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Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: KailuaBoy who wrote (29416)	11/14/2001 4:10:27 PM
From: gpowell	Respond to of 29970

Which board members didn't have a conflict of interest? Last time I checked the board was comprised of AT&T employees, Cox employees, Comcast employees, ATHM employees, and Will Hearst. Which ones are you referencing? I may be wrong, but I believe it was TJ, Bell, Goldman, Hearst, and perhaps Doerr. I didn't mention compensation. I said that it affects the business. In so far as it affects the business, it affects the shareholders and in that case, the board is required to act in the best interest of the shareholders...the ATHM shareholders. I was reacting to this statement: The exclusivity agreements, wether right or wrong, were amended in a deal between Cox, Comcast and AT&T that accrued no benefit to ATHM shareholders. I interpreted this to mean that you felt that shareholders should have been compensated at the time of the ownership change. Again, why would it increase effectiveness? Let’s see if I can back away from my statement gracefully… Seriously, the essence of the business process is balancing strengths and weakness against potential or actual opportunities and threats. It’s a complex process and I state as an axiom, that having a constant unifying reference point, embodied in a clear purpose, mission, and vision, ensure that changes, which are inevitably needed to survive in a complex environment, align with and complement the goals of the company. In other words with a common unifying purpose, order can emerge from chaos. Management’s effectiveness is largely determined by its ability to create and maintain an environment where the company can evolve around unifying purpose. Therefore, to the extent that a unified board translates to a common purpose then management effectiveness is increased. However I also believe diversity of opinion is an important factor in success (common purpose doesn’t imply uniformity of opinion), consequently I can easily imagine a unified self-stroking board myopically holding on to a failing strategy too long. This is why my original statement was “Any benefit comes from the actual or perceived* increase in management effectiveness. As I recall, initially we all thought the ownership changes cleared the way to a more focused strategy. “* This is the issue. Was AT&T incredibly stupid, calculated in their intent to drive the company into BK, or a combination of both? I believe it was a combination. Stupid first followed by a realization that it would be better to own the service that ATHM was providing. If what I believe is true, AT&T began knowingly making decisions that adversely affected ATHM at that point. I followed this company closely and, I believe, objectively. Bankruptcy was a remote, almost unthinkable, possibility until the media market collapsed. The financing deal worked out by McEachen sealed the issue. Once Bankruptcy was inevitable, I agree that AT&T probably decided to choose the course of action that most benefited its shareholders. But I disagree that AT&T orchestrated ATHM’s bankruptcy, although some of their decisions may have helped produce that outcome. No manager would do what you’re suggesting. Please explain how AT&T can send an AT&T employee to ATHM as "interim CEO", have him install his people at the top of every organization in "interim positions", spend all ATHM cash on network upgrades, then leave the ATHM CFO to explain how he was off by $30 million dollars in his estimate of the burn rate for 90 days. I understand the network troubles ATHM was having but what Eslambolchi did is not excusable. 30 million dollars in unexpected capital equipment upgrades is certainly a cause for concern. I’d question how the infrastructure fell behind the growth curve. In any case, I doubt anyone knew that this would send the company into bankruptcy, in fact I doubt that it did. Wasn't ATHM operating under the assumption that the media market would continue to generate about 50% of the revenue? Further, wasn't the money losing international operation due for spin out? Wasn't the collapse of the capital markets and the collapse of the media market primarily responsible for the deterioration of ATHM’s cash position? Tell me how long Bell would have lasted if you were the sole ATHM board member. Would you have let a man who continually proved to be dumb as a bag of nails run the company if it were your company? I doubt it. Bell never would have been appointed. AT&T bought ATHM for $3 billion. They partially offset the sale price by using ATHM cash to fund upgrades until the cash ran out. That scenario doesn’t pass the sniff test. Why not just build out new infrastructure, as did Shaw and then dump ATHM? You're arguing that the change of ownership and ATHM's demise didn't happen at the same time so they're not related. I don't follow that logic. No. I said the mere fact of an ownership change was not a factor – referencing back to my assumption that you felt shareholders should have been compensated at that point. I'm arguing that the change in ownership set the stage for the board to allow bad decisions and monumentally inept management to be tolerated to the point that it was beyond laughable. Reference the attempted Pogo.com acquisition. I agree this is how it turned out. I blame fool management and a board of directors that first allowed the fools to continue I agree. and then accelerated spending until the company went under so they could purchase what was left for peanuts. I see no credible evidence that this was planned.