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Life lessons from Client #9

In a interview two years ago, [Eliot] Spitzer, then-attorney general [and now governor, at least for the next few minutes], told ABC News he had some advice for people who break the law.

“Never talk when you can nod, and never nod when you can wink, and never write an email because it’s death. You’re giving prosecutors all the evidence we need,” he said.

[Source: ABC News.]

At approximately 8:12 p.m… LEWIS [the madam] received a call from Client-9 [Spitzer]. During the call, LEWIS told Client-9 that the “package” [cash] did not arrive today. LEWIS asked Client-9 if there was a return address on the envelope, and Client-9 said no. LEWIS asked: “You had [the correct address]…,” and Client-9 said: “Yup, same as in the past, no question about it.” LEWIS asked Client-9 what time he was interested in having the appointment [illegal hooker sex] tomorrow. Client-9 told her 9:00 p.m. or 10:00 p.m…

At approximately 8:23 p.m., LEWIS called Client-9, and told him that the [her boss] said he [Spitzer] could not proceed with the appointment [illegal hooker sex] with his available credit. After discussing ways to resolve the situation, LEWIS and Client-9 I agreed to speak the following day…

At approximately 3:20 p.m… LEWIS… received a call from Client-9. During the call, LEWIS told Client-9 that they were still trying to determine if his deposit had arrived. Client-9 told LEWIS that he had made a reservation at the hotel, and had paid for it in his [fake] name. Client-9 said that there would be a key waiting for her, and told LEWIS that what he had on account with her covered the “transportation” (believed to be a reference to the cost of the trainfare for “Kristen” from New York to Washington, D.C.)…

At approximately 4:58 p.m… LEWIS… received an incoming call from Client-9. During the call, LEWIS told Client-9 that his package arrived today, and Client-9 said good. LEWIS asked Client-9 what time he was expecting to have the appointment. Client-9 told LEWIS maybe 10:00 p.m. or so, and asked who it was. LEWIS said it was “Kristen,” and Client-9 said “great, okay, wonderful.” LEWIS told Client-9 that she would give him a final price later, and asked Client-9 whether he could give “Kristen” “extra funds” at this appointment in order to avoid payment issues in the future. Client-9 said maybe, and that he would see if he could do that. LEWIS explained that the agency did not want a model accepting funds for a future appointment, but that she was going to make an exception that way a deposit could be made so that he would have a credit, and they would not have to “go through this” next time. Client-9 said perfect, and that he would call her regarding the room number…

[During the next phone call] Client-9 asked LEWIS to remind him what ‘Kristen” looked like, and LEWIS said that she was an American, petite, very pretty brunette, 5 feet 5 inches, and 105 pounds. Client-9 said that she should go straight to [hotel room] 871…

Well, at least he didn’t write any emails.

[Source: Federal indictment of the prostitution ring used by Eliot Spitzer.]

An hour and a half with Barack Obama

I’ve tried very hard to keep politics out of this blog — despite nearly overpowering impulses to the contrary — for two reasons: one, there’s no reason to alienate people who don’t share my political views, as wrong-headed as those people may clearly be; two, there’s no reason to expect my opinion on political issues should be any more valid than any other reader of what, these days, passes for the New York Times.

That said, in light of the extraordinary events playing out around us right now in the runup to the presidential election, I would like to share with you a personal experience that I was lucky enough to have early last year.

Early in 2007, a friend of mine who is active in both high-tech and politics called me up and said, let’s go see this first-term Senator, Barack Obama, who’s ramping up to run for President.

And so we did — my friend, my wife Laura, and me — and we were able to meet privately with Senator Obama for an hour and a half.

The reason I think you may find this interesting is that our meeting in early 2007 was probably one of the last times Senator Obama was able to spend an hour and a half sitting down and talking with just about anyone — so I think we got a solid look at what he’s like up close, right before he entered the “bubble” within which all major presidential candidates, and presidents, must exist.

Let me get disclaimers out of the way: my only involvement with the Democratic presidential campaigns is as an individual donor — after meeting with the Senator, my wife and I both contributed the maximum amount of “hard money” we could to the Obama campaign, less than $10,000 total for both the primary and the general election. On the other hand, we also donated to Mitt Romney’s Republican primary effort — conclude from that what you will.

I carried four distinct impressions away from our meeting with Senator Obama.

First, this is a normal guy.

I’ve spent time with a lot of politicians in the last 15 years. Most of them talk at you. Listening is not their strong suit — in fact, many of them aren’t even very good at faking it.

Senator Obama, in contrast, comes across as a normal human being, with a normal interaction style, and a normal level of interest in the people he’s with and the world around him.

We were able to have an actual, honest-to-God conversation, back and forth, on a number of topics. In particular, the Senator was personally interested in the rise of social networking, Facebook, Youtube, and user-generated content, and casually but persistently grilled us on what we thought the next generation of social media would be and how social networking might affect politics — with no staff present, no prepared materials, no notes. He already knew a fair amount about the topic but was very curious to actually learn more. We also talked about a pretty wide range of other issues, including Silicon Valley and various political topics.

With most politicians, their curiosity ends once they find out how much money you can raise for them. Not so with Senator Obama — this is a normal guy.

Second, this is a smart guy.

I bring this up for two reasons. One, Senator Obama’s political opponents tend to try to paint him as some kind of lightweight, which he most definitely is not. Two, I think he’s at or near the top of the scale of intelligence of anyone in political life today.

You can see how smart he is in his background — for example, lecturer in constitutional law at University of Chicago; before that, president of the Harvard Law Review.

But it’s also apparent when you interact with him that you’re dealing with one of the intellectually smartest national politicians in recent times, at least since Bill Clinton. He’s crisp, lucid, analytical, and clearly assimilates and synthesizes a very large amount of information — smart.

Third, this is not a radical.

This is not some kind of liberal revolutionary who is intent on throwing everything up in the air and starting over.

Put the primary campaign speeches aside; take a look at his policy positions on any number of issues and what strikes you is how reasonable, moderate, and thoughtful they are.

And in person, that’s exactly what he’s like. There’s no fire in the eyes to realize some utopian or revolutionary dream. Instead, what comes across — in both his questions and his answers — is calmness, reason, and judgment.

Fourth, this is the first credible post-Baby Boomer presidential candidate.

The Baby Boomers are best defined as the generation that came of age during the 1960’s — whose worldview and outlook was shaped by Vietnam plus the widespread social unrest and change that peaked in the late 1960’s.

Post-Boomers are those of us, like me, who came of age in the 1970’s or 1980’s — after Vietnam, after Nixon, after the “sexual revolution” and the cultural wars of the 1960’s.

One of the reasons Senator Obama comes across as so fresh and different is that he’s the first serious presidential candidate who isn’t either from the World War II era (Reagan, Bush Sr, Dole, and even McCain, who was born in 1936) or from the Baby Boomer generation (Bill Clinton, Hillary Clinton, John Kerry, Al Gore, and George W. Bush).

He’s a post-Boomer.

Most of the Boomers I know are still fixated on the 1960’s in one way or another — generally in how they think about social change, politics, and the government.

It’s very clear when interacting with Senator Obama that he’s totally focused on the world as it has existed since after the 1960’s — as am I, and as is practically everyone I know who’s younger than 50.

What’s the picture that emerges from these four impressions?

Smart, normal, curious, not radical, and post-Boomer.

If you were asking me to write a capsule description of what I would look for in the next President of the United States, that would be it.

Having met him and then having watched him for the last 12 months run one of the best-executed and cleanest major presidential campaigns in recent memory, I have no doubt that Senator Obama has the judgment, bearing, intellect, and high ethical standards to be an outstanding president — completely aside from the movement that has formed around him, and in complete contradition to the silly assertions by both the Clinton and McCain campaigns that he’s somehow not ready.

Before I close, let me share two specific things he said at the time — early 2007 — on the topic of whether he’s ready.

We asked him directly, how concerned should we be that you haven’t had meaningful experience as an executive — as a manager and leader of people?

He said, watch how I run my campaign — you’ll see my leadership skills in action.

At the time, I wasn’t sure what to make of his answer — political campaigns are often very messy and chaotic, with a lot of turnover and flux; what conclusions could we possibly draw from one of those?

Well, as any political expert will tell you, it turns out that the Obama campaign has been one of the best organized and executed presidential campaigns in memory. Even Obama’s opponents concede that his campaign has been disciplined, methodical, and effective across the full spectrum of activities required to win — and with a minimum of the negative campaigning and attack ads that normally characterize a race like this, and with almost no staff turnover. By almost any measure, the Obama campaign has simply out-executed both the Clinton and McCain campaigns.

This speaks well to the Senator’s ability to run a campaign, but speaks even more to his ability to recruit and manage a top-notch group of campaign professionals and volunteers — another key leadership characteristic. When you compare this to the awe-inspiring discord, infighting, and staff turnover within both the Clinton and McCain campaigns up to this point — well, let’s just say it’s a very interesting data point.

We then asked, well, what about foreign policy — should we be concerned that you just don’t have much experience there?

He said, directly, two things.

First, he said, I’m on the Senate Foreign Relations Committee, where I serve with a number of Senators who are widely regarded as leading experts on foreign policy — and I can tell you that I know as much about foreign policy at this point as most of them.

Being a fan of blunt answers, I liked that one.

But then he made what I think is the really good point.

He said — and I’m going to paraphrase a little here: think about who I am — my father was Kenyan; I have close relatives in a small rural village in Kenya to this day; and I spent several years of my childhood living in Jakarta, Indonesia. Think about what it’s going to mean in many parts of the world — parts of the world that we really care about — when I show up as the President of the United States. I’ll be fundamentally changing the world’s perception of what the United States is all about.

He’s got my vote.

ABC thinks you’re an idiot

From well-regarded television industry journalist and future blogger Bill Carter:

Looking to strike a blow against the proliferation of digital video recorders, the ABC network, its affiliated broadcast stations, and Cox Communications’ cable systems are establishing an on-demand video service that would allow viewers to watch ABC shows like “Lost” and “Desperate Housewives” any time they choose.

The catch: It uses a new technology that disables the viewers’ ability to fast-forward through commercials…

Several executives involved in the project, which ABC plans to offer to other cable systems around the country, said the move was an overt attempt to staunch the use of DVRs like TiVo, which viewers often use to avoid commercials. That activity is increasingly seen as threat to broadcast television, which depends on ad revenue to pay for programs.

“This does counter the DVR,” said Anne Sweeney, the president of the Disney-ABC television group. “You don’t need TiVo if you have fast-forward-disabled video on demand…”

Ray Cole, president of Citadel Communications, which owns three local ABC stations, who is also the chairman of the board of affiliated ABC stations, was even more direct about the goal of the new service.

“As network and affiliates, we both have an interest in slowing down the explosive growth of DVRs,” Mr. Cole said. “This is about combating DVRs. As we developed this at every stage, there was an agreement that however we put this together, disabling the fast-forward function was key.”

A pictorial representation of ABC’s view of you, the viewer:

 

 

Link: What an ABC executive visualizes when she thinks of you.

 

Irony is dead, last gasp of newspaper industry edition

February 2008:

Four large newspaper companies are joining forces to sell advertisements on the Internet, hoping that the combined heft of their Web sites will encourage large advertisers to spend more money.

Each of the four companies — the Tribune Company, the Gannett Company, the Hearst Corporation and The New York Times Company — is transferring a portion of its online ad space to quadrantONE, a new company that will be announced Friday.

The purpose of the joint venture, which will be based in Chicago and will hire 17 people [commitment!], is to let national advertisers place ads on local Web sites with a single phone call [phone call!].

The sites belong to papers like The Los Angeles Times (which is a Tribune property), The Des Moines Register (Gannett), The Houston Chronicle (Hearst) and The Boston Globe (The New York Times Company).

Some of the companies’ flagship sites, however, will not be included, because they are not considered local. These include the sites of USA Today, a Gannett paper, and of The New York Times and The International Herald Tribune, which are owned by the Times Company. [These are also known as the ones that actually have reasonable numbers of readers.]

Executives involved said the newspaper companies understand [by which they mean, “used to have a local monopoly but don’t anymore”] the local market better than Google, Yahoo and Microsoft…

The companies were also all part of the New Century Network in the late 1990s…

Source: New York Times.

March 1998:

[W]hen New Century Network was kicked off last April by nine [newspaper] giants teaming up to conquer electronic competition, even the launch party bombed…

In a ballroom at the Newspaper Association of America convention in Chicago, a thousand bottles of champagne emblazoned with ”New Century Network: The Collective Intelligence of America’s Newspapers” awaited the hordes expected to come to toast the watershed new-media joint venture. When fewer than 100 people showed up, Chief Executive Lee de Boer made an abbreviated speech before retreating…

The reception was the first public humiliation for New Century Network, but only one in a series of blunders that culminated in the company’s abrupt shutdown on Mar. 10. Created in 1995 to unite newspapers against Microsoft Corp. and other competitors girding to woo electronically advertisers and readers, New Century Network came to embody everything that could go wrong when old-line newspapers converge with new media…

Started with $1 million each from Knight-Ridder, Tribune, Times Mirror, Advance Publications, Cox Enterprises, Gannett, Hearst, Washington Post, and New York Times, New Century seemed an entrepreneurial dream. The Internet had just opened to the world, creating vast new competition for readers–and for the advertisers that pump $40 billion into newspapers. But it also gave newspapers a chance to capture national accounts that favored the one-stop-shopping convenience of TV and national magazines…

[T]he [newspaper] companies had wildly diverging philosophies about how newspapers should make the electronic leap and what role the new venture should play. ”You had private companies and public companies and companies that were risk-averse and those that were risk-tolerant,” says Harry Chandler, head of new media for Los Angeles Times. ”You had big-city papers and small chains. We shared a need. But it was frustrating trying to come together.”

While the wired world moved at warp speed, New Century spent 18 months hiring a permanent ceo and two years creating an electronic doorway to 140 newspapers… ”This [Internet] thing is really racing,” says Al Sikes, the former Federal Communications Commissioner who is president of Hearst New Media. ”Organizations of a number of co-equals can’t turn on a dime.”…

The partners ultimately invested more than $25 million in the virtual venture… The board decided… to pull the plug, coming to a remarkably quick agreement–for the first and final time…

Source: Business Week.

Andy Kaufman lives!

It’s not me, I swear…

Some big companies have had a surprise during their earnings conference calls this quarter…

At least seven times just the past three weeks, a mystery caller has cleverly insinuated himself into the normally well-manicured ritual of the quarterly calls…

“Congratulations on the solid numbers — you always seem to come through in challenging times,” he said to Leo Kiely, president and chief executive officer of Molson Coors Brewing Co., on Feb. 12, convincingly parroting the obsequious banter common to the calls. “Can you provide some more color as to what you are doing for your supply chain initiatives to reduce manufacturing costs per hectoliter, as you originally promised $150 million in synergy or savings to decrease working capital?”

…[M]any CEO’s have had… trouble telling the difference. Most have gamely tried to answer the questions. Mr. Kiely and two other Molson executives stuck politely with the caller through three detailed follow-ups. Timothy Wolf, the company’s global chief financial officer, closed by telling him, “We think we will have some more positive encouraging things to share with you next month in New York,” according to a transcript of the call…

Executives at PepsiCo Inc., Dean Foods Co., Newell Rubbermaid Inc. and others have had similar experiences since around mid-January…

[A]nnoyed executives and analysts are wondering why someone would want to play a game with dry business calls that normally follow a tightly controlled formula — unless the game is the whole point. They can’t figure out how the caller is getting any benefit from so closely mimicking them. “If he was spoofing I would hope he’d be funnier,” says Bill Schmitz, an analyst at Deutsche Bank Securities.

[Mr. Schmitz has perhaps not been listening to the usual questions on such calls all that carefully.]

“Our quarterly earnings calls are key opportunities to [sic] us to interact with the investment community and to explain our results,” says a Newell Rubbermaid spokesman, David Doolittle. “Anyone who would come on the call and use some of that time unproductively is disruptive.”

[Mr. Doolittle then threatened to spank the mystery caller with a Newell Rubbermaid spatula.]

Source: Wall Street Journal.

Winning friends and influencing US legislators, Huawei edition

The Chinese company participating in the planned buy-out of a US telecoms equipment maker has angrily rounded on US politicians who claim the deal could endanger US national security.

Xu Zhijun, chief marketing officer at Huawei Technologies, told the Financial Times that the concerns expressed by some US lawmakers were “bullshit”.

Source: Financial Times.

Deutsche Bank CEO: We’re screwed, but we’re just fine

Deutsche Bank Chief Executive Officer Josef Ackermann said rating downgrades for bond insurers [and the presumed resulting collapse in prices of bonds insured by those insurers] pose risks that could match the U.S. subprime market collapse.

“It could be a tsunami-like event comparable to subprime,” Ackermann said in a Bloomberg Television interview in Frankfurt today.

Deutsche Bank, Germany’s biggest bank, is “well positioned” on its risk from bond insurers, he said.

Mmmm hmmmmmmm.

Source: Bloomberg.

The Titanic reports on the iceberg

New York Times:

In just the last few weeks, The San Diego Union-Tribune eliminated more than 100 jobs, one-tenth of its work force. The Chicago Sun-Times began a major round of newsroom layoffs, then put itself up for sale, and publishers in Minneapolis and Philadelphia warned that tough economics could force cuts there.

Not long ago, news like that would have drawn much commentary and hand-wringing in the newspaper business, but in the last few months, reductions have become so routine that they barely make a ripple outside each paper’s hometown. Since mid-2007, major downsizing — often coupled with grim financial reports — has been imposed at The San Francisco Chronicle, The Seattle Times, The San Jose Mercury News, USA Today and many others.

The talk of newspapers’ demise is older than some of the reporters who write about it, but what is happening now is something new, something more serious than anyone has experienced in generations. Last year started badly and ended worse, with shrinking profits and tumbling stock prices, and 2008 is shaping up as more of the same, prompting louder talk about a dark turning point.

“I’m an optimist, but it is very hard to be positive about what’s going on,” said Brian P. Tierney, publisher of The Philadelphia Inquirer and The Philadelphia Daily News. “The next few years are transitional, and I think some papers aren’t going to make it.”

Advertising, the source of more than 80 percent of newspaper revenue, traditionally rose and fell with the overall economy. But in the last 12 to 18 months, that link has been broken, and executives do not expect to be able to repair it completely anytime soon.

In 2007, combined print and online ad revenue fell about 7 percent. In the last six decades, only one other year — 2001, when there was a recession — had a steeper decline, according to the Newspaper Association of America. Adjusted for inflation, 2007 ad revenue was more than 20 percent below its peak in 2000.

Circulation revenue has declined steadily since 2003, and the number of copies sold has been slipping about 2 percent a year. Some of the largest papers — including The San Francisco Chronicle, The Boston Globe and The Los Angeles Times — have lost 30 to 40 percent of their circulation in just a few years.

The long-term shift of advertising to the Internet — especially classified ads for things like jobs, cars and houses — accelerated last year. The real estate downturn hit the newspaper business hard, especially in California and Florida, where real estate ads fell more than 20 percent at some newspapers…

Critics of the industry — including many executives within it [and the occasional blogger] — say that newspapers have done a poor job adapting to the Internet and working creatively and aggressively to sell ads.

Mr. Tierney agrees, “but you could change that and still be sliding,” he said. “When everyone’s taking on water, you can’t expect to stay dry — only less wet.”

That is in sharp contrast to his tone in 2006, when he led a group of investors who paid $515 million for the two Philadelphia papers. Back then, Mr. Tierney dismissed the industry’s gloomy talk, expressing confidence that it could win back paying readers and advertisers…

Falling stock prices made newspapers look like tempting targets to some buyers in 2006 and early 2007, but even then, the prices of the transactions that did take place were seen as inflated, and there was little interest from other potential bidders. McClatchy bought the Knight Ridder chain, and the News Corporation bought Dow Jones & Company, publisher of The Wall Street Journal. Many papers were sold in smaller deals, including the Philadelphia dailies, The San Jose Mercury News and The Star Tribune of Minneapolis.

Share prices have continued to fall since then, and analysts think they will go lower still. But since last spring, the supply of buyers seems to have dried up…