The Six Billion Dollar Email

Just 11 words in a mountain of data may ultimately be the smoking gun.

If there’s a moral to this cautionary tale, it’s this: know what’s inside those boxes you’re handing over.

The background is a multi-billion-dollar lawsuit between Oracle and Google (go ahead and call it the Battle of Silicon Valley), in which Oracle alleges the illicit use of its Java programming platform in Google’s Android operating system.

It started off as one might expect; Google denied wrongdoing, while (reportedly) preparing to pay a token settlement of a few million dollars. Then sometime last year came the discovery phase, where Google responded to Oracle’s subpoenas with a good old fashioned data-dump: truckloads of documents meant to overwhelm and confuse the other side’s lawyers.

But somewhere within those truckloads was a single damning email. It was from a Google engineer to Andy Rubin, head of the Android division. It said (paraphrasing here), “You know, we really ought to buy a license for Java.”

So much for settlement. The trial is now underway; its conclusion is by no means foregone, but legal observers say Google isn’t looking so good. Damages were initially estimated at $6.1 billion, but might be negotiated down to around a billion. That’s still enough of a hit — even to Google’s deep pockets — to spell an end to Android OS as freeware, and higher consumer prices on Android phones and tablets.

For the want of a nail? More like for the want of reading your own email. Or, better still, the true root cause: if you’re using someone else’s software, pay for it. Because ultimately you will...one way or another.

The C4:

1. In August 2010, Oracle (owner of the Java programming platform) filed suit against Google for the unlicensed use of Java in the Android operating system.
2. Responding to Oracle’s subpoena, Google inadvertently supplied an email which apparently acknowledges the use of Java, and the need to pay licensing fees.
3. The trial is ongoing. It could result in a billion-dollar judgment against Google that would inevitably impact the cost of Android devices.
4. Learn from Google’s mistakes: data-dumps can be self-defeating, and it’s always best to simply pay for the products you use.

Gas, Jobs, Big Checks (And Balances)

What a fracking mess.

Depending on your viewpoint, the mess might involve the political fallout that surrounds the hydraulic fracturing (or “fracking”) method of fossil-fuel extraction, or it might refer to the mess left behind by the process itself.

It’s a way of freeing natural gas from shale and rock, through high-pressure injection of water, sand and a cocktail of proprietary chemicals. Opponents of the practice say those chemicals, along with the actual fracturing of the earth deep underground, are spawning a host of problems — including air pollution, water pollution and perhaps even an uptick in seismic activity.

On the other hand, fracking has rejuvenated the domestic oil and gas industry. It has created thousands of jobs, even while still in its infancy. Fracking is the primary reason that the U.S. is now, for the first time since the ’80s, a net exporter of fossil fuels.

We in Northeast Ohio find ourselves on the front lines of this controversy. The Utica Shale formation is a prime target for hydraulic fracturing, and it’s directly below our feet. This can mean a dramatic reversal for our local economy, or perhaps the ultimate destruction of our precious ecology.

The rumblings around Youngstown are, some say, early warnings in the form of earthquakes, under and around the many fracking sites in operation there. Maybe they’re also signals that we have a decision to make. What is fracking worth, and can we pay the price? It’s a decision that we will forced to make soon.

The C4:

1. Hydraulic fracturing, or fracking, uses high-pressure liquid and sand to break up natural-gas deposits deep underground.
2. Fracking, in conjunction with another extraction innovation (horizontal drilling), has revitalized the domestic gas industry. The U.S. is now a net exporter of energy for the first time in decades.
3. Fracking efforts in Northeast Ohio are just getting underway. Critics argue they’ll result in unprecedented levels of pollution.
4. All Americans will benefit from the results of fracking but only some will pay its price. We must somehow collectively decide if the rewards outweigh the costs.  

Best Buy (Before It’s Too Late)

Big losses alter course for big box retailer.

Are the days of big-box retailing coming to an end? Best Buy fears they might be.

Best Buy is moving to reverse their thus-far unprofitable year (they’ve reported a loss of nearly $2 billion in the quarter ending March 3) by shuttering 50 stores between now and the end of 2013.

But they’re not stopping there. Best Buy has studied the dynamics of their loss and concluded that the ways consumers buy electronics have irrevocably shifted. The big-box model, which is in large part how Best Buy has always done business, just isn’t working anymore. Online retailers offer a wider range of big-ticket items (plasma TVs, computers, game consoles) at prices with which the brick-and-mortar sellers — especially ones with big-box rent to pay — simply can’t compete.

So what do you do when your business model crumbles before your eyes? You can give up, of course. Or you can innovate. You can — pardon the pun — think outside the box.

Best Buy is trying a two-pronged approach. Think of them as dueling experiments. First, they’re inaugurating so-called “Connected Stores,” a sort of big-box lite, averaging about 20% smaller in terms square footage and designed with an emphasis on customer service and speedy shopping. Second, they’ll be opening a chain of much smaller outlets concentrating almost exclusively on mobile products. In both cases, and with the surviving big-boxes, they’ll be beefing up loyalty programs and offering free shipping wherever applicable.

Their solutions are yet unproven. Best Buy might yet go the way of Circuit City (remember them?) but they’ll not go down without a fight. They’re fighting the best way a business can: with innovation. Hats off to that.

The C4:

1. In Q4 2011 (which ended March 3, 2012), Best Buy suffered losses of $1.7 billion, or $4.89 per share.
2. In response, the company is moving to close 50 stores, eliminate an additional 400 corporate jobs and cut around $800 million in costs before the end of 2013.
3. They’re also trying to shake up their business model, by testing alternatives to their traditional big-box approach, and with an increased emphasis on customer service.
4. Win or lose, and with all respect to those about to lose their jobs, Best Buy deserves respect for trying to innovate their way back to success.