Monday, September 27, 2010

Another score for illegal behavior

What the hell is going on, we might ask. Headline in the San Jose Merc this time said "Valley's Titans Conspired". Citing a Justice Department investigation and findings, six companies -- Google, Apple, Intel and three smaller fry -- Intuit, Adobe, and Pixar -- agreed to quit their practice, now five years old, of colluding to 'not poach' each others' employees. Maybe that's why HP didn't pursue the suit against Hurd any longer -- if the Justice Department now is looking into restraint of employee 'freedom'...

These companies have been more respectable, outwardly, than many in the rough-and-tumble Valley. These are not (except for Apple) companies that got caught in the gigantic stock option 'backdating' fraud. These are the darlings in general -- Google far outpacing Yahoo to lead in Search and now perhaps in Android phones; Intel far and away the leader in microprocessor deliveries and now ramping up for fantastic n-way 'cloud computing'; Apple held in extremely high regard for pinpoint marketing savvy with the i-Pod, i-Phone and i-Pad hits in succession. Intuit is the world leader (and there is really no second place) for Home and Small business Accounting software; Adobe is the master of multimedia delivery security; Pixar -- my gawd, the greatest animated film company of all time (well, maybe Disney..., but Pixar does such complex wonderful stuff).

So what happened? Well, it seems that these leaders are all pretty good friends. The story implicated Eric Schmidt (CEO Google), Steve Jobs (CEO Apple), Bill Campbell (Chairman Intuit) and Paul Otellini (CEO Intel) directly. Otellini and Campbell are on Schmidt's Board (as is Stanford Prexy John Hennessy), Campbell was on Jobs' staff for years and is a close friend; Schmidt was on Apple's Board until the Justice Dept invited him to step down a year ago. Jobs of course was the key owner of Pixar before selling it to Disney (and now he is Disney's largest shareholder). Adobe was coerced by Apple, in order to have its software included on the new i-Pad. Hard to imagine that these folk all had cocktails at a barbeque one night, and someone said, "hey, I've got an idea..." but who knows?

What is clear is that, once again, the leadership in the Valley looks tawdry, cheap, and illegal. Classically, Intel issued the statement that it perennially has ready: "we've agreed not to enter into agreements (like this anymore). Intel does not believe its actions violated the law, nor does the company agree with the allegations." Unstated, but as we've seen in a multitude of other actions involving Intel non-violations, they'll keep a little extra cash around to pay the fine.

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