Summertime is when a lot of us catch up on our recreational reading.  I use it as a time to get caught up on my pile of business publications that accumulate during the rest of the year.  In reading each article, I find myself looking for the takeaway or that nugget of wisdom that will allow me to better serve our client base. The reading pile is proving to be a little thin this summer as most of the articles focus on corporate governance and Sarbanes-Oxley.  Below is a brief overview of a few other topics of interest and some of the lessons that they teach us.
 
SCO’s legal actions to protect UNIX.   One interesting facet of this story is that Microsoft has recently become a major licensee of SCO’s technology, effectively giving SCO a chunk of cash to fund its litigation war chest.  Everyone knows that Microsoft is threatened by LINUX and it looks like that they have figured a creative way to let someone else assist in maintaining their market dominance.  Lesson Learned: Sometimes a potential competitor can be turned into an ally.
 
MCI re-directing telephone calls to avoid paying fees.  AT&T and Verizon have accused MCI of committing billing fraud as a way to slow MCI’s emergence from bankruptcy.  While their statements point the finger at MCI for questionable behavior, they need to look closer at their own actions.  A few years ago, Verizon was accused of similar activities including wrongfully extending contracts and charging for unanswered calls, non-conversation time, toll-free calls and local calls.  AT&T, who has been put in charge of enforcing the national do-not-call list, has the highest number of complaints about telemarketing techniques according to the FCC.  Lesson learned: Win your customers in the marketplace, not in the courts or in the press.  This approach may backfire on you.  My prediction is that before this is over, both AT&T and Verizon will have many articles written about their playing similar billing games as well as other questionable activities. 
 
Is off shore outsourcing good for our economy?  Some folks call it un-American that we are moving a lot of white-collar jobs off shore to countries like India with lower labor rates.  We need to remember that one of the keys to the economic strength of the US is our ability to adapt to a changing marketplace environment.  Our flexibility in quickly sourcing lower labor rates makes us more competitive.  It also leaves better, higher-paying jobs for American employees.  Lets not forget that in the 1980’s manufacturing jobs started going overseas and we survived, partially due to the growth within the information technology space.   Lesson Learned: Change is both inevitable and necessary for survival.  Don’t let change intimidate you.  Instead view it as an opportunity to channel resources to identify and create new value. 
 
Internet Taxes.  With the recent fall of the stock price of Barry Diller’s InteractiveCorp as questions about accounting for local taxes emerged, I can only wonder about what Diller’s team was thinking and where did they get their tax advice?  When the seller and buyer are located in the same state, you are legally obligated to pay state sales tax if applicable.  This is the case even if you are transacting the business over the Internet.  The estimated $10 million of deficient tax payments impacted InteractiveCorp’s market cap to the tune approximately $4 billion. Lessons learned:  If you are in the game, you have to know the rules.  If you play by the rules and you win, the success is that much sweeter and there is little risk that the victory will be taken away.
 
Here’s looking forward to an Indian summer where maybe I can sneak in a novel or two.
 
Howard Samuels is a Managing Director of The Mercator Group. For more information, contact Howard at hsamuels@mgboston.com