Last week, two of the senior ArnoldIT professionals delivered a one hour lecture to a select group of executives. The topic was related to our work in locating high-value information using open source content sources.
Shortly after our presentation I read “Google Was Willing to Beat Facebook’s $19B Offer for WhatsApp.” Quite a windfall for WhatsApp.
The thought that struck me was the way the deal illuminated a comment made by an investment banker attending out lecture last week. The former consultant told me:
We focus on innovation. We are looking in high tech sectors.
The statement is a bit of misdirection. The investment firm wants to find companies, inject cash, and then do a deal like the WhatsApp anomaly. The user of the word “innovation” is an audible pause. Like the person who uses “so” or “um” in conversation, the individual talking about innovation is not interested in innovation.
From my perspective, brokering a big deal is not innovation. The company WhatsApp may be described as an innovator. The question is, “Did Facebook buy innovation?”
If WhatsApp was an innovation, why did Google step away from the deal?
The current economic environment is looking for blockbusters, home runs, and slam dunk content winners.
Innovation is related to cash. Without funding, most start ups struggle. Without cash, start ups are the raw material for the near-monopolies that the US tech landscape is husbanding.
In my series of search vendor profiles, a surprising trend is evident. In the search and content processing sector, innovation has stalled. Instead of breakthroughs, there are optimizing and bundling plays. Instead of light bulbs, I see recycled plastic.
Paying $19 billion is an indication that a blend of desperation and arrogance is filling the coffee shops in some locales.
Stephen E Arnold, February 21, 2014
Phi Beta Iota: One can only speculate as to how much “plumbing” or broad innovation $19 billion, properly invested across universities, Maker Labs, and so on, might have brought. Brother Arnold is right — Facebook is arrogant, lazy, and stupid.