Yesterday I posted about Microsoft’s global reputation at the top of the heap in two of the latest corporate reputation surveys–Edelman and Cision. I commented that Microsoft’s stunning improvement, compared to their serious trashing about five years ago–had more to do with Google’s ascendance than anything else. I suggested that it was the technical literati who understood how serious the Google threat was and this threat rapidly removed the monopoly fears and hatred of the software giant’s power, which resulted in rapidly improved reputation scores. Now Microsoft is trying to buy Yahoo–perhaps the only serious (somewhat) challenger to Google’s hegemony over search and ad related search. Story in NYTimes.
So, what do you think of that? Do Microsoft and Yahoo together make an overwhelming force–so much that Google is now in trouble and that therefore the shift of reputation follows? I doubt it. And that in itself is a credit to Google’s incredible position which is partly related to the founder’s vision of “organizing the world’s information.”
What worries me about Microsoft (as a longtime shareholder I might add) is that the vision was crystal clear before. I even had Bill himself explain it to me on a flight (in coach) to San Jose in 1983. It was to bring the power of computing to the masses. How does the Yahoo purchase help accomplish this mission? Not real clear to me. In fact, if I look at who is accomplishing the Microsoft mission more than Microsoft I would have to say Apple. And with the iphone perhaps even more than with the Macs.
Last night I watched the PBS Frontline documentary “The Tank Man.” It highlighted the story of the Communist government’s brutal ending of the pro-democracy protests in Beijing in 1989, focusing on the gripping image of the lone young man holding up an entire column of tanks. A sub-story within this documentary was the role that Google, Yahoo, Cisco and Microsoft are playing in helping the Chinese government work to limit the access to information of its people–including about the events in Tiananmen Square. More than that, Cisco and Yahoo in particular were accused of actually assisting the Chinese government in tracking down those who violate China’s rules about dissent and free flow of information.
The footage included testimony from the four companies at Congressional hearings. Cisco stands accused of selling equipment and systems used by the police force to track and prosecute enemies of the state. Yahoo turned over information to the government about the activities of one of its customers that resulted in his arrest and 10 year prison sentence.
When you look at it as presented by the Frontline producers and even more so in my brief explanation, it is chilling and creates an immediate visceral reaction of horror and anger against these companies. And I will tell you that when I saw Cisco’s written statement (they refused to participate in the documentary) I was reminded of I.G Farben. I am working on a book about an American fighter pilot sent to Buchenwald and the I. G. Farben plant was right next to this horrid concentration camp making full use of the slave labor-to-death of the inmates. So many prominent German companies played key roles in supporting a brutal regime including participating in its brutality. Cisco’s explanation and Yahoo’s as well focused on the need to follow the laws of each of the countries they operate in.
They are right of course. But here is one great challenge of globalization. To not participate in the massive opportunity that is China is to relinquish a position of leadership in global business. To participate, means that you have to violate the principles, laws and core values of the customers and regulators who mean the most to you. To say these companies are between a rock and a hard place is understating it.
This, I would consider a smoldering crisis. It could erupt at any time into a full blown flame. As it is, it exists in the blog world and once in a while it emerges into the mainstream media such as PBS. It would not take much for it to burst to a critical reputation crisis for these firms–and based on what was presented Cisco is most at risk. An entrepreneurial activist, the focused engagement of the Freedom Frontier folks, a politician looking for a good cause to run on, a high placed reporter seeing this as a Pulitzer prize opportunity–all very possible and I would guess worrisome to the communication leaders of these organizations.
This challenge also highlights the issues of managing a smoldering crisis. Direct, open conversation and engagement with those (such as me) who are deeply concerned about this and the role they are playing is vitally important. But how do you do that without fanning the flames and inadvertently help the issue burst from the smoke into a full blown crisis?
It will be interesting to watch.