When Sumner Redstone spun off CBS from Viacom, the logic was that Viacom would house the higher growth units while CBS would provide investors with the income that safer investments should offer.
Today’s announcement that CBS replaced former digital dean Larry Kramer with Allen & Co. dealmaker Quincy Smith suggests that CBS - whose stock has outperformed Viacom mind you - is gunning for growth itself.
This morning, we covered the coincidence or irony that Mr. Smith is hired one month after Viacom replaced Tom Freston with dealmaker Philip Dauman…
Now we’re pointing out the irony and - with all due respect - the nearsightedness of both companies saying one the one hand that “we’re looking for young promising businesses” and “the next YouTube.”
Of course, YouTube went from 0 to $1.65 billion in 18 months but was far more an anomaly than the rule. YouTube prospered through a combination of:
- luck (MySpace only refused to block the embedding of YouTube clips on Myspace when it was already too large);
- carpe diem (online video exploded)
- planning (going with Adobe Macromedia’s flash technology)
- connections (Sequoia backed it early on, meaning that it had enough funds to outrun its costs and scale)
- diplomacy (Chad Hurley being the anti-Shawn Fanning)
- and mainly… (a [mis-]management of fear vs. greed on behalf of record labels and film studios).
While ”the next Google, MySpace or YouTube” is inevitably lurking around in the nadir of the world wide web, the fact remains that YouTube would have never reached the zenith under a traditional media company. It would have been sued right off the bat and corporate turfbattles would have grounded it before you can say lawsuit.
The lesson - and challenge - for both Misters Dauman and Smith is to recognize that acquiring any promising company and housing it underneath their roof will not ensure the success thereof (i.e. Facebook anyone? Mark Z. should stick it out and succeed on his own, selling it out, for someone like him will lead to a frustrating existence). For our previous posts on Facebook click here.
They need to recognize that only a select few companies and entrepreneurs will succeed and exceed within the environment of a major, traditional media company. This is where both dealmakers might need to dust off their organizational behavior textbooks and leave the calculators in their back-pockets.
Then, and only then, will they go down in the histories of corporate dealmakers as Misters and not messers.
Digg this Blog
Share on Facebook
WatchMojo on Twitter
WatchMojo on YouTube
Add to Favorites
WatchMojo Newsletter
