David Foster

Dear Google:

It’s been over a year since you acquired the Blogger product line. I use blogger at Photon Courier (or try to) and it’s becoming increasingly difficult due to very frequent performance problems. Trying to use Blogger Comments at other weblogs is also an often-painful experience.

Presumably, you acquired Blogger based on some theory about how you were going to make money with it. How do you think you are going to do this when you are alienating your customer franchise, or at least the most serious part of it?

Integrating acquisitions is hard, but I would think this one would fall on the relatively “easy” end of the scale. What happens when you try to do a really difficult one? This experience does not fill me with confidence as to your abilities in the acquisition arena….

There’s been a lot of discussion about a savings deficit in the United States. But recently, there have been several articles suggesting that the US…indeed, the entire world…now has a surplus of capital, and that this surplus is pulling down rates of return on investment. (In actuality, supply and demand of capital will always be equal, of course: the question is at what price level…in terms of returns on investment…the supply and demand curves will intersect.)

Floyd Norris makes the capital-surplus argument in The New York Times (3/25). As evidence, he makes these subsidiary arguments:

1)There are low rates of return on debt instruments, and long-term rates have proven to be “sticky”
2)Stock prices are high relative to underlying valuations
3)Countries defaulting on debt have been able to get away with it (he specifically mentions Argentina) implying reduced relative power on the part of owners of capital
4)Increasing management compensation levels, which he believes make the same point about relative power (in this case, of managers vs owners of capital)

These seem like good arguments, except for the last, which feels like a stretch. I’d also observe that many corporations are carrying considerable amounts of cash on their balance sheets, which they’d be unlikely to do if they were seeing lots of compelling opportunities for investment.

But on the other hand….

Read more