Google Misses Earnings, Partly Because of the Cost of Creating Google Foundation

Google released their fourth quarter 2005 earnings today at 1:30PM Pacific Time. To summarize, although Google performed spectacularly, they didn’t please Wall Street, resulting in after hours trading activity that shaved 10-20% off the stock price. This translates into a 60-70 dollar decline in the stock price. Its a BIG deal when stuff like this happens, and money swings so much in such a short span of time.

The reason why I write about it here is because part of the reason why Google said they didn’t perform as well in the fourth quarter was because of its contribution in the creation of The Google Foundation, which is the philanthropic arm of Google.

Here is a link to Henry Blodget’s blog. Blodget is a famous former equity research analyst and he gives us his opinions on what happened today to Google’s stock.

The early brouhaha about an “earnings miss” seems a bit exaggerated, because much was attributable to the company’s gift of $90 million to the Google Foundation and an unexpected spike in the tax rate.

I think its great that a company can do this much to support philantrophy but their stock certainly paid for it. The problem is that a corporation can’t work if shareholders aren’t happy, and this sort of generosity is hard to sustain if the tradeoff is decline in the price of company stock.

In Memory of Coretta Scott King

Human rights activist and former wife of Martin Luther King Jr. has passed away. Link here to AP article:

…in 1969, founded the multimillion-dollar Martin Luther King Jr. Center for Nonviolent Social Change.

King saw to it that the center became deeply involved with the issues she said breed violence — hunger, unemployment, voting rights and racism.

Here is a link to her at Wikipedia.

Microsoft Pitching In To Close the Digital Divide: Cell Phone Based Internet Connection

Some more good news came out today from Davos about how Microsoft is trying to tackle the problem of the growing digital divide. Its exciting to hear that other organizations are thinking about how to solve this problem (thanks to Negroponte and his $100 Laptop Project for building the momentum).

I like how Microsoft is thinking about this from a social entrepreneurship point of view. When asked about Negroponte’s $100 Laptop project, Craig Mundie, CTO of Microsoft, said:

“I love what Nick is trying to do,” Mundie told the Times. “We have a lot of concerns about the sustainability of his approach.” He said there was no firm timing for the cell phone computing strategy, but that Microsoft encouraged such innovations in the past by building prototypes for consumer electronics manufacturers.

Sustainability is requisite to building a solution that creates social value over a period of time and Mundie brings up a relevant point. Finding a sustainable solution is the toughest part of social entrepreneurship, and I hope we see some developments here that we all can learn from and use going forward.

The Relevance of The World Economic Forum to Social Entrepreneurship

Why the World Economic Forum is relevant to social entrepreneurship:

The World Economic Forum (WEF) is a Geneva-based foundation whose Annual Meeting of chief executives of the world’s richest corporations, some national political leaders (presidents, prime ministers and others), and selected intellectuals and journalists, about 2000 people in all, is usually held in Davos, Switzerland. There are also regional meetings throughout the year. It was founded in 1971 by Klaus M. Schwab, a business professor in Switzerland, and has helped fund his family foundation, the Schwab Foundation for Social Entrepreneurship.

The annual meeting is going on right now and there are lots of people blogging it and several news articles coming out each day.

Here is a link to the World Economic Forum Weblog

I’ve added it to my blogroll, over on the right –>

UN body backs $100 laptop for world’s kids

I recently wrote about Nicholas Negroponte and what he’s trying to do with the $100 dollar laptop initiative.

Well, there is an update about it coming out of the Annual World Economic Forum meeting in Davos–

Reuters reports that the UN body is backing the project:

The United Nations has thrown its weight behind a project to place a $100, hand-cranked laptop computer in the hands of millions of schoolchildren around the globe.

The United Nations Development Programme (UNDP) will sign a partnership agreement with the head of the project, Massachusetts Institute of Technology’s (MIT) Nicholas Negroponte, in the Alpine ski resort of Davos on Saturday, officials said.

This is a great win for Negroponte and its wonderful to see projects that aim to close the digital divide gain traction at such an international level.

New York Moves to Limit Colleges That Seek Profit

Education is a space that has truly benefited from the work of social entrepreneurs. You can tell by looking at the Social Capitalist Awards that a lot of great innovators are doing some good things to improve education, particularly in underserved areas.

At the college level, for-profit institutes have been popping up at a feverish pace and enrollment in them has grown explosively. However, the New York Times(sub. required) reports that the New York Board of Regents has placed a moratorium on new for-profit colleges in the state and is moving to better regulate for-profit colleges because of reports of increasing problems.

Merryl H. Tisch, a regent in New York, notes that “This is a cottage industry that needs to be better regulated, and more attention must be paid to it.”

The article notes that:

A recurring question is whether some schools are enrolling students who have little hope of graduating simply to capture the financial aid. In New York, their students drew $136 million in state tuition assistance grants in 2003-4 – 17 percent of the those grants – even though they accounted for about 7 percent of the undergraduates.

There are several cases of various colleges in New York City being scrutinized for their practices, including ASA Institute of Business and Computer Technology, Interboro Institute, and Taylor Business Institute.

I don’t doubt that the profit opportunity in this space has led to this situation, but I do think something has to be said for the explosive growth in enrollment for these colleges. There are a lot of people out there who want to be educated and they turn out to be the ultimate losers in a situation like this.

In my last post, I ended by posing a question about potential negative externalities from social entrepreneurship, and although this situation is a little bit different, I think my question is relevant because these colleges are focused more on seeking profit than educating, and it actually ends up hurting society.

TreePeople: Greening urban communities one tree at a time

TreePeople is a non-profit organization in Los Angeles that I was very active in for a very long time. TreePeople’s goal is:

…to inspire the people of Los Angeles to take personal responsibility for the urban forest – educating, training and supporting them as they plant and care for trees and improve the neighborhoods in which they live, learn, work and play.

I spent many weekends volunteering for TreePeople and was a group leader for years. It is an organization that I truly believe in, but I think you have to be an Angelino to understand and appreciate the existence of this organiztion and their mission.

Well, the reason why I chose to plug TreePeople here is because I got around to reading this article in Wired Magazine titled, “Careful Where You Put That Tree,” and it discusses how researchers at Stanford have found that planting forests in the wrong location can actually make the world hotter.

The article is interesting but it I don’t put much weight behind it. It ends with the following words:

“Earth systems are very complicated — you might be able to reduce warming by cutting down some trees, but that wouldn’t be good for the environment overall,” he said. “The less we interfere with the system, the more likely we are to have a healthy planet.”

That basically means we don’t really know what the outcome will be but it does raise a good question about social entrepreneurship. As social entrepreneurs go into environments to change the status quo, will cases crop up where negative externalities emerge from these activities?

Its not an important topic for now, but as the space grows, it might become an important question in the future.

PBS of the Web!

Here is a post from an online marketing blog describing a “user generated content” site that is touting itself as the “PBS of the web” — you can read their press release here.

Here is a quote from the website:

The Digital Universe is an intuitively organized, multimedia Web that will inform, educate, engage and involve people worldwide. The mission is to realize the Internet’s potential as an open, non-commercial medium that inspires creativity, communication, collaboration and education.

The site is owned my ManyOne Networks, and it describes itself as:

ManyOne is a vehicle for people and organizations to collaborate in the
creation of a new, socially responsible information medium. ManyOne and its
partners are pioneering new ways for people to learn about our world and
universe, communicate, work and trade with each other and experience each
others’ talents.

I’ll be checking it out and I’ll report back soon. You guys should check it out too and let me know what you think.

Good Social Entrepreneurship Advice

Seth Godin is a marketing guru responsible who has written several brilliant books on marketing, including Purple Cow, All Marketers Are Liars, and Free Prize Inside.

He writes a wonderful blog over at and the points he makes about marketing are pretty relevant to social entrepreneurship and I’ve picked up several nuggets from him that shape the way I think about marketing.

A recent blog he wrote titled “The Problem With Prototypes” discusses the problem with prototypes and there is a line in it that I just have to quote:

Most people you know are not as conceptual as you are, especially about stuff you really care about.

I think its important to keep this in mind since social entrepreneurs are a rare breed.