StefanClaypool.com

Microsoft just spent $8.5 billion to acquire a company that eBay dropped three years ago for $2.75 billion. Skype is a company with a widely used core product that nevertheless suffers from major interface and usability problems, inconsistent call quality, and an inability to convince its (admittedly large) customer base to pay for its services. For Microsoft, which has historically struggled to generate profits in new markets, especially online, it is the biggest acquisition in history (and not coincidently, was announced on the same day as Google’s I/O keynote). But was it a smart one?

The acquisition was clearly defensive in nature. Facebook and Google were both sniffing around Skype, and with FaceTime and Google Voice threatening in the VOIP space, the bosses in Redmond thought they needed to get in the game before they got steamrolled on yet another growing market. We’ll learn eventually how long this deal was in the works, but I would guess from the amount that Microsoft overpaid, it wasn’t long.

That doesn’t mean that the necessary synergies for success don’t exist. Realistically, it’s hard to imagine Microsoft turning Skype into a money-making machine. But the value of the Skype brand and the technologies now under Redmond’s control could be huge if properly applied to Microsoft’s products. The acquisition offers Microsoft the opportunity to make its brand synonymous with video chat. It gives the company the chance to build Skype’s technologies into all of its mobile offerings and create the best Skype experience available across any platforms. Skype integration in the Kinect could be revolutionary for living room computing. It would be a huge boost for Windows Phone 7 to have complete Skype integration right out of the box, and could offer a compelling alternative to Apple’s FaceTime standard. And if Microsoft continues to maintain Skype on OS X and iOS, it gives the company a cross-platform presence that Apple can’t match. Although users aren’t going to begin paying for Skype in large numbers, the brand and technologies could be a huge asset in driving sales of other products.

Of course, for that to happen, Microsoft would have to possess the ability to manage products outside of Windows and Office – an ability its has never demonstrated (with the arguable exception of Xbox). It would have to understand the way that Skype could enhance products beyond the desktop, beyond Microsoft’s traditional customer base. It would have to understand the power of Skype’s brand as a marketing tool (and as anyone who has ever seen a Microsoft ad can tell you, marketing and Microsoft are not synonymous). And it would have to understand that its competitors are going to continue innovating in the VOIP space, and that it must now keep pace.

Microsoft has the opportunity to use this defensive transaction as an offensive weapon, but it has to understand the value of what it now holds and where it can be most effective in achieving growth in new markets. The acquisition of Skype can’t be judged as good or bad as this point, because while the cost was high, the possibilities are numerous. Unfortunately, Microsoft does not have a strong record of successfully leveraging its acquisitions to create new growth, and I am doubtful that they will buck the trend with Skype. If they do, great. If not, well, there’s always FaceTime.

Or iChat.

Or Google Voice.

I’m sitting in Reagan National Airport, waiting for a flight that will take me back to Middlebury for the third time since I graduated in May 2009. It’s different this time, though. For the last six years, Middlebury has been my only alma mater, my one and only college, and now I suddenly find myself faced with the strange reality of having to learn to love another. I almost want to apologize to Middlebury for accepting Cornell’s offer. I feel like I’m betraying the school that made me who I am.

It’s a ridiculous thought, of course. Were it not for Middlebury, I wouldn’t have been offered a spot at the Johnson School. I’m following in a long tradition of undergrads pursuing advanced degrees at other institutions. Many of my friends have already done so in their respective fields. But the first time I pull on a Cornell sweatshirt or cheer for Big Red at a hockey game or, God forbid, go on the air with the Cornell Radio Theater of Thrills & Suspense (Cr|Tots doesn’t sound right), it’s going to feel uncomfortable.

This will change over time. I will one day be able to accept that I am a part of two different academic communities, and will be able to love both in equal measure. But Middlebury will always be my first love and will always have my loyalty. Middlebury will always be home.

Anyone who has ever talked hockey with me, followed me on Twitter, or passed me on a crowded city street is almost certainly aware of the degree to which I despise the Washington Capitals. It’s the sort of irrational hatred that only sports fans truly understand, and its roots run deep within me. I have hated the Capitals since I became aware of the existence of ice hockey, and I loathe this present Capitals squad more than any that has ever plagued hockey rinks across America. It brings me no small amount of joy to see them depart the playoffs early once more, a cloud of disappointment and humiliation hanging over their heads. However, I am writing this post not to taunt them, but rather to attempt to identify what is actually wrong with the Capitals as a team and as a franchise, and to offer my perspective on how to fix it. I do this partly as a thought experiment, and partly because the hockey teams to which I would in the spirit of goodwill hope to see right their ships have already done so and won Stanley Cups in the last two years (go Pens, go ‘Hawks), but mostly because as a Cubs fan, I understand the concept of the disappointing season.

Before I go on, I’d like to explore for a moment the origins of my hatred for the Caps. Growing up in West Virginia, I was fair game to become either a Caps fan or a Pens fan. Being that it was the mid-1990s and the Pens were icing a team that featured Mario Lemieux, Ron Francis (my all-time favorite hockey player), Jaromir Jagr, and other greats, I couldn’t help but be attracted to them. Casual hockey fans might think that the Pens-Caps rivalry began with the Crosby-Ovechkin rivalry, but it actually go back years. The two met in the playoffs five out of seven years in the 90s, and with a Caps team that featured all-time goon Dale Hunter as its leader, they were as easy to hate as the Pens were to love. I lived and died with the Pens as they matched up with the Caps. My earliest hockey memory remains Pittsburgh’s Petr Nedved scoring a quadruple overtime game-winning goal in 1996, ending the longest NHL game in 60 years. I experienced triumph as the Caps experienced tragedy, and fifteen years later, little has changed.

Now Pittsburgh has won its third Stanley Cup, and Sidney Crosby has cemented his status as the NHL’s greatest superstar. Washington, on the other hand, is regarded as a group of underachievers who collapse when the pressure is on. A Pittsburgh team missing Crosby and Evgeni Malkin took three games from Tampa Bay this playoff year. Washington couldn’t take one. The talent is there for the Caps, or so it would seem. What, then, is the problem?

Some will pin the blame on Bruce Boudreau, and he deserves a lot of it. He’s a tremendously overrated coach, good at drawing up plays but terrible at motivating his players. The difference in this last series with Tampa Bay may well have been that Boudreau could not get his players believing in his system the way Tampa’s Guy Boucher – a rookie coach with a master’s degree in sports psychology – inspired the Lightening. If Boudreau is fired, no one will be surprised.

Others will point to GM George McPhee, who, to invert a phrase from the film Miracle, has signed the “best” players but not the right ones. It is McPhee’s job to put together a team that can win, and he hasn’t done that. He’s found extremely talented players that won’t grind, won’t work, and won’t win. Nick Backstrom and Alex Semin were outplayed in the playoffs by Steve Downie and Sean Bergenheim – less talented players who rose to the occasion when it was demanded of them. If the problem isn’t with the coach, it’s with the team, and that’s McPhee’s responsibility.

Still more might point to Ovechkin himself, who had the most disappointing season of his career mercifully cut short. What was wrong with Ovechkin this year? Is the responsibility of being the team’s captain weighing too heavily on him, or is the pressure of proving himself the equal of not just Crosby, but also of Jonathan Toews and Corey Perry and Steven Stamkos simply too great? In any event, Ovechkin failed to motivate his team the way a leader should, and while no one can question his effort, his teammates simply aren’t willing to follow him.

All of these criticisms are valid, but they are also incomplete. To my mind, there is ultimately one man who bears responsibility for what happened not just this year but for the last four years as well. That man is Capitals owner Ted Leonsis.

Ah, Leonsis. You rarely read a negative word about him in the sporting press. He’s a great, patient, interested owner who says and does all the right things, the media insists. But every one of the Caps’ issues starts and ends with Leonsis, and until he realizes that and adjusts his behavior accordingly, his team will continue to fail. This goes beyond the fact that Leonsis is ultimately responsible for his team’s front office. That’s obvious, and if there is a personnel deficiency there, it is his job to address it. What it boils down to is that Leonsis has defined the culture that permeates the entire organization – he is more concerned about appearing successful than he is actually winning.

If we ignore Stanley Cups – which we cannot, of course, as Stanley Cups are the definition of success in the NHL – the Caps appear to be a very successful NHL franchise. They sell out games, and their crowd, clad entirely in red, is visually intimidating. The team is filled with loud, dynamic personalities. Players and announcers alike are the stars of major advertising campaigns that last longer in the playoffs than the team itself. Their regular season record is brilliant. To all appearances, they are a successful hockey team.

But they don’t win when it counts. They can’t. Their not built to. It’s not their organizational priority. If it were, changes would have been made after last year. But they weren’t. Changes should be made after this year. Leonsis doesn’t seem ready to make them. Boudreau and McPhee’s jobs look secure. And despite Leonsis’s assurances that the Caps need to win a Cup – because “Pittsburgh already has theirs,” no less – there seems to be no movement in the right direction. Next year’s squad might look a little different, but the core of underachievers will remain the same, and if the same coach is behind the bench, we’ll see the same results, because the organization’s priorities have not changed.

To change this team, Ted Leonsis needs to demonstrate that he understands that despite the Caps’ high revenues and high exposure, losing in the playoffs is unacceptable. At this point, only one of threes things can demonstrate that change. Boudreau must be fired. If not he, them McPhee. If neither, then a major player – a Mike Green or Alex Semin- must dealt for someone who can epitomize a new team direction, the way Keith Primeau and Paul Coffey were dealt by the Red Wings in 1996 for Brendan Shanahan, who proved the final piece of Detroit’s Cup puzzle. One of these three things must happen to demonstrate a change in the team’s culture, and for the players who remain to get the message that losing is no longer acceptable. And the onus for this is on Leonsis. He is the owner. It is his team. He needs to set the direction in the way that Rocky Wirtz did for the Blackhawks and Lemieux did for the Penguins. He needs to step up.

But if he doesn’t, if he ices the same team, if he continues to be satisfied with sellout crowds but no championships, this Pens fan won’t mind. Not one bit.

Where has the time gone?

I’ve been away for a while, I know. The truth is that the last several months have been difficult. I was engaged in a relentless job search that was starting to eat away at me. I was tired. I was sick of everything I was doing and ready for a change. And most of all, my writing had ground to a halt.

But fortunately, this story has a happy ending, and a seed I planted more than half a year ago has finally born fruit. After submitting my application in October 2010 and spending four months on the waiting list, I’ve been accepted to the S.C. Johnson School of Management at Cornell University. This August, I’ll matriculate to Ithaca, New York, where I’ll begin the two-year process of earning my MBA. I feel honored to have the opportunity to join the program at such a young age, and although I’ve got a lot of work ahead of me over the next two years, I’m eager to get started.

I worked very hard to position myself for this. I took the GMAT twice, applied once beforein 2009, earned strong grades at college and performed substantial work in DC. Now I get the enjoy the payoff.

Over the next couple months, I’ll have some time to reflect as I prepare to matriculate, and one of the things I’ll be considering is what to do with this blog. I’ll update once I’ve figured that out, but suffice to say, I’m getting to the point in my life where I’m thinking a lot more about what I’m putting out for public consumption. Shocking as it may seem, I’ve learned some measure of restraint.

I’ll be updating in the future as I prepare to depart DC. Stay tuned for more.

So Ron and Vivian Schiller are out at NPR. This comes in the wake of controversial decisions – such as the firing of opinion journalist Juan Williams for having the audacity to share his opinions – and a public relations… well, let’s call it a snafu. While being videotaped by colleagues of James O’Keefe – he of the YouTube videos that brought down ACORN – Ron categorized Republicans as being “radically involved in people’s personal lives and very fundamentally Christian,” before launching a full-throated attack on the “radical, racist, Islamaphobic Tea Party people.” He followed these comments with criticisms of the “Zionist coverage” that supposedly dominates the rest of the media before explaining the obvious intellectual superiority of liberals to conservatives. Having insulted the taxpayers that unwillingly fund their operation, Ron and Vivian were, to all appearances, politely fired.

Ignoring the irony of a YouTube video bringing down the heads of one of America’s great establishment media organizations, I have trouble believing this will have a great long-term impact on the way NPR is run. NPR’s bias is not the result of the Schillers’ influence, and their departure will not result in a profound shift in ideology. The truth is that NPR will always lean left. NPR produces news coverage favorable to liberals because it knows that if elected, liberals will protect NPR funding. By the same token, liberals protect NPR funding because NPR produces coverage favorable to liberals, thus increasing their chances of being elected. It’s an obvious conflict of interest, far more so than corporate funding of private news organizations. Consumers at least have an impact on the financial success or failure of private news firms. They exert no such control over publicly-funded entities like NPR.

So while it’s refreshing to see the Schillers given the boot, it’s hard to imagine that we’ll suddenly be treated to fair and balanced news coverage. For NPR, there’s simply too much at stake to go down that road.