FOOL ON THE HILL
An Investment Opinion
It's e-mail Fools -- sinister, villainous e-mail. Disney (NYSE: DIS) chief Michael Eisner, speaking to University of Southern California graduates over the weekend, said that "if anything will bring about the downfall of a company, or maybe even a country, it is blind copies of e-mails that should never have been sent in the first place."
As Elmer Fudd would say, "Oh that wascally e-mail, I knew it was nuttin' but twouble. Hehehehehe."
Poor grads. Weary of the world and excited by its opportunities -- except for that guy seven rows down who is still hung over from the frat farewell kegger the night before -- and now, no sooner has tassel gone cross-cap, they have to fear the intangible e-mail beast.
Granted, Eisner is speaking from experience. Just before Disney released its second quarter earnings two weeks ago, Eisner e-mailed the financial results to a colleague at Disney's ABC subsidiary. The only problem was that Eisner mistyped the address and it went to a different ABC employee.
Oops. It seems as if Eisner has spent the last two decades mastering the Mouse, but not the mouse. Thankfully, by all accounts, the unintended recipient did not trade on this information. She simply wrote Eisner back to explain the Goofy snafu and it seems as if the SEC is willing to laugh it off this time. It could have been worse because the information she received was potent. It was a banner quarter as strong results at the ABC network fueled fiscal performance that came in four cents a share above analyst expectations. The stock didn't move much on the news. That nasty e-mail aimed well but fired blanks.
Renegade e-mail can be a dangerous thing. But, come to think of it, while a keyboard can spit out 36 different alphanumeric letters and numbers, a telephone keypad has just ten digits to play with. It is far easier to misdial and reach someone else than it is to nail an existing errant e-mail address. Will all fax machines now come with a disclaimer? "Dialing faxes might be hazardous to your company, maybe even your country."
I'm all for an "E-mail Responsibly" campaign. I'll bid loud and high at the next silent auction to benefit the "Don't Drink and Type" organization. But I reckon I'd also back a stupidity tax if it came coated in a nifty catch-phrase.
You see, I follow Disney as part of our new Motley Fool Research. There is a lot to like about Disney right now. But I think the problem is that, this time, Eisner has become a victim of his own otherwise worthy micromanaging. Eisner lives by the anecdote. He often manages that way, too. While numbers show that four million homes now stock a DVD player, he claims he wasn't wowed at the possibilities of Disney's lush film library on the digital format until he took a stroll through an electronics superstore.
He assumes that what he sees we see, or in a more lucrative light, we will eventually see. So if e-mail flashes its pearly whites and goes in for the kill in his world, we're all dead meat. The problem is that it is also too easy, in a movie mogul mindset, to cast a revolutionary breakthrough in communication in the role of a scapegoat.
"I have noticed of late that the intensity of emotions inside our competitive company is higher than usual," Eisner told the grads. "I am convinced this is because of e-mail. Every fight that goes on seems to start with a misunderstanding over an e-mail."
It all makes perfect sense now. The company announced that it will shave $500 million in annual expenses in two years. Budget cuts roughing up morale? No. Blame e-mail. Movie chief Joe Roth bolts facing the prospects of less project funding? No. Blame e-mail. Imagineers flee when the company moves away from new E-ticket attractions in the hopes that fireworks and parades will keep the crowds coming back to its theme parks? Naughty, naughty e-mail. Top shelf executives like Jeffrey Katzenberg and Judson Green fly the coop blaming Eisner's power-hungry ways? Jealously. It's e-mail at play.
How can the leader of a company that is soaring high on How to Be a Millionaire get tripped up by the $100 question? At the same time that Eisner was mistyping, Time Warner (NYSE: TWX) was readying to block ABC from 40 hours of programming in select markets during the May Sweeps. Communication might have helped divert the situation. Maybe. Possibly. Lifeline? E-mail.
When he had to admit saying that he hated that "little midget" Katzenberg as the company lost ground in its case against the big "K" in Dreamworks SKG demanding royalties due, maybe Eisner could have measured his remarks, mapped out more kindly, in an e-mail.
So why blame e-mail? It would have made much more sense if he had taken to the podium and concluded that "you can take e-mail, jumble the letters around, and get I Lame." Because, you know, there have been times in the past when an e-mail could have saved the company a bloody scrape or two -- maybe even the country.
TMFEdible on the Discussion Boards