The Moguls’ New Clothes

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Time Warner announced in May that it plans to spin off its AOL division by year end. The new AOL’s value will likely be barely 1 percent of the market price of the inflated stock that Time Warner accepted in the original $175 billion merger almost a decade ago—despite the inclusion of numerous subsequent expensive add-on acquisitions. While extreme, the Time Warner–AOL combination was no aberration. The deal represents less than half the financial damage done during an unprecedented era of excess in the media business. Since 2000, the largest media conglomerates have collectively written down more than $200 billion in assets, a record that would make even Citigroup blush. These write-downs reflect a broad-based legacy of value destruction from relentlessly overpriced acquisitions, “strategic” investments, and contracts for content and talent.

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Where it belongs.

Innovation: it's the ultimate source of advantage, the undisputed heavyweight champion of the economic ring. Innovation is what every organization should be ruthlessly pursuing, right? Wrong.

I'd like to advance a hypothesis: awesomeness is the new innovation.

Let's face it. "Innovation" feels like a relic of the industrial era. And it just might be the case that instead of chasing innovation, we should be innovating innovation — that innovation needs innovation. Why? When we examine the economics of innovation, three reasons emerge.

Innovation relies on obsolescence. Innovation was a concept pioneered by the great Joseph Schumpeter. And to subscribe to it requires us to accept his theory of creative destruction. Gales of innovation make yesterday's goods and services obsolete. Yet, that, in turn, means that the price of innovation is recession and depression. The business cycle might never be vanquished — but it is getting more vicious with every decade. In an interdependent world, obsolescence is what's obsolete.

Innovation dries up our seedcorn. Innovation in its purest Schumpeterian sense is undertaken by entrepreneurs. And so today, we've got an economy where everything's for sale. Yet, little fundamentally new is being created. Businesses focus obsessively on the entrepreneurial aspects of commerce: we are focused still on selling the same old toxic, industrial era junk in slightly better ways. Yet, the challenge of the 21st century isn't entrepreneurial as much as it is creative: learning to create fundamentally better stuff in the first place.

Innovation often isn't. Innovation means, naively, what is commercially novel. Yet, as the financial crisis proves, what is "innovative" is often value destructive and socially harmful. Financial "innovation" turned out to be unnovative: it has destroyed trillions in value - here are some staggering estimates from the IMF.

It's time to ask: have the costs of innovation exceeded the benefits?

A better concept, one built for a radically interdependent 21st century, is awesomeness.

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Jedi tossed out of supermarket for wearing hood

Daniel Jones aka Master Morda Hehol, who created the International Church of Jediism (UK Church of the Jedi) with his brother Barney Jones (Master Jonba Hehol), claims he was victimised over his beliefs by staff at the local Tesco in Bangor, North Wales.

Inquisitr's on fire today.

Dopey burglar logs onto Facebook while burgling

Seriously, is FarmTown that important?

A Pennsylvania burglar is behind bars after signing onto Facebook mid-burgle from the victim’s computer. Stupid? Unnecessary? That’s not even the worst part. Jonathan Parker, 19, didn’t bother logging off when robbing the home of two rings valued at more than $3500, nevermind deleting the history or cookies or not using the stupid internet when he was burgling someone’s house.

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