listen to, and Ms Bartz is nothing if not entertaining. But her outspokenness is not wise.

Punk. Billionaire. Genius. That is the three-word description of Mark Zuckerberg, the founder of Facebook, in the film account of how he took a social networking site from a Harvard dormitory to a valuation of $30bn in seven years.

John Gapper

The FT has two fascinating stories today about up-and-coming Asian leadership contenders at vast, powerful and impenetrable institutions.

One concerns Kim Jong-eun, third son of Kim Jong-il, the leader of North Korea. The other is about Michael Evans, vice-chairman of Goldman Sachs and head of its Asia operations.

Compare the two behind-the-scenes manoevering. First, North Korea:

The long wait is over; the transition has begun. On Monday North Korean media for the first time uttered the name of Kim Jong-eun, as one of five new generals gazetted on the eve of a very rare meeting of party activists; the last such was 44 years ago.

Now, Goldman Sachs:

Goldman insiders say Mr Evans has become a regular presence in the bank’s New York headquarters, while also maintaining his management responsibilities in Asia. These people say Mr Evans has been seeking a more senior role in New York. Now speculation is building that Mr Evans is heading higher in the Goldman hierarchy, according to current and former bank executives, investors and clients interviewed by the Financial Times.

Of course, neither at Goldman nor in North Korea is it entirely possible to know what is going on. As Lucas Van Praag, Goldman’s PR, says firmly:

“There is absolutely no basis for speculation about any changes to our senior management team.”

Those are probably Kim Jong-il’s sentiments too. In fact, he is said to have told Wen Jiabao that it was “a false rumour from the west”.

However, Aidan Foster-Carter’s analysis of North Korea does identify one sharp distinction between it and Goldman:

And although the Workers’ Party of Korea nominally controls the Korean People’s Army, all those new epaulettes show which power structure really counts. Communism this is not; more a militarised but mendicant monarchy, now on its uppers.

Mendicant? On its uppers? That does not sound like Goldman Sachs.

John Gapper

The Federal Trade Commission complaining about a company allegedly touting false scientific benefits for its health products would not normally be interesting but the case of POM Wonderful, a Californian company that makes pomegranate juice drinks, is an exception.

My interest is due to the fact that I have witnessed Lynda Rae Resnick, one of POM’s owners, giving her full salesperson’s pitch for the wonders of her products in reducing the risks of heart disease and prostate cancer.

I saw her once on stage at the Milken Institute annual conference in Beverly Hills, an event where she is a regular speaker. She is also a trustee of the Milken Family Foundation, set up by Lowell and Michael Milken, the former Drexel Burnham Lambert financier who has had prostate cancer.

Here is what the foundation has to say about her:

Dubbed the “POM Queen,” she is behind the marketing success of POM Wonderful, the wildly popular 100 per cent pomegranate juice that created an entirely new product category. Resnick and her husband, Stewart, also own Teleflora, FIJI Water, Paramount Farms and Paramount Citrus Companies. Resnick continues to create and build successful brands for all their crops and companies, including the ground-breaking and healthy pistachio treat Everybody’s Nuts, Wonderful Pistachios and Cuties brand mandarin oranges.

I can testify that Ms Resnick, who also has a blog, is a persuasive marketer but the FTC is not happy about some of the company’s claims:

“Any consumer who sees POM Wonderful products as a silver bullet against disease has been misled,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection.  “When a company touts scientific research in its advertising, the research must squarely support the claims made.  Contrary to POM Wonderful’s advertising, the available scientific information does not prove that POM Juice or POMx effectively treats or prevents these illnesses.”

This could cramp Ms Resnick’s style a bit at future Milken Institute conferences.

Update: POM Wonderful is not abashed. Accusing the FTC of “persecuting the pomegranate”, it says the commission is “acting beyond its jurisdiction, exceeding its authority, and creating a new regulatory scheme that attempts to treat our juice as a drug, which it is not.”

John Gapper

One way of viewing the explosive argument in the HSBC boardroom that has led to the departure of Michael Geoghegan as chief executive is purely as a personality clash between him and John Thornton, the former Goldman banker who might have been appointed as chairman.

The other is as the latest round in a very long tussle between Hong Kong and London over who should be in charge of HSBC. Confusingly, both sides of the argument are represented by white middle-aged men since Hong Kong and Shanghai Bank was a British colonial institution.

(A further way of looking at this, incidentally, is as the Scots versus the English, given that HSBC was at its heart Scottish Presbyterian).

It dates back to the HSBC acquisition of Midland Bank in 1992, when the Bank of England insisted not only on the combined bank being supervised from London, but on Sir Willie Purves, the entertainingly fierce former head of HSBC splitting the roles of chairman and chief executive.

There are good banks, there are bad banks, and there is Westdeutsche Landesbank.

In a competition for the title of world’s most consistently accident-prone bank – measured by a talent for losing money on exotic activities it has failed to understand, not only once or twice but over decades – it is difficult to think of an institution that rivals WestLB.

“Strong banks want strong regulation.” That fact has been misunderstood in the wake of the financial crisis, according to Bob Diamond, Barclays chief executive.

“No one has suffered more than those strong banks that have been thrown in the same reputational basket as weak banks”, he said at a panel this morning at the Clinton Global Initiative in New York.

John Gapper

Lady Bracknell would have something to say about the current proclivity of the British high street banks for losing chief executives.

First it was John Varley at Barclays, then it was Eric Daniels at Lloyds and next it may be Michael Geoghegan of HSBC, who has threatened to quit if he is not appointed chairman. Are you sitting comfortably, Stephen Hester of Royal Bank of Scotland?

Business blog

Strategy & managing

About this blog Blog guide
This blog is mainly about business and strategy and how and why people who run companies take the decisions that they do.

Most of the time, John Gapper is in New York and Andrew Hill is in London. We occasionally debate business issues between us, but your comments and criticism are welcome.




To comment, please register for free with FT.com and read our policy on submitting comments.

All posts are published in UK time.

Contact andrew.hill@ft.com or john.gapper@ft.com about the Business blog.

See the full list of FT blogs.

About John and Andrew

John Gapper is an associate editor and the chief business commentator of the FT. He has worked for the FT since 1987, covering labour relations, banking and the media. He is co-author, with Nicholas Denton, of All That Glitters, an account of the collapse of Barings in 1995.

Andrew Hill is an associate editor and the management editor of the FT. He is a former City editor, financial editor, comment and analysis editor, New York bureau chief, foreign news editor and correspondent in Brussels and Milan.

Archive

« Aug Oct »September 2010
M T W T F S S
 12345
6789101112
13141516171819
20212223242526
27282930