138 and counting

I'm killing time at Washington National Airport (a/k/a Reagan). How many airports have I flown into? In a few minutes I counted 138, but there may be more.

Albany, Albuquerque, Amsterdam, Atlanta (Fulton County), Atlanta (Hartsfield-Jackson), Atlanta (Peachtree Dekalb), Auckland, Austin, Baltimore, Bangalore, Bangkok, Barcelona, Beijing, Birmingham (Ala), Boston, Brisbane, Brussels, Buffalo, Burbank, Calgary, Charlotte, Chicago (O'Hare), Cincinnati, Cleveland, Colorado Springs, Copenhagen, Dallas (D/FW), Daytona Beach, Denver (DIA), Denver (Stapleton), Detroit, Dubai, Dublin, Edmonton, Erie, Fort Lauderdale, Fort Myers, Frankfurt, Fuzhou, Geneva, Greensboro, Greenville-Spartanburg, Guangzhou, Halifax, Hanover, Hartford, Hilo, Hong Kong, Houston (Hobby), Houston (IAH), Indianapolis, Jacksonville, Jaipur, Kahului, Kansas City, Kuala Lumpur, Key West, Las Vegas, Little Rock, London (City), London (Gatwick), London (Heathrow), Long Beach, Los Angeles, Lyon, Madrid, Manchester (NH), Melbourne (Australia), Melbourne (Fla), Memphis, Miami, Milan, Minneapolis, Mobile, Montgomery, Montreal (Dorval), Mumbai, Munich, Nashville, New Delhi, New Orleans (Lakefront), New Orleans (Moisant), New York (JFK), New York (Laguardia), Newark, Nice, Oakland, Oklahoma City, Ontario (Calif), Orlando, Ottawa, Paris (CDG), Paris (Orly), Pensacola, Philadelphia, Phoenix, Pittsburgh, Portland (Oregon), Quebec City, Raleigh-Durham, Reno, Richmond, Rio de Janeiro (Galeão), Rochester, Sacramento, Saint John, Saint John's, Saint Louis, Salt Lake City, San Diego, San Francisco, San Jose, San Juan, Santa Ana, Saskatoon, Seattle, Shanghai (Hongqiao), Shanghai (Pudong), Shreveport, Singapore, Sioux Falls, Stockholm, Stuttgart, Sydney, Syracuse, Taipei, Tampa, Tokyo (Narita), Toronto (Pearson), Toulouse, Udaipur, Valparaiso (Fla), Vancouver, Vienna, Washington (Dulles), Washington (National), Winnipeg, and Zurich.

Lord, have mercy.

RIP, Patty

Patty Duke died Tuesday. For the first two hours after I heard the news, I thought I was the only one who had a crush on her in 1963-65. Not so! I've lost count of the number of Facebook and Twitter posts from guys my age about her.

What made her so attractive to my cohort? First, she had a smile that radiated warmth and acceptance. Second, her role on The Patty Duke Show was a simple teenager, not someone pretending or aspiring to act like an adult. Third, she was funny. Fourth, her character was mostly happy and upbeat. And fifth, she was stunningly pretty even though production norms of the day avoided any display of her physique. (This was still conservative, black-and-white TV before I Dream of Jeannie or Batgirl and Catwoman on Batman changed the rules about tight-fitting costumes.) All these things made Patty Duke non-threatening and seemingly accessible to younger boys.

I had not been old enough to fall for Annette Funicello on The Mickey Mouse Club, and by the time Gilligan's Island converted to color and I began to lust for Mary Ann — played by Dawn Wells, a much older actress — I was beginning to understand more about passion and had left behind the simple adoration that I had for Patty Duke.

She went on to play a very different character in Valley of the Dolls, a film which of course I did not see at the time. Later she revealed that her years of acting on TV were a grim experience for her and that she suffered from bipolar disorder as well. I was naturally oblivious.

So, like my cohort, I am particularly sad to hear of her death because I still feel a connection. And if you feel the same way, I have one final question: Cathy or Patty? For me it was Cathy.

Senseless acquisitions

In my last blog I wrote of the mismatch between the investment community's expectations for Twitter and the apparently inherent limitations on Twitter's ability to grow and to monetize its user base. Today I want to address a similar perverse behavior of the investment community: overpaying for acquistions. It's a topic I know something about, having glimpsed the inside.

How many times have we seen Company A acquire Company B with great fanfare, only for Company A to quietly sell Company B several years later for less than the original value? Yesterday Dell announced that they're selling Perot Systems for $3.06 billion. They purchased it in 2009 for $3.9 billion. More examples? DaimlerBenz buys and sells Chrysler. Cisco buys and sells both Scientific Atlanta and Linksys (two mistakes by the over-rated John Chambers). eBay buys and sells Skype… and on and on.

Most of the time, Company B allows itself to be bought easily. The board of directors of Company B has a legal duty to get the highest price they can. As long as they don't lie about their company, they aren't to blame for a transaction gone wrong. I can't think of an instance when when the buyer of a company sued the seller for fraud or misrepresentation. I suppose it could happen, but caveat emptor is a good rule and the courts are reluctant to make amends for a buyer's misjudgment. Besides, when a buyer screws up, they'd rather put the matter behind them as quickly and quietly as possible. Even if the purchased company lied, critics will correctly say that the buyer should have discovered the lies during due diligence.

No, the blame for paying too much in an acquisition falls on the buyer —  and more directly on the buyer's investment banker. Of course, the investment banker is often compensated in proportion to the size of the deal, and they don't get paid in full if a deal doesn't close. It's no surprise, then, that investment bankers are often wildly optimistic about the numeric value of the transaction to the buyer.

When eBay was acquiring Skype in 2005, I happened to see the valuation package from eBay's investment banker. (How did I come to see such a tightly guarded document? Don't ask, don't tell.) The valuation was complete nonsense, but it was wrapped in impressive financial bling, it had a big name on the cover, and it purported to use the very best methodology from the Harvard, Wharton, Chicago, and Stanford business schools. If I include the earn-out provisions of the deal, eBay paid over $4 billion for Skype — an astounding figure. Not long after, having finally grasped the reality of what they'd bought, eBay sold most of Skype to outside investors at a valuation of less than $3 billion. Microsoft eventually stepped in and bailed out eBay, but eBay's executives and board of directors in 2005 should have been sacked and required to get brain MRIs before working in corporate America again. By the way, eBay has had a lackluster record ever since.

During my years at Nortel I saw acquisitions whose financials would make you laugh, cry, or vomit. Some of those purchases were paid in hard cash, not in the momentarily inflated Nortel common stock. Of course, Nortel eventually went bankrupt. Given the astute senior leadership as evidenced by those deals, the death of the company could have been predicted (and was, by a few people).

Sometimes an acquisition fails not because the buyer paid too much but because the buyer could not effectively assimilate the purchase. I saw that happen at Nortel too. But when a buyer overpays, the fish rots from the head.

Twitter in twilight

I use Twitter a lot — more than Facebook, more than email, more than Feedly and RSS (still a good tool, by the way), and way more than LinkedIn. Twitter is my primary mechanism to gather information about the world and to follow interesting or funny people. I don't use hashtags; to me Twitter is all about a self-curated feed, the sources of which I review once a month. I'd be delighted if Twitter lasts forever in its current form.

Nevertheless, many people in Silicon Valley and Wall Street consider Twitter to be a failure. Some even predict its death. How can a company that has attracted 300 million users be in such disfavor?

Twitter's share price is far below the IPO price. This is a symptom not a cause, but it makes the investment community look bad. They don't like that, and they'll find someone to blame. The real problem is that Twitter's user base has flatlined at 300 million but the company's operating expenses are aimed at a much larger user base. In contrast, Facebook's user base continues to grow (now exceeding 1.5 billion).

Twitter has been extracting more revenue per user in the form of advertising and promoted tweets, but the gap between revenue and expenses remains very large. This cannot continue forever. Either the company triples its user base (difficult), cuts expenses to turn a profit on the user base that it has today (very difficult), or finds a way to generate even more revenue per user (incredibly difficult). No wonder the CEO's office at Twitter has been a revolving door!

I see a big difference between Twitter and Yahoo!, which fails to offer anything valuable and unique anymore. Yahoo! deserves to die, but not Twitter. That said, when it comes to the future of Twitter, "I've got a bad feeling about this."

Novels, a project completed

In high school our history and literature classes always seemed to arrive at the year 1900 when school let out for the summer. I preferred reading non-fiction over reading novels, but from my teen years I had a certain fascination for 20th-century American novels that I read about but never read. Five years ago I embarked on a project to read one novel each from a list of 20th-century American writers. Traveling on an airplane as much as I do provided the time, and Amazon's Kindle software for my laptop and iPhones made it easy to bring the novels at no additional weight or size.

I completed the project, having read

Saul Bellow
Pearl S Buck
William S Burroughs
Erskine Caldwell
Truman Capote
Willa Cather
Joseph Conrad
Don DeLillo
John Dos Passos
Theodore Dreiser
William Faulkner
F Scott Fitzgerald
Joseph Heller
Ernest Hemingway
Jack Kerouac
Sinclair Lewis
Norman Mailer
Carson McCullers
Vladimir Nabokov
Flannery O'Connor
Sylvia Plath
Ayn Rand
Philip Roth
JD Salinger
George Santayana
William Saroyan
Upton Sinclair
Alexander Solzhenitsyn
John Steinbeck
Hunter S Thompson
John Updike
Kurt Vonnegut
Thornton Wilder
Thomas Wolfe
Tom Wolfe

Ok, I bent the rules on selection a little. But only a little.

What surprised me was how Southern I still am. You can take the boy out of Alabama, I suppose, but you can't take Alabama out of the boy. There was something about the Southern writers — Caldwell, Capote, Carson, Faulkner, McCullers, and 2x Wolfe —  that I could identify with strongly. I knew the mannerisms and figures of speech of their characters, and I caught their references to Southern places and things and culture. Occasionally there were brutal references with respect to African-Americans, and I remembered those too. Southern Gothic is a powerful form, I think, to examine our deepest thoughts, emotions, fears, conflicts, inadequacies, and graces.

Who was my favorite author on that list? Truman Capote, by far. Reading a chapter of his work is likely feasting at a Michelin 3-star, listening to the London Symphony Orchestra play Bach, or looking at a Renoir for hours. Capote had a vocabulary, a pace and a style, power of observation and evocation, and a clarity and efficiency and deceptive simplicity. To write like that is such an awesome talent.

Among the non-Southern writers, my nod goes to Nabokov.

What's next on my reading? Five years of non-fiction that has accrued on my reading list, and then I aspire to re-read everything by Thomas Pynchon.

Just another reason to love Japan

From prior visits to Japan I could have written 100 reasons why I love it here. Now I have 101.

On Wednesday I had a flight from Tokyo Narita to Taipei. I had not gotten much sleep for several days, and my workdays Monday and Tuesday were demanding. In other words, I was dog-tired as I waited for my flight in the JAL Sakura lounge. While there I took some items out of my computer bag. After an hour I packed up and left the lounge to board my flight.

Later in the air, when I wanted to check the agenda for the next day in Taipei, I reached for my computer bag and noticed that a zipper was open — a zipper that, apparently, I had neglected to close when I was leaving the lounge. I am a creature of habit when I fly, and items always go into the same places in my computer bag. Behind this particular zipper go my car keys. One of them was missing… one with a built-in fob.

Crap, I'm thinking, either I expend $250 and several hours to replace this key for an automobile that's too old to justify it, or I suffer inconvenience for as long as I own the car. I have a spare key that a hardware store cut for me, but of course it has no fob.

These things happen, we all know, and there's no sense in blowing them out of proportion. I tried to be kind to myself and let my error go.

Today, Saturday, I passed through Tokyo on my way home from Taipei. I walked into the same JAL lounge at Narita and inquired of my lost key. Half an hour later, a JAL employee brought it to me. It had been carefully tagged with the date, time, and place of discovery.

To those of you who have spent time in Japan, this is no surprise at all. If I had lost my key at JFK, Heathrow, or any of the world's other busiest international airports, would I have been able to get it back? I don't think so. But at Narita and elsewhere in Japan, unexpectedly good things happen.

Memories of cold fusion

In 1989 I was invited to a dinner party a few weeks after the announcement of cold fusion. By that time there were reports that the results of Fleischmann and Pons were not being reproduced in other labs — at least not without ambiguity from measurement error. I was asked what I thought about it, and I answered that I had doubts about cold fusion although perhaps Fleischmann and Pons had stumbled across some other new and noteworthy phenomenon.

Nope. As far as I can tell, no new discovery whatsoever emerged from the cold fusion episode.

In some respects the cold fusion affair was a triumph of theoretical physics over experimental physics. The theoreticians were saying all along that cold fusion was highly unlikely to be true because no widely-accepted theory of physics provided a basis for it. They were correct in retrospect. But having been trained as an engineer, I find it easier to identify with experimental physics despite the big screw-up by Fleischmann and Pons. Theoretical physicists should be careful about arbitrarily rejecting every new purported discovery merely because the observations don't fit widely-accepted theories. There's a chance that those theories might be incomplete or inaccurate, despite having been peer-reviewed and experimentally verified in the past. In other words, hubris and close-mindedness are risks for theoreticians just as much as faulty technique and the desire for glory (or riches) are risks for experimenters.

Today, though, theoreticians and experimenters are at peace because of the announcement on gravitational waves. It seems to me that each side of physics still needs the other. I sometimes have wondered whether the work on string theory has gotten too far ahead of confirming experiments, but LIGO is a reminder that experimenters, if given sufficient time and money, can eventually catch up to the theoreticians. It's a happy day when that happens. But how long will this convergence between the theoreticians and the experimenters last, before the next report of an inexplicable or theoretically inconsistent phenomenon? Hard to say.