Google v. Microsoft

google-v-microsoft.jpgJeff Matthews ran this insightful post recently summing up the business competition between Google and Microsoft:

Now, the last quarter I saw, Microsoft had 71,000 employees, whose efforts generated about $3.5 billion in operating income.
Meanwhile, Googleís ìrandomî collection of not quite 11,000 employees generated $1 billion in operating income in the same quarter.
Sharp-eyed readers will have already done the math, which is this: Microsoft generated only slightly more than three times the profit of Google despite having almost seven times as many employees as Googleís random collection of hipster do-good engineers.
That lack of productivity does not speak well of Ballmerís aging time-card-punchers who, you might recall, now require dinners-to-go from Wolfgang Puck to keep them from seeking greener pastures than Redmond. (See ìMicrosoft Brings BackÖThe Comfy Chairî from May 31, 2006.)
Yet Ballmer retains complete confidence in his demonstrably less productive crew’s ability to turn back the encroaching tideóor at least he expresses such confidenceódespite all evidence to the contrary . . .

Read the entire post. So, which horse are you betting on?

It’s time for The Masters

augusta_national_golf2.jpgThe venerable Masters Golf Tournament begins this morning at that golfing Zimbabwe in Augusta, Georgia. Golf Digest’s John Hawkins does his usual fine job of handicapping the field and, somewhat surprisingly, doesn’t think that Tiger Woods is putting well enough at the moment to be a clear favorite for the tournament.
There have already been some interesting comments this week that reflect that the competitive juices are already peaking. Defending champion Phil Mickelson had the following response to a question during his press interview:

Q. Sticking with the green jacket theme, what did it feel like two years ago to help [Tiger Woods] put on the [The Masters green] jacket?
MICKELSON: I don’t know, but I remember what it felt like last year when he put it on me. (Laughter).

Meanwhile, Arnold Palmer will kick off the tournament for the first time by hitting the ceremonial first tee shot that Ken Venturi, the late Byron Nelson, Gene Sarazan and Sam Snead used to handle for many years. Despite the fact that Arnie is no longer playing competitively, he still has a good bit of feisty competitiveness in him. The following was his response to questions during his press interview on Tuesday when asked about rival Gary Player’s quest to play in more Masters tournaments than Palmer:

Q. Gary Player is going to tie your record this week for most Masters played. He’s talking about breaking it next year. What are your thoughts just about that?
PALMER: Well, if he isn’t embarrassed, I won’t be embarrassed for him. (Laughter). [. . .]
Q. He’s in pretty good shape.
PALMER: What does that mean? Are you saying I’m not in pretty good shape?
Q. Maybe he has like 30 more years left or so.
PALMER: Who gives a shit? (Laughter). If you can’t win, it doesn’t matter. That’s s-h-i-t. (Laughter). Hey, he’s my friend and I love him. I can also have fun with him, too.

And asked whether he would he do any ìarm-twistingî in the future to get Jack Nicklaus, who won a record six Masters, and Gary Player, a three-time winner, to hit future ceremonial tee shots in what would be a nostalgic reunion of what was once golfís Big Three?

ìTo let them join me,î Arnie replied with a chuckle, ìor to tell them to stay away.î

Which brings us to the following email that my brother Mike passed along to me that was written by a fellow who viewed an advance screening of a a very special television show that CBS will air before the final round of the tournament on Easter Sunday:

This Masters Sunday will be special. I know this because it’s going to begin with Arnold Palmer winning the Masters. The 1960 Masters, that is. “I wanted two generations to see what the magic was all about,” said CBS golf commentator [and former Houstonian] Jim Nantz, the man who made this resurrection possible.
We’ll be able to re-live the ’60 Masters, one of the more exciting finishes in history, because Nantz pried the original broadcast footage loose from the Augusta National vault, went to the incredible time and expense of having it colorized, and turned it into a one-hour show that CBS will air as the lead-in to its Sunday final-round Masters coverage.
This is footage that has never been aired since its original broadcast. The best part is, it’s not presented in a highlight package with talking heads. It’s shown as if it was a live telecast, featuring host Jim McKay (who left CBS later to join some upstart show known as ABC’s Wide World of Sports — wonder what ever became of him?) with coverage of the last four holes.
I watched a screening of the finished product and offer this advice: Don’t miss it. The 1960 Masters had it all. A classic Arnold Palmer charge and Ken Venturi’s agony of defeat. The old guard — Hogan and Snead — and a young gun — some amateur named Nicklaus. There was a minor rules controversy. There was an innovative new scoring system for television invented by CBS director Frank Chirkinian. And there was the great man himself, Bobby Jones, the legendary founder of Augusta National and the Masters Tournament, holding court as the host of cabin festivities.
This show is a slice of golf history and a classic piece of broadcast history. If you hate goose bumps or nostalgia, don’t watch. This show, a labor of love for Nantz, is one “Wow!” after another. Here’s a short list of reasons to watch:

Continue reading

The sad case of Dr. William Hurwitz

HurwitzTakesTheStand04.jpgFor you doctors out there who believe that what happened to Jeff Skilling could never happen to you, take a moment to read the NY Times’ John Tierney’s chilling opening blog post on the re-trial of Dr. William Hurwitz, the Virginia doctor who is a sacrificial lamb for America’s voracious drug prohibition policy. Dr. Hurwitz is being prosecuted on drug trafficking charges for prescribing pain medications that his patients allegedly abused or sold without his knowledge:

Jonathan Fahey, one of the prosecutors in federal court in Alexandria, Va., told the jurors in his opening statement that Dr. Hurwitz was a drug trafficker ó part of a drug-trafficking conspiracy, in fact ó because he prescribed large quantities of OxyContin and other pills while ignoring clear ìred flagsî that his patients were misusing and reselling the pills. The prosecutor said that Dr. Hurwitizís prescribing was ìwithout a legitimate medical purposeî and ìin its wake it left destruction, devastation and death.î [. . .]
[Defense attorney Richard] Sauber used his opening statement to tell the jury over and over that the case boiled down to one question: Was Dr. Hurwitz a doctor or a drug dealer? Calling him a ìpassionate advocate for patients who had been unfairly treated,î Mr. Sauber talked about Dr. Hurwitzís work in the Peace Corps and in Veterans Administration hospitals, and his belief that too many patients were in pain because doctors were afraid to give them proper dosages of opioids. Mr. Sauber also promised to do something that the defense didnít effectively do in the first trial: use expert testimony to show that the dosages prescribed by Dr. Hurwitz were within the bounds of legitimate medicine.

The Hurwitz case is an appalling reminder of how the Drug Enforcement Agency has pursued a perverse agenda in its pursuit of pain doctors. During Hurwitz’s first trial, the DEA actually changed their own guidelines during the trial and removed them from its website because the defense was going to show that Hurwitz prescribed by those guidelines. Meanwhile, DEA head Karen Tandy publicly stated that Hurwitz deserved 25 years in the slammer because he ìwas no different from a cocaine or heroin dealer peddling poison on the street corner.î
Sound familiar?

Rationing health care

rationing.jpgCharles Wheelan, the Naked Economist, lucidly addresses the key issue in regard to the U.S. health care finance system:

Here’s a question to ask any presidential candidate from either political party: How do you plan to ration health care?
If the answer is “I won’t,” then he or she doesn’t understand health care. Or, more likely, they understand health care and aren’t in any mood to talk straight about it.
“Rationing” has a bad connotation, which is odd, because we ration just about everything. In fact, that’s what capitalism does best.
Not everyone gets an S-Class Mercedes-Benz or courtside tickets to the NBA playoffs or roses on Valentine’s Day. Who does? People who are willing to pay for them.
We call that a market, which is just rationing with a more attractive name. Everything worth having is scarce to some degree, so we use prices to figure out who gets what.
Health care is similar to German cars and basketball tickets — not everyone gets everything they want. But health care is obviously different in a crucial respect: People who don’t get what they want may become sick, stay sick, or even die. Unlike roses or Lakers tickets, health care is literally a life-and-death matter.
As a result, the most fundamental policy question related to health care is who gets what kind of care — or, put another way, how we choose to ration resources. Forget all the other complications, like aging baby boomers, malpractice lawyers, greedy drug companies, shockingly fat Americans, insurance forms in triplicate, and so on.
Do those things help to explain why our system is expensive and getting more so? Yes. But for anyone looking to control costs (e.g., a presidential candidate) those factors pale in comparison to the fundamental health care design question: Who gets what care and why? [. . .]
And therein lies the fundamental inefficiency of the American system. We have no good mechanism for saying “no” to expensive technologies and treatments that provide marginal benefits. If you’re a patient, that sounds terrific; your doctors will spare no expense. If you’re a business trying to keep up with skyrocketing health care costs, or a family trying to pay for benefits, it’s not. And, of course, as insurance costs go up, fewer people will have access to that kind of coverage.
At the same time, we don’t do a very good job of saying “yes” to treatments for the uninsured that would profoundly improve their health.
The combination of those two factors goes a long way toward explaining why the U.S. spends a ton of money on health care (15 percent of the GDP, compared to 8 percent for Britain and Japan and 10.5 percent for France) and gets relatively mediocre outcomes. . . .
In short, the rest of the industrialized world does a better job of rationing health care than we do.
Which brings me back to my original point. Every presidential candidate is going to talk about controlling health care costs. Most are going to talk about expanding coverage, too. Those goals are impossible unless we can design a system that says “yes” to the most cost-effective care — even very expensive treatments, provided they have corresponding benefits — and “no” to treatments with benefits that are too small to justify their costs. In other words, rationing.

Read the entire article. Wheelan doesn’t propose any solutions, but he does an excellent job of framing the issue. Stated another way, to what extent is American society willing to underwrite health care costs that individual citizens cannot afford — or are unwilling — to pay?

Visiting the SHO

sho_logo2.jpgThe Shell Houston Open concluded on Sunday with the top-rated player — Adam Scott (3rd in the World Rankings) — winning the tournament (final leaderboard here) by making a par on the 72nd hole even after pulling his drive into the water. The Chronicle’s Steve Campbell’s postscript on the tournament is here, while earlier posts on the tournament are here.
After seeing how good the Tournament Course at Redstone looked on television last Thursday afternoon, my buddy Jerry Sagehorn and I visited Redstone on Friday morning to check out the tournament and the course. In so doing, we were able to get a close-up look of what ails the local tournament and why it is unlikely ever to be more than a second tier tournament on the PGA Tour (i.e., behind the majors and the first tier tournaments such as the Players and the Memorial).
Although Redstone is impressive in several respects, the facility is located next to a housing development far away from any of the Houston area’s large entertainment or commercial centers. Unlike The Woodlands — which is one of the most beautiful areas of Houston and has luxury hotels, shops, restaurants and one of the best entertainment facilities in the Houston area to offer — the area around Redstone is rather bland and has nominal commercial activity. Accordingly, if you go the SHO at Redstone, you go for the golf only and then leave. There is no ambiance to the area around the course.
But the area around Augusta National is no great shakes, either. So, if the golf course is appealing, then the best golfers might overlook the lack of ambiance and come to the tournament, anyway. Unfortunately, the Tournament Course is not — and likely will never be considered — a great golf course. That is not to suggest that the course does not have some interesting holes. The 18th hole in particular proved to be a challenging finishing hole. Moreover, the spectator viewing lines around the course are really quite good.
However, as the map below denotes, the course is really split into three separate courses. First, the 1st and 18th holes are next to each other and form a long tarmac leading to the other two parts of the course on the other side of a large and unsightly drainage ditch. Then, the 2nd through 9th holes and the 10th through 17th holes form separate loops that are not easily reached from other parts of the course. Adding to the disjointed nature of the course is that the front nine does not end at the clubhouse and the back nine does not start from the clubhouse.
Shell%20Houston%20Open%20Map.gif
Thus, the players and spectators are required to walk at least a quarter mile from the 1st green to the 2nd tee (this year, the players and caddies got a ride in a golf cart). Similarly, between the 9th green and the 10th tee, there is another long walk of at least 300 yards. And then, after trudging around the first two parts of the course, the players, caddies and spectators must trek another couple hundred yards from the 17th green to the 18th tee.
Thus, despite having some entertaining holes, good sight lines and being in top condition, the Tournament Course at Redstone is simply not an endearing golf course. That was reflected by the crowd on Friday morning, which was a fraction of the size that used to attend the tournament on Friday mornings when the tournament was played at the TPC in The Woodlands. Although the rain on Saturday morning certainly held attendance down on that day, the crowds on the weekend also did not appear on television to be as large as those that used to attend the tournament in The Woodlands. Perhaps reflecting the lower attendance, neither the HGA nor the Chronicle broadly publishes attendance figures as they used to do when the tournament was played in The Woodlands.
So, what can the SHO do to improve the experience for the players and fans? There has been some talk that Redstone is considering building a Houstonian-type resort facility on the property to attract the better golfers such as the Four Seasons Resort does in Dallas, but my sense is that the lack of surrounding amenities makes such a venture about as likely as redevelopment of the Astrodome into a resort hotel.
Can the tournament attract more than two of the top ten, eight of the top 30, and 20 of the top 60 players in the World Rankings? If Shell or Redstone pursues lucrative sponsorship deals with some of the top players in the same manner as Buick has done with Tiger Woods, then maybe those players would play the SHO in the same manner that Woods plays several Buick-sponsored tournaments. But those deals are costly and risky (some players do not stay on top for long), so I doubt that will happen. Finally, the HGA is going to have to address the knotty problem of how to move spectators and players around the long stretches of the course, which — unless resolved — is likely going to deter spectators from making return visits to the tournament.
Thus, my sense is that the SHO is firmly entrenched as a second tier PGA Tour event even after the HGA’s prodigious investment with Redstone. That’s unfortunate because Houston is a golf hotbed and has a rich golfing tradition, and the HGA is a fine charitable organization that had laid a foundation of success for the tournament over a 20 year period in The Woodands. Shell has signed on as the title sponsor of the tournament through 2012, so the next several Houston Opens are going to be key ones for the HGA. Come time to negotiate an extension of that sponsorship arrangement, will Shell have better things to do with its sponsorship dollars than to support an afterthought on the PGA Tour?

Lessons of the Heart

heart%20surgery3.jpgFollowing up on recent posts here and here, don’t miss this John E. Calfee/American.com op-ed on how recent research into heart disease treatments has not only changed medicine, but also basic science research:

How do we know where heart attacks come from? The answer lies in feedback from pharmaceutical clinical trials to basic research. Long before the stent trials began to upset received wisdom, massive trials of heart drugs had first validated previously controversial hypotheses and then upset the next generation of hypotheses. Eventually, these trials pushed basic research in unexpected directions. [. . .]
So there is a bit more to this weekís news about stents and heart attacks than meets the eye or is described in the media. We are witnessing another episode in the remarkable story of feedback from drug and device development to basic science. And we can expect more drug-tools to wreak more havoc in scientific understanding of human biology.

Read the entire piece, which is an excellent summary on how clinical research spurs development of better drugs, superior treatment and even better-focused research. Check out the new design of American.com, which has quickly developed into one of the most interesting and insightful on-line magazines.

Junk Loans

money.jpgFelix Salmon, who authors a very good blog about finance and economics, makes the following observation about the dramatic increase in the amount of leveraged loans held by hedge funds:

[J]unk bonds are rapidly becoming a thing of the past. Today, it’s all about junk loans ñ illiquid instruments which hedge-funds hedge in the equally opaque and non-public CDS (credit default swaps) market. The good news, insofar as there is any, is that if and when a lot of these loans go sour, the impact on the banking system will be much lower than the volume of loans would imply. But the bad news is that ever-larger chunks of corporate balance sheets are now completely unregulated.

I’m not sure I follow the reasoning of Salmon’s final sentence. Privately-owned hedge funds, whose investors are wealthy folks, own a large amount of leveraged loans. That ownership has reduced the risk of loss of lending institutions, which generally do not have the profit margins to take on that sort of risk. Thus, the financing market has developed to shift the risk of these loans to those who can best afford to take the risk, which is a good thing. That large portions of corporate balance sheets are unregulated is one of the reasons that such a market developed in the first place.

A big problem with the Stros

Garner%20040307.jpgOkay, so Stros skipper Phil Garner — who we already know is not a very good manager — pulls yet another bonehead move and allows besieged reliever Brad Lidge to blow a fine Roy O Opening Day performance by giving up a two-out, top of the 9th inning tater. And that move letting Ausmus bat second while trying to generate a rally in the bottom of the 10th was real smooth, too.
But even more importantly, when did it become acceptable to bat a guy with the two worst OBA seasons in club history at the top of the order in front of Lance Berkman and Carlos Lee, not to mention Morgan Ensberg (.396 OBA in 2006), Chris Burke (.347), and Luke Scott (.426)?
As I noted in my season preview yesterday, Garner’s bullheadedness is going to hurt the Stros this season. Little did I know that it would only take one game to prove it.

“A golfing Zimbabwe?”

augusta_national_golf.jpgThe Masters Golf Tournament gets underway on Thursday and the fine Masters website is streaming video of the practice range so that we can watch the pros hit the rock pile in preparation for the tournament. And the NY Times chimes in with this profile on new Augusta National Golf Club chairman Billy Payne. Finally, Golf Digest has its typically thorough preview of the tournament here.
But the prestige of The Masters is simply a signal for Scottish golf writer John Huggan to tweak the controversial changes that have been made to the hallowed course over the past several years:

In what is nothing less than a direct and disrespectful contravention of [Augusta National course designer Alistar] Mackenzie’s and [Augusta National founder Bobby] Jones’ original and delightful philosophy, the Augusta National that will this week host the world’s best golfers resembles nothing more than just another one-dimensional country club. Aerial photographs published in the April issue of Golf Digest graphically portray the tragedy that is the modern Augusta National. In place of what were once spacious and tightly cut fairways, rough has been grown and trees have been planted. What was once the most democratic of courses — one that allowed every standard of player to figure out his own way of playing each hole — has become a golfing Zimbabwe, a misguided dictatorship that has all but eliminated freedom of thought and expression.

Huggan is just getting warmed up, so read the entire article. Huggan better watch it or he will end up at the same place as CBS golf announcer Gary McCord during Master’s week.

James Hamilton on Saudi oil production

oil_well23.jpgClear Thinkers favorite James Hamilton is thinking about Saudi Arabia’s oil production and that always makes for interesting reading:

Saudi oil production is now down more than 10% from its peak level in 2005; . . . this decline in production has followed an erratic pattern, beginning in October 2005 when oil was selling for $62 and continuing through July 2006 when oil briefly touched $75, making it difficult to see these cutbacks as an effort to stabilize oil prices; . . . the production decline coincided with a doubling in the number of oil rigs employed in Saudi Arabia since 2004 and tripling since 1999.

Has Saudi oil production peaked? Read the entire post. Is Matt Simmons right after all?