Daily Archives: July 30, 2006

What Gibson Saga Reveals About Internet-Era News Coverage

I watched with some fascination as the sordid story of Mel Gibson’s latest entanglement with police played itself out on the Internet this weekend.

What interesting is not so much what Gibson is alleged to have said and done after being arrested for drunk driving along the Pacific Coast Highway near Malibu — though that is a very interesting story — but how the initial coverage of the affair by the mainstream news media quickly was superseded by blog-news media, which uncovered a bigger story, including an anti-Semitic tirade unleashed by Gibson at the time of his arrest and what might have been a coverup by the Malibu Sheriff’s department.

At the time of his arrest, Gibson was said to have issued a torrent of expletives at the attending officers, saying that he "owned Malibu" and that the officer involved in his apprehension would suffer gravely for daring to charge the celebrity with a crime. Back in the day before Internet news and muckraking online news coverage, Gibson probably would have been right. All we would have known was what was published in the initial newswire reports and the carefully redacted coverage in such august publishing organs as the Los Angeles Times and the New York Times. Mel Gibson’s public image, and his resulting brand, would not have suffered.

Now, though, it’s a different world, one that the old-guard news media still doesn’t fully comprehend. It’s not so much that they’re slow — actually, in this instance, the newswire reports of Gibson’s arrest surfaced quite quickly — but that they’re still playing by old rules, allowing the authorities and spinmeisters to filter and control what the public reads rather than giving us the unexpurgated truth. They don’t yet realize that the public, as individual consumers of news, is more in control now that it has ever been, and that news junkies — who, typically, want to get the real story as opposed the "official" story — no longer will be satisfied with partial or self-censored content.

The established order of the news media must do more than just shift its business model increasingly to web-based approach. It also must be more truthful with its readership than it has ever been previously.

Ellison’s Irresponsible Hold on Oracle

Mercurial and borderline-psychotic company founders throughout Silicon Valley are envious of the iron-clad grip that Larry Ellison has on Oracle, the company he co-founded back in the 1970s, when men were men and trousers were ridiculously flared.

Ellison is Oracle’s largest single shareholder, controlling more than 23 percent of the company’s stock, and he has assembled a board of directors whose group photograph could serve as an illustration for servility and obsequiousness. Ellison likes to believe he is indispensable, irreplaceable — and it doesn’t help when he surrounds himself with executives and board members who encourage those delusions. Pre-Inca civilizations indulged in less hagiography than does the Cult of Larry.

The question is not whether Oracle has enjoyed success under Ellison. He was the driving force that built the company into a database-software giant and later, belatedly, pushed it aggressively into enterprise-application software, though with miscalculations and missteps along the way. He hired talented senior lieutenants, for the most part, subsequently forcing them out of the company as their accomplishments and ambitions grew.

What’s at issue is whether Oracle is being run responsibly, from the standpoint of corporate governance, by kool-aid drinking board members and the fawning executives who exacerbate Ellison’s worst tendencies. Well, no, it isn’t being run responsibly. In fact, shareholders whose names aren’t Larry Ellison should be mad as hell and unwilling to take it anymore.

As a recent Forbes article attests, there’s more complacency at Oracle than there ought to be, and that complacency is most glaringly obvious in Ellison’s and the board’s complete lack of a succession plan for the Database Deity. While Oracle’s 62-year-old CEO, who no longer has an office at the Redwood Shores-based company’s headquarters, jets around the world racing yachts and overseeing the construction of a 40-acre Japanese-style village estate in Woodside, CA., the company’s strategic direction is being left, by default, to a group of executives who seem unprepared and ill-equipped for the task.

It’s Ellison’s prerogative to do what he wants with his money, but, as an active CEO, he owes Oracle and its shareholders something more than web surfing from a yacht and occasional phone calls back to home base. That is especially true when his current lieutenants, co-presidents Safra Katz and Charles Phillips, are an efficiency-minded technocrat and a glorified sales VP, respectively.

Where’s the succession planning at Oracle? There is none — and the company’s board and its senior executives admit as much.

Says Jeffrey Henley, the board chairman:

“There is no successor to Larry, no heir apparent. We discuss the subject, but there is no perfect plan. Larry still wants total control.”

And, of course, the board just gives it to him! Am I the only one astounded by attitude?

Maybe Katz or Phillips recognizes the problem. Umm, no.

Says Katz:

“Without him, Oracle wouldn’t be the same.”

Says Phillips:

“Larry will be here forever. We don’t discuss succession. That’s not my job.”

It would seem to be nobody’s job. Not the board’s, not Ellison’s, nobody’s.

It’s up to Oracle’s shareholders, individually and collectively, to make succession and corporate governance two issues that Oracle’s board cannot ignore. If I were an institutional investor, mutual fund, or individual punter with an investment in Oracle — which, thankfully, I am not — I would organize fellow shareholders to raise these matters persistently and vehemently until they are addressed satisfactorily. Make life a living hell for Ellison and his board until they acknowledge shareholder concerns.

Phillips might think Ellison will be at Oracle forever — and perhaps Ellison believes he’s an immortal, too — but board members and shareholders should know better.