Monday, May 5, 2008

Giving thanks to Steve Ballmer

I made a killing in an Inkling prediction market this past weekend when the MicroHoo talks went down the tubes: Will Microsoft announce a successful buyout of Yahoo! in 2008?. I started shorting the deal last week at $84, and just kept buying all the way down.

I have no idea how the corporate world works, and how you are supposed to consummate these sorts of deals. For all I know it's against the law to talk to the buy-out target before the fact. Regardless, I think the whole notion is stupid. Think how much better this would have gone in a transparent world? Where Steve sends Jerry an email, or even better-- a tweet, and says, "Can we talk? I want to share an idea we've had with you." Then they get together over a beer, "discover" that they have pretty different cultures, that there are significant barriers, and that maybe it wasn't such a good idea after all.

Maybe things just aren't done that way in business-- how would I know? We don't deal in numbers that big in academia. I do know that a little transparency might have led to a whole lot more trust, and if the deal couldn't be made at least they wouldn't be facing such a brutal and very public failure.

Regardless, their failure catapulted me into the top 100 traders at Inkling, and on to the leader-board for the week. And for that I am thankful!

1 comment:

Anonymous said...

Like the big red arrow :).

Actually, as a business professor, I can tell you that transparency would really help in many business dealings. A real issue in business is getting good information cost-effectively. However, running counter to that is the notion that you could somehow benefit from private information.