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July 31, 2008, 2:32 pm · By Adam Lashinsky

Google’s latest risky bet: Venture capital

Who is William Maris? According to the Wall Street Journal Thursday, he’s the 33-year-old entrepreneur that Google (GOOG) just hired to help establish a new venture capital arm under the direction of longtime senior executive David Drummond. The article is skimpy on details, and Google isn’t talking. But the story actually reads like a Washington, D.C., leak where White House or congressional leaders float trial balloons to see what the reaction will be to policy ideas. It’s a form of cheap market research.

The reaction to Google’s VC idea is likely to be muted. Corporate venture arms sound like a good idea, but they typically don’t work. Because the in-house venture capitalists are employees of a big, mushy corporation, it’s tough to give them the same greed-induced compensation packages that partners in a traditional venture firm get. A corporate VC shop also has more conflicts: A startup that takes money from Google runs the risk of alienating Microsoft (MSFT), Yahoo (YHOO) and any number of lesser-known software companies and ad networks that otherwise would be potential investors or, even more important, customers.

Conflicts aside (because, after all, who really cares about conflicts?), the real problem is mission drift. People like to reference the might and influence of Intel (INTC) Capital, the chip giant’s venture wing. They forget that in the late 1990s Intel Capital, whose laudable goal was simply to promote startups that would increase the usage of microprocessors, was a laughingstock that poured millions upon millions of dollars down the drain on dot-bombs. As Stacey Higginbotham of Giganotes points out Thursday, Dell (DELL) and Disney (DIS) had such a devil of time winding down their venture investments that they just shut the units altogether.

So who is William Maris? Here’s TechCrunch’s brief. Ultimately, understanding Maris is far less important than hearing from Google what its venture intentions are.

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July 31, 2008, 7:38 am · By Adam Lashinsky

At least one huge tech deal WILL happen this week

What with all of the hullabaloo about Friday’s meeting of Yahoo (YHOO) shareholders, it’s kind of amusing to note that a $14-billion tech-industry buyout will get approved by shareholders Thursday. That deal is getting far less ink than the deal that wasn’t, namely Microsoft’s (MSFT) purchase of Yahoo. No, the deal in question is Hewlett-Packard’s (HPQ) buyout of EDS (EDS). The target company holds its shareholder meeting Thursday in Plano, Texas, and the vote to approve HP’s takeover will be a formality.

HP and EDS have been quiet about their merger of less-than-equals since an initial spate of publicity when the deal was announced in May. The scuttlebutt is that EDS is an undermanaged mess and that HP CEO Mark Hurd can’t wait to get his hands under the hood.

It’ll be a good time for Hurd to get busy. He has enjoyed an extended run of clobbering HP archrival Dell (DELL), located elsewhere in EDS’s home state. However, if for no other reason than it’s been down so long, Dell recently has been closing the gap, at least in one measure I’m certain Hurd and his board follow closely: stock-market performance.  Over the last year, as this chart shows, laggard Dell has proved to be only a slightly-worse investment than HP, with the spread narrowing over time.

HP isn’t saying when the EDS deal will close, but it won’t be this week. In an announcement last Friday, HP said its purchase will not close before Aug. 18. The reason? EDS shareholders sued to be sure the company paid out its last dividend before HP gobbles it up and the dividend goes away. That’s kind of wonky stuff — until you consider that EDS’s 5-cent-per-share quarterly dividend costs $25 million. That’s a fraction of the transaction value, of course, but still not chump change considering that HP’s first task will be taking an ax to EDS’s expenses.

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July 30, 2008, 9:39 am · By Nadira

Comic-Con: Quirky, fun, and very Gen Y

Ask any of my friends and they’ll tell you, I’ve always been a nerd. As a child, I read classical myths before bedtime, played viola in the orchestra, and watched more G.I. Joe than could rightly be considered healthy. (Well, that last bit might have been more abnormal than nerdy, but you get the idea.)

And yet–contrary to the tales of social maladjustment and woe that those parents of nigh-seven-year-old kindergartners in our last post might fear–I never once felt bad about it. In fact, it never really entered into my thinking at all. Every one of my friends had a quirk or two, and not because we were some kind of B-movie-esque nerd herd, ostracized from the rest of acceptable classroom society. From the jocks, to the brains, to–yes–the “musicians,” we were for the most part nerdy and cool. And in some cases, even cool because we were nerdy.

Walking to the San Diego Convention Center for Comic-Con 2008 this past weekend, I was reminded of this educational idyll as a departing teenage Con patron explained just that to his apparently confused mom over the phone: “It’s nerdy and cool, you know?” Which was about when the first Batman strolled past me in the crowd, recalling another mob scene of recent memory: The mile-long line I waited in to see a 12:01 a.m. opening night show of Dark Knight a few weeks ago. That, too might have been considered Loserville not long ago, but judging from the box office results for those midnight showings alone (never mind all the pretty girls in line…), the times they are a-changing.

And there’s evidence of it everywhere. Dark Knight’s record-annihilating popularity, clearly. The 150,000 capacity crowd at this year’s Con, which flooded the floor from the usually chill preview night on Wednesday straight through the convention’s close on Sunday. And among the horde, not just obsessed fans, respectable-looking families and giddy comics professionals, but the likes of–no, really–Sam Jackson, Ludacris and Eva Mendes, eager to score a Con boost for upcoming projects.

Then there’s the current Entertainment Weekly cover on Comic-Con and 2009’s Watchmen, based on the celebrated Alan Moore graphic novel of the same name. Fans were treated to special teaser footage at the convention, which EW last year called “one of the most critical industry events on the calendar, as important to Hollywood as any festival in France or Utah.”

Is this mainstreaming of costumed culture a little strange? No doubt. But it’s a better, smarter and all around more exciting world when that’s not only allowed, but appreciated, in all its nerdy and cool glory. And while comics are hardly new, and their entertainment industry ascendancy dates back decades, I especially love the way that they’ve again become true cultural capital for us Yers, minus many of the labels that often came with even casual fandom in the past. We’ve grown up in–and helped grow–what was in recent years a quirky subculture into something we can all support, share, and enjoy without judgment or separation, whether we’re into the whole skin-tight-superhero-outfit-and-plastic-weapon thing or not. (A tad “Kumbaya”? Totally. But I’m feeling warm and fuzzy and drunk with jet lag, and I’m not sorry.)

It’s a cultural shift that a friend first articulated to me after reading David Brooks’ New York Times column, “The Alpha Geeks,” earlier this year. (Thank you, Paul!) Brooks makes a distinction between nerds and “geeks” that I may or may not agree with, but his basic premise–of geek primacy, with the likes of Bill Gates, Tina Fey and even Barack Obama as examples–is hardly debatable.

The challenge, of course, is how to keep all this authentic–something that’s even more important to many Yers than action movies or acceptance. Because there’s a point at which, with more studio executives than comic-book publishers in attendance, events like Comic-Con start to feel like still more icky, obvious marketing. And it’s only a hop, skip and a jump from there to an industry that’s (once again) boring and broke. But it’s a while yet to that. And I for one have the utmost faith in Hollywood.

Right!

But while it’s still charming–and believe me, there’s something about standing in that press of people, surrounded by art and artists and every creature in between, that just makes you giggle–thought you might like a taste…

Icons of my youth. If you don't know, find out.

Icons of my youth. If you don't know, find out.

A Planet of the Apes salute, at the request of Little Spidey and dad.

A Planet of the Apes salute, at the request of Little Spidey and dad.

A very coordinated Plastic Man.

A very tall, very coordinated (and kind of trippy) Plastic Man.

A perfectly nice normal person, a perfectly nice not-so-normal person, a perfectly *awesome* Lego "person," and the happiest costumed kids ever.

O brave new world: A perfectly nice normal person, a perfectly nice not-so-normal person, a perfectly *awesome* Lego "person," and the happiest costumed kids ever.

My kind of crowd--Hellboy, Greedy Smurf, Little Bo Peep (we think), and a whole lot of fans. Only in America.

My kind of crowd: Hellboy, Greedy Smurf, Little Bo Peep (we think), and a ton of fans. Best ever.

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July 30, 2008, 9:39 am · By Nadira

Comic-Con: Quirky, fun, and very Gen Y

Ask any of my friends and they’ll tell you, I’ve always been a nerd. As a child, I read classical myths before bedtime, played viola in the orchestra, and watched more G.I. Joe than could rightly be considered healthy. (Well, that last bit might have been more abnormal than nerdy, but you get the idea.)

And yet–contrary to the tales of social maladjustment and woe that those parents of nigh-seven-year-old kindergartners in our last post might fear–I never once felt bad about it. In fact, it never really entered into my thinking at all. Every one of my friends had a quirk or two, and not because we were some kind of B-movie-esque nerd herd, ostracized from the rest of acceptable classroom society. From the jocks, to the brains, to–yes–the “musicians,” we were for the most part nerdy and cool. And in some cases, even cool because we were nerdy.

Walking to the San Diego Convention Center for Comic-Con 2008 this past weekend, I was reminded of this educational idyll as a departing teenage Con patron explained just that to his apparently confused mom over the phone: “It’s nerdy and cool, you know?” Which was about when the first Batman strolled past me in the crowd, recalling another mob scene of recent memory: The mile-long line I waited in to see a 12:01 a.m. opening night show of Dark Knight a few weeks ago. That, too might have been considered Loserville not long ago, but judging from the box office results for those midnight showings alone (never mind all the pretty girls in line…), the times they are a-changing.

And there’s evidence of it everywhere. Dark Knight’s record-annihilating popularity, clearly. The 150,000 capacity crowd at this year’s Con, which flooded the floor from the usually chill preview night on Wednesday straight through the convention’s close on Sunday. And among the horde, not just obsessed fans, respectable-looking families and giddy comics professionals, but the likes of–no, really–Sam Jackson, Ludacris and Eva Mendes, eager to score a Con boost for upcoming projects.

Then there’s the current Entertainment Weekly cover on Comic-Con and 2009’s Watchmen, based on the celebrated Alan Moore graphic novel of the same name. Fans were treated to special teaser footage at the convention, which EW last year called “one of the most critical industry events on the calendar, as important to Hollywood as any festival in France or Utah.”

Is this mainstreaming of costumed culture a little strange? No doubt. But it’s a better, smarter and all around more exciting world when that’s not only allowed, but appreciated, in all its nerdy and cool glory. And while comics are hardly new, and their entertainment industry ascendancy dates back decades, I especially love the way that they’ve again become true cultural capital for us Yers, minus many of the labels that often came with even casual fandom in the past. We’ve grown up in–and helped grow–what was in recent years a quirky subculture into something we can all support, share, and enjoy without judgment or separation, whether we’re into the whole skin-tight-superhero-outfit-and-plastic-weapon thing or not. (A tad “Kumbaya”? Totally. But I’m feeling warm and fuzzy and drunk with jet lag, and I’m not sorry.)

It’s a cultural shift that a friend first articulated to me after reading David Brooks’ New York Times column, “The Alpha Geeks,” earlier this year. (Thank you, Paul!) Brooks makes a distinction between nerds and “geeks” that I may or may not agree with, but his basic premise–of geek primacy, with the likes of Bill Gates, Tina Fey and even Barack Obama as examples–is hardly debatable.

The challenge, of course, is how to keep all this authentic–something that’s even more important to many Yers than action movies or acceptance. Because there’s a point at which, with more studio executives than comic-book publishers in attendance, events like Comic-Con start to feel like still more icky, obvious marketing. And it’s only a hop, skip and a jump from there to an industry that’s (once again) boring and broke. But it’s a while yet to that. And I for one have the utmost faith in Hollywood.

Right!

But while it’s still charming–and believe me, there’s something about standing in that press of people, surrounded by art and artists and every creature in between, that just makes you giggle–thought you might like a taste…

Icons of my youth. If you don't know, find out.

Icons of my youth. If you don't know, find out.

A Planet of the Apes salute, at the request of Little Spidey and dad.

A Planet of the Apes salute, at the request of Little Spidey and dad.

A very coordinated Plastic Man.

A very tall, very coordinated (and kind of trippy) Plastic Man.

A perfectly nice normal person, a perfectly nice not-so-normal person, a perfectly *awesome* Lego "person," and the happiest costumed kids ever.

O brave new world: A perfectly nice normal person, a perfectly nice not-so-normal person, a perfectly *awesome* Lego "person," and the happiest costumed kids ever.

My kind of crowd--Hellboy, Greedy Smurf, Little Bo Peep (we think), and a whole lot of fans. Only in America.

My kind of crowd: Hellboy, Greedy Smurf, Little Bo Peep (we think), and a ton of fans. Best ever.

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July 25, 2008, 9:50 am · By Adam Lashinsky

Okay, Kleiner is a Web 2.0 investor after all

I’d be remiss, after all I’ve written, if I didn’t note that Kleiner Perkins Caufield & Byers  announced, on the front page of the Wall Street Journal Wednesday, its investment in the Facebook application maker Zynga. Whether or not Kleiner has missed Web 2.0 has become a heavily blogged topic since my article on the firm started circulating, and I know the partners at Kleiner strongly disagree with the characterization that they’ve abdicated their Internet birthright.

While I was reporting, Kleiner shared two things with me that weren’t in my article. One was that they had invested in a Facebook app company they weren’t prepared to announce. I now assume this was Zynga. Second, Kleiner emphasized that it has invested in 25 consumer Internet companies to date, though many remain in “stealth” mode. Not having the list, I can’t evaluate the quality of or prospects for their portfolio. Another announcement that followed my story was Kleiner’s investment in Vivaty, a “virtual community” like Second Life.

The point in my article, however, wasn’t whether Kleiner cares about Web 2.0. It’s how much it cares, especially compared to its new love, alternative energy. As important as the Web 2.0 investments Kleiner will make have been the ones that it missed. Facebook, after all, looks like a bigger win than Zynga.

The admirably tight-lipped CEO of Zynga, Mark Pincus (who never breathed a word to me about Kleiner’s involvement), is a friend, and I certainly hope this investment does well. But let’s be clear. One B-round investment (that means Kleiner was not the first VC into Zynga) at a high valuation (if Zynga raised $29 million the pre-money value likely is in the $100-million range) in a Facebook application company in mid-2008 (three years after Facebook itself was funded) does not a Web 2.0 strategy make.

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July 25, 2008, 8:39 am · By Nadira

Helicopter parenting goes to grade school

When I saw a headline about this study, “The Lengthening of Childhood,” on the front page of the New York Suna few days ago, my Gen Y antennae immediately went up. As we’ve discussed here before, some researchers argue that one of the main reasons we Yers are who we are is our own (Boomer parent-enabled) elongated adolescence. But instead of the more general argument about young people’s dependence on their parents, this National Bureau of Economic Research working paper focused specifically on kindergartners and the potentially negative effects of “red-shirting” — essentially, the increasingly popular practice of starting those with fall and winter birthdays a year later so that they’ll be at the older end of their class, instead of among the youngest. And since some of us are young enough to have been affected by this trend, and others may soon have children of their own and be facing this decision themselves, it seemed worth discussing — especially because of the interesting role our parents play.

Red-shirting isn’t new, and it’s been on the rise. Supported by past research as a means to better-performing and more well-adjusted students, the strategy started to catch on with parents, and many school districts began to move their kindergarten eligibility cutoff dates up as well, so that those kids with birthdays later in the year would become the elder statesmen of their primary schools, instead of the runts, for lack of a better word.

But according to the paper (written by Harvard researchers): “There is little evidence that being older than your classmates has any long-term, positive effect on adult outcomes such as IQ, earnings, or educational attainment. By contrast, there is substantial evidence that entering school later reduces educational attainment (by increasing high-school dropout rates) and depresses lifetime earnings (by delaying entry into the labor market).”

Of course, there are all sorts of circumstances here, and some children may very well need the extra time, but the most striking part of all this to me wasn’t whether or not red-shirting ought to be standard operating procedure, but the apparently significant influence of, as the Sun politely calls them, “ambitious parents.”

“Upper-income, white, highly-educated parents red-shirt their children at the highest rate,” the paper says. And later: “Parents believe that older children out-compete their younger peers in the classroom, on the athletic field, and in college admissions. Thus, eager to give their children an edge, parents are willing to hold back their child one year in order to shift them up the pecking order.”

Hello, helicopter parenting! While the researchers are careful not to blame parents, it’s clear that in some cases, these admittedly well-intentioned moms and dads end up serving their egos far more than their children’s actual interests. And while in the short term, they’re doing it to have a happy child and be happy themselves — as George Davison, headmaster of Grace Church School in Manhattan’s Greenwich Village, puts it in the Sun, “People in the world who feel good about themselves are more effective adults, and more effective adults have higher income.” — even all those good feelings could be to their detriment. Because while experts agree that kindergarten’s harder than it’s traditionally been, and more is expected of the kids than ever, that isn’t an excuse to gloss over the other crucial lessons that childhood is supposed to teach.

Learning, earning, growth, development — those are better rewards than empty praise. A child who’s always protected from making mistakes and experiencing failure is going to be at a major disadvantage in the “real” world. Because let’s be honest, that’s what build character and keeps us from being the coddled adults everyone says we are. And without it, you have the kind of young person who’s just sure he’s the answer to whatever the question is — you know, the one all those managers and older people are always complaining about in our comments? It’s an attitude that, frankly, often also leads to less true achievement, not more; it’s hard to strive when you haven’t ever really had to, or to fight to earn something that you believe you already deserve.

Please don’t mistake this for some kind of anti-Gen Y rant. If anything, it’s in defense of Yers: It frustrates me when we take the rap for the consequences of decisions out of our control — i.e. when we’re vilified for simply being the people our parents raised us to be. (Which isn’t to excuse bad behavior, but rather to recognize what one might call “shared culpability.”)

And I am definitely not saying that there aren’t many situations where red-shirting is right and appropriate, depending on the individual child. But it seems to me there are also many situations where our moms and dads just need to suck it up and send us off into the big, bad world. If the six-year-olds I know are any indication, it’s the parents who are afraid, not the kids. (Seriously. Have you listened to a nursery rhyme lately? Anyone who can listen to “Rock-a-bye Baby” and still go to sleep has got to be pretty brave.) So the sooner Mom and Dad face those fears, I think, the better off they’ll be.

Now, what do you think? I’m out on a bit of a limb here, I know, but are you out here with me? Or are you all for starting school when the spirit moves you? Anyone have personal experience in this area? (For the record, only one of my sibs has an early birthday, putting him on the older end of his class. He was also by far the coolest of all of us at school. But I think that had more to do with his love of cars and clothes than any temporal advantage. Or maybe that was the temporal advantage. Who knows? But regardless, the rest of us seemed to have turned out all right…)

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July 24, 2008, 4:00 pm · By Adam Lashinsky

Sadly, VMware is no Google

With shares of virtualization software maker VMware (VMW) in free-fall, it’s worth noting that for all the comparisons that have been made between the EMC-controlled (EMC) company and Google (GOOG), VMware’s stock has now done something Google’s never did: It trades well below it’s opening price in 2007. As I noted when VMware went public not quite a year ago, the shares were offered at $29 but opened at $52. At one point VMware’s shares soared above $125.

Thursday they were down about 5% at $35 shortly before the close.

VMware and Google are in completely different businesses, but the comparisons were and are still relevant. When I spoke to executives there for the feature I wrote about ex-CEO Diane Greene last fall, more than one noted to me that VMware was competing – and winning – against Google in the battle for engineering talent. Both companies have beaten Microsoft (MSFT), by the way, in their respective markets. Wall Street currently seems to think Google will continue to do a better job fending off Mr. Softee than a Greene-less VMware will.

On the subject of Greene’s departure, I blogged the news on July 8. But frankly it wasn’t until I read this post that I remembered that I’d noted last year that Greene only had a one-year contract that ended in July.

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July 22, 2008, 11:46 am · By Nadira

Corporate ‘toolz’ revealed

Just a quick update from one of our Gig authors: It’s a new online comic strip, corporatetoolz, from Jake Greene, the author of Whoa, My Boss is Naked: A Career Book for People Who Would Never Be Caught Dead Reading a Career Book. (You may remember him from our “Could ‘Rock of Love’ boost your career?” post.)

My personal fave?

Of course, as soon as I saw this, I thought of about 15 more I’d do (if only I had a shred of artistic talent!), but I bet you guys have even better ones than I do. Care to share?

 

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July 21, 2008, 8:58 pm · By Adam Lashinsky

Management matters-even in Silicon Valley

My colleague Jennifer Reingold wrote a great article in the current issue of Fortune about my friend Bill Campbell. As she quotes Intuit (INTU) founder Scott Cook, “this is a story that needs to be told.”

Many people in Silicon Valley know about Campbell, an advisor to Google (GOOG), director at Apple (AAPL), coach to entrepreneurs at Kleiner Perkins, bar owner and all-around good guy. Most people outside of Silicon Valley haven’t heard of him, and I’m hoping this article changes that.

I’ve known Campbell for years. He’s one of the most genuine, most interesting, most lovable people in a world not always known for all those attributes simultaneously.

My key takeaway from Reingold’s article is this: The technology world likes to think the bits and bytes are all that matter, that ideas, science, code and so on are enough to make a successful company. But they aren’t enough. Management matters too. Technology companies need to pay attention to things like strategy, career management, organizational structure and the other ingredients of business that sometimes get overlooked in the Valley.

Campbell often is the glue that holds together the visionaries and the MBAs, both of whom make Silicon Valley what it is.

I know you’ll enjoy this article.

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July 21, 2008, 12:50 pm · By Adam Lashinsky

Yahoo prediction: Jerry’s a goner

Carl Icahn and Yahoo’s (YHOO) board of directors each blinked, but it increasingly looks like Yahoo CEO Jerry Yang will end up on the losing end of this debacle.

Just to read the details, this is an amicable end to a nasty spat. Yahoo agrees to put Icahn and two of his nominees on its board. Icahn, in turn, agrees to drop his proxy fight to replace Yang as CEO. Interestingly — and wisely — Bobby Kotick, CEO of Activision Blizzard (ATVID), has decided to get the heck out of Dodge and leaves the Yahoo board.

Now Yahoo can hold its long-delayed shareholder meeting on Aug. 1 in relative peace and quiet.

But here’s a prediction: Jerry Yang won’t be CEO come year-end. He’s been able to stare down Microsoft (MSFT) and Icahn, but he hasn’t done much of anything for shareholders. (The shares were down 3%, to about $22 Monday. They were at $28 when Yang was named CEO in June, 2007, and around $19 when Microsoft launched it hostile takeover bid at $31.) Not only has the stock fallen, but Yahoo has been in disarray. It has continued to lose search marketshare to Google, its products have floundered, and its executives have been leaving in droves. All the excitement has obscured the fact that Yahoo’s performance is probably suffering in light of the overall economic slowdown, making it even more critical that Yahoo get a seasoned operating executive at the top of the org chart. Microsoft, Google (GOOG) and ValueClick (VCLK) reported last week a slowdown in online advertising growth.

Yahoo reports Tuesday after the market close. Soon, when it has some time to think, the board will decide that it’s got to correct the mistake it made by naming Yang CEO in the first place last year. Yahoo needs its Mark Hurd (HPQ), and this person can’t be that difficult to find. Of course, it’s a huge challenge. But after all it’s been through Yahoo remains one of the most valueable media properties in the world. It’s the dream job for the CEO candidate with enough gumption and ambition to take it on.

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