Baseballs, Batteries and Bad Ads
By JOE NOCERA
Talking Business
The New York Times
July 14, 2007
Is it cheating to write a “grab bag” column in the middle of July, when you’re days away from vacation, and you’re tired, oh-so-tired of waiting for the Bancroft family to make up its mind about Rupert Murdoch’s bid for Dow Jones? You be the judge.
•
By some odd coincidence, just days after I complained in this space about the iPhone’s battery replacement policy — or lack thereof — I had some trouble recharging my Palm Treo battery. So I went to the Palm Web site, and paid $34 for an extended-life battery. When it arrived, I popped it into the back of my Treo. Had my problem been more pressing, I would have gone to the nearest Verizon Wireless store and purchased it. Gosh. How convenient.
And convenience is what most companies strive for in dealing with customers. Except Apple, which clearly has other priorities. Indeed, unbeknownst to me, just as my iPhone column was going to press a few weeks ago, Apple finally released its battery replacement policy. You can find it on the Apple Web site. (Or maybe not. It’s actually buried on the site. http://www.apple.com/support/iphone/service/battery/)
Anyway, here’s the policy: Because the iPhone lacks a replaceable battery, you will have to send your phone to Apple. If your phone is under warranty, the new battery will be free. If it is out of warranty, it will cost a hefty $79, plus $6.95 for shipping. Apple will also lend you an iPhone while your phone is in the shop, which will cost you another $20, warranty or no. In other words, if your iPhone battery runs down, you have to:
1. Put up $20, (or $105.95 if your iPhone is out of warranty);
2. Wait for the loaner to arrive;
3. Put your data on the loaner;
4. Send Apple your iPhone;
5. Wait for it to be returned;
6. Put your data back on your iPhone (it is erased while Apple is replacing the battery);
7. Mail in the loaner.
Whew. Given how awkward this all is, you have to wonder why Apple didn’t just build the iPhone with a replaceable battery. I’m convinced the answer is that the chief executive, Steven P. Jobs, and Apple’s design chief, Jonathan Ive, are design snobs, who care more about form than function. Larry Keeley, the president of the design firm Doblin Inc., wrote me an e-mail message after he’d seen the innards of the iPhone, which several Web sites have now published. The battery, he told me, lacks the normal metal jacket, making it “thinner and lighter, while also making it more difficult for consumers to handle or dispose of.” He added: “This is clear evidence that they are optimizing the INSIDES of the phone to the OUTSIDE form factor that they have designed. It is far more common and much cheaper to design the other way: pile up all the components you have to stuff inside, then figure out the sexiest box that can contain them.”
•
It takes a special chief executive to make Patrick Byrne of Overstock.com look good, but the C.E.O. of Whole Foods, John Mackey, has managed to pull it off. Like Mr. Mackey, Mr. Byrne makes regular appearances on Internet chat boards, and he even uses a pseudonym (“Hannibal” is a favorite) just as Mr. Mackey did. But unlike Mr. Mackey, he’s never hidden the fact that he’s the author of the posts. One of the worst things about the Internet is that it allows people to assume other identities and do and say things they would never do or say in “real life.” For a chief executive to assume a fake name to trash competitors and promote his own company is reprehensible. If he wasn’t the company founder, my guess is that his board would have fired him by now. Meanwhile, I’m no lawyer, but when someone in Mr. Mackey’s position talks down a company that he then tries to take over — doesn’t that come under the heading of “stock manipulation?” Just thought I’d ask.
•
Does anybody actually look at the ads that run alongside Google’s Gmail service? I know I don’t. True, the ads are what make it possible for Google to offer free e-mail, but they quickly become little more than white noise: your eye automatically shuts them out.
And when you do you peek at them, they are often hilariously wrong-headed. The ads are supposed to use algorithms to find things you might be interested in, based on words in your e-mails. This, of course, raised concerns from privacy advocates, who feared that Google was becoming Big Brother. But a few days ago in an e-mail exchange I had with my editor, who wanted to know when I would deliver this column, the four ads on the side were for www.AreYouASlackerMom.com, “worry free watering,” www.Top10homejobsof2007.com, and “Are You a Celebrity?” On the one hand, there is something comforting in this; Big Brother would sure do a better job. On the other hand, weren’t these targeted ads pioneered by Google supposed to be superior to old-fashioned mass market print and TV advertising? The Gmail example isn’t exactly clinching the case.
•
Don’t you think that tattoo removal is going to be one of the big growth industries 20 years from now?
•
This Monday, the magazine industry is going to be hit with a very large postal increase: 11 percent to as much as 20 percent annually, depending on the magazine. Every time there is a big rate increase, it is accompanied by lots of teeth-gnashing, but this time it’s worse than usual. Small magazines are up in arms, contending that they are being hit, quite unfairly, with much higher increases than big magazine companies like Condé Nast and my former employer Time Inc. The Nation went so far as to build a fund-raising campaign around the rate increase, which in its case is 18 percent and will amount to an extra $500,000 in postage a year.
David Corn, The Nation’s Washington correspondent, wrote a letter to the magazine’s subscribers asserting darkly that the increase was brought on by “the sort of institutional Washington corruption I often cover.” He continued, “Postal regulators have accepted a scheme designed in part by lobbyists for the Time Warner media conglomerate.” Sounds pretty nefarious, doesn’t it?
But as with most good conspiracy theorists — or political fund-raisers, for that matter — Mr. Corn hasn’t let the facts get in the way of his alarmist prose. What is really happening is that the Postal Regulatory Commission has decided to radically change its approach to periodical mailings. Under a 1970 law, every class of mail, including periodicals, has to not only break even but help cover the overhead for the Postal Service. “Magazine are facing declining circulation, but the costs of mailing magazines keep going up,” said Dan G. Blair, the chairman of the Postal Regulatory Commission.
So Mr. Blair — with, yes, the strong backing of Time Inc. and the other big companies — decided to reward efficiencies. Magazines that were bundled in ways that reduced work for the post office got a price break; magazines that didn’t had to pay a higher percentage. Clearly, the new rates are intended to force all magazines to become more efficient mailers — even little ones like The Nation.
Is there really something wrong with that? When I spoke to Mr. Corn he said that ensuring a diversity of voices and opinions, critically important in a democracy, should never depend on mailing efficiencies, which are always going to favor the big boys. And he’s right. But the real problem here is not the supposed perfidy of Time Inc.; it is the fact that the Postal Service has to break even.
But why? Aside from defense, it is hard to imagine a service that more appropriately belongs to government; the Constitution itself gives Congress the power to “establish Post Offices and Post Roads.” If The Nation should be complaining about anything, it is Congress’s unfortunate requirement that the Postal Service has to have a break-even “business model.” Still, I can understand why it would prefer to blast Time Warner. It’s so much easier to raise money when you can point the finger at a good corporate villain.
•
On Thursday, we’re going to get our first real indication of whether the options backdating scandal is a mountain or a molehill. That’s when Judge Charles Breyer of Federal District Court, who is presiding over the criminal trial of Gregory Reyes, the former chief executive of Brocade Communications, has said he will rule on whether to throw out the case. He may well.
Mr. Reyes has long argued that he is innocent because he didn’t profit from any of the backdating; he was doing it to help lure and retain employees during the bubble years. But that’s not likely to be the judge’s rationale. During a hearing on Monday, the judge implied that the prosecution hadn’t proved that Mr. Reyes knew he was committing a crime when he backdated options.
If Judge Breyer does dismiss the case, there will be a giant chorus in Silicon Valley singing, “We told you so.” Ever since the options scandal broke, the techie community has claimed that it was much ado about nothing — a trumped-up, post-Enron scandal given life by corporate goo-goos like, well, me. A venture capitalist once told me that during the bubble years, lawyers and accountants routinely advised boards that backdating was no big deal. More than one technology executive told me that options backdating was nothing more than a product of sloppy bookkeeping. I’ve always thought it was more than that; at a minimum, it was an example of the way many Silicon Valley companies felt that the rules didn’t apply to them. Of course, if the Reyes case gets tossed, maybe they don’t.
•
Do Major League ballplayers really have to throw every single baseball into the stands the minute it so much as touches dirt or ash? Twenty years ago, that’s wasn’t common practice — at least not in my memory — but now all you see is ballplayers tossing balls to little kids in the stands whenever they catch one. (Not that there’s anything wrong with that!) I wonder how much more it costs, per major league game, just to cover the cost of the baseballs. I’ll have an answer the next time I write one of these grab bag columns.
Talking Business
The New York Times
July 14, 2007
Is it cheating to write a “grab bag” column in the middle of July, when you’re days away from vacation, and you’re tired, oh-so-tired of waiting for the Bancroft family to make up its mind about Rupert Murdoch’s bid for Dow Jones? You be the judge.
•
By some odd coincidence, just days after I complained in this space about the iPhone’s battery replacement policy — or lack thereof — I had some trouble recharging my Palm Treo battery. So I went to the Palm Web site, and paid $34 for an extended-life battery. When it arrived, I popped it into the back of my Treo. Had my problem been more pressing, I would have gone to the nearest Verizon Wireless store and purchased it. Gosh. How convenient.
And convenience is what most companies strive for in dealing with customers. Except Apple, which clearly has other priorities. Indeed, unbeknownst to me, just as my iPhone column was going to press a few weeks ago, Apple finally released its battery replacement policy. You can find it on the Apple Web site. (Or maybe not. It’s actually buried on the site. http://www.apple.com/support/iphone/service/battery/)
Anyway, here’s the policy: Because the iPhone lacks a replaceable battery, you will have to send your phone to Apple. If your phone is under warranty, the new battery will be free. If it is out of warranty, it will cost a hefty $79, plus $6.95 for shipping. Apple will also lend you an iPhone while your phone is in the shop, which will cost you another $20, warranty or no. In other words, if your iPhone battery runs down, you have to:
1. Put up $20, (or $105.95 if your iPhone is out of warranty);
2. Wait for the loaner to arrive;
3. Put your data on the loaner;
4. Send Apple your iPhone;
5. Wait for it to be returned;
6. Put your data back on your iPhone (it is erased while Apple is replacing the battery);
7. Mail in the loaner.
Whew. Given how awkward this all is, you have to wonder why Apple didn’t just build the iPhone with a replaceable battery. I’m convinced the answer is that the chief executive, Steven P. Jobs, and Apple’s design chief, Jonathan Ive, are design snobs, who care more about form than function. Larry Keeley, the president of the design firm Doblin Inc., wrote me an e-mail message after he’d seen the innards of the iPhone, which several Web sites have now published. The battery, he told me, lacks the normal metal jacket, making it “thinner and lighter, while also making it more difficult for consumers to handle or dispose of.” He added: “This is clear evidence that they are optimizing the INSIDES of the phone to the OUTSIDE form factor that they have designed. It is far more common and much cheaper to design the other way: pile up all the components you have to stuff inside, then figure out the sexiest box that can contain them.”
•
It takes a special chief executive to make Patrick Byrne of Overstock.com look good, but the C.E.O. of Whole Foods, John Mackey, has managed to pull it off. Like Mr. Mackey, Mr. Byrne makes regular appearances on Internet chat boards, and he even uses a pseudonym (“Hannibal” is a favorite) just as Mr. Mackey did. But unlike Mr. Mackey, he’s never hidden the fact that he’s the author of the posts. One of the worst things about the Internet is that it allows people to assume other identities and do and say things they would never do or say in “real life.” For a chief executive to assume a fake name to trash competitors and promote his own company is reprehensible. If he wasn’t the company founder, my guess is that his board would have fired him by now. Meanwhile, I’m no lawyer, but when someone in Mr. Mackey’s position talks down a company that he then tries to take over — doesn’t that come under the heading of “stock manipulation?” Just thought I’d ask.
•
Does anybody actually look at the ads that run alongside Google’s Gmail service? I know I don’t. True, the ads are what make it possible for Google to offer free e-mail, but they quickly become little more than white noise: your eye automatically shuts them out.
And when you do you peek at them, they are often hilariously wrong-headed. The ads are supposed to use algorithms to find things you might be interested in, based on words in your e-mails. This, of course, raised concerns from privacy advocates, who feared that Google was becoming Big Brother. But a few days ago in an e-mail exchange I had with my editor, who wanted to know when I would deliver this column, the four ads on the side were for www.AreYouASlackerMom.com, “worry free watering,” www.Top10homejobsof2007.com, and “Are You a Celebrity?” On the one hand, there is something comforting in this; Big Brother would sure do a better job. On the other hand, weren’t these targeted ads pioneered by Google supposed to be superior to old-fashioned mass market print and TV advertising? The Gmail example isn’t exactly clinching the case.
•
Don’t you think that tattoo removal is going to be one of the big growth industries 20 years from now?
•
This Monday, the magazine industry is going to be hit with a very large postal increase: 11 percent to as much as 20 percent annually, depending on the magazine. Every time there is a big rate increase, it is accompanied by lots of teeth-gnashing, but this time it’s worse than usual. Small magazines are up in arms, contending that they are being hit, quite unfairly, with much higher increases than big magazine companies like Condé Nast and my former employer Time Inc. The Nation went so far as to build a fund-raising campaign around the rate increase, which in its case is 18 percent and will amount to an extra $500,000 in postage a year.
David Corn, The Nation’s Washington correspondent, wrote a letter to the magazine’s subscribers asserting darkly that the increase was brought on by “the sort of institutional Washington corruption I often cover.” He continued, “Postal regulators have accepted a scheme designed in part by lobbyists for the Time Warner media conglomerate.” Sounds pretty nefarious, doesn’t it?
But as with most good conspiracy theorists — or political fund-raisers, for that matter — Mr. Corn hasn’t let the facts get in the way of his alarmist prose. What is really happening is that the Postal Regulatory Commission has decided to radically change its approach to periodical mailings. Under a 1970 law, every class of mail, including periodicals, has to not only break even but help cover the overhead for the Postal Service. “Magazine are facing declining circulation, but the costs of mailing magazines keep going up,” said Dan G. Blair, the chairman of the Postal Regulatory Commission.
So Mr. Blair — with, yes, the strong backing of Time Inc. and the other big companies — decided to reward efficiencies. Magazines that were bundled in ways that reduced work for the post office got a price break; magazines that didn’t had to pay a higher percentage. Clearly, the new rates are intended to force all magazines to become more efficient mailers — even little ones like The Nation.
Is there really something wrong with that? When I spoke to Mr. Corn he said that ensuring a diversity of voices and opinions, critically important in a democracy, should never depend on mailing efficiencies, which are always going to favor the big boys. And he’s right. But the real problem here is not the supposed perfidy of Time Inc.; it is the fact that the Postal Service has to break even.
But why? Aside from defense, it is hard to imagine a service that more appropriately belongs to government; the Constitution itself gives Congress the power to “establish Post Offices and Post Roads.” If The Nation should be complaining about anything, it is Congress’s unfortunate requirement that the Postal Service has to have a break-even “business model.” Still, I can understand why it would prefer to blast Time Warner. It’s so much easier to raise money when you can point the finger at a good corporate villain.
•
On Thursday, we’re going to get our first real indication of whether the options backdating scandal is a mountain or a molehill. That’s when Judge Charles Breyer of Federal District Court, who is presiding over the criminal trial of Gregory Reyes, the former chief executive of Brocade Communications, has said he will rule on whether to throw out the case. He may well.
Mr. Reyes has long argued that he is innocent because he didn’t profit from any of the backdating; he was doing it to help lure and retain employees during the bubble years. But that’s not likely to be the judge’s rationale. During a hearing on Monday, the judge implied that the prosecution hadn’t proved that Mr. Reyes knew he was committing a crime when he backdated options.
If Judge Breyer does dismiss the case, there will be a giant chorus in Silicon Valley singing, “We told you so.” Ever since the options scandal broke, the techie community has claimed that it was much ado about nothing — a trumped-up, post-Enron scandal given life by corporate goo-goos like, well, me. A venture capitalist once told me that during the bubble years, lawyers and accountants routinely advised boards that backdating was no big deal. More than one technology executive told me that options backdating was nothing more than a product of sloppy bookkeeping. I’ve always thought it was more than that; at a minimum, it was an example of the way many Silicon Valley companies felt that the rules didn’t apply to them. Of course, if the Reyes case gets tossed, maybe they don’t.
•
Do Major League ballplayers really have to throw every single baseball into the stands the minute it so much as touches dirt or ash? Twenty years ago, that’s wasn’t common practice — at least not in my memory — but now all you see is ballplayers tossing balls to little kids in the stands whenever they catch one. (Not that there’s anything wrong with that!) I wonder how much more it costs, per major league game, just to cover the cost of the baseballs. I’ll have an answer the next time I write one of these grab bag columns.
posted by greenpagan at 6:21 AM
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