The beloved New York Mayor Fiorello H. LaGuardia once said, “When I make a mistake, it's a beaut.” Too bad LaGuardia wasn't around this year to witness some of the “beauts” made by the technology sector.
While there were many blunders (and there's still time for more by Dec. 31), here are five memorable ones:
Yahoo CEO Scott Thompson's inflated credentials: In January, troubled Yahoo (NASDAQ:YHOO), the No. 3 search engine, designated Scott Thompson, president of the PayPal division of eBay (NASDAQ:EBAY), the auction site, as its new CEO.
Trouble was that Thompson joined the Sunnyvale, Calif., company four months after CEO Carol Bartz was fired. And Third Point Capital, a New York hedge fund run by Daniel Loeb, had acquired a 5.8 percent stake in the company, considering it undervalued and vowing to make a proxy fight.
Thompson announced cuts and layoffs but wasn't very careful. Preparing the proxy fight at Yahoo's annual meeting, Loeb's staff determined that Thompson had inflated his college degree from Stonehill College, adding a non-existent accounting degree, on a federal proxy filing. Stonehill officials confirmed their finding.
Thompson was fired in May. Then he quit as a director of Splunk Inc. (NASDAQ:SPLK). Clearly, it has to be world-class blunder to inflate a resume when you work for a search engine and are under attack from skilled Wall Street fighters who can verify credentials with a phone call.
Instagram's sale to Facebook (NASDAQ:FB) for $1.1 billion. Here, the lesson is clear: Don't let two CEOs under 30 make a deal without adult supervision.
In the run-up to its May initial public offering, Facebook CEO Mark Zuckerberg, then 27, invited Instagram CEO Kevin Systrom, 26, to his house to discuss a sale. On their own, the two agreed on a sale price: $1.1 billion.
“We're psyched,” Systrom said.
Not bad for a 16-month-old company whose imaging apps for mobile platforms add to Facebook's versatility. Systrom's mistake was agreeing to take $300 million in cash, with the remainder in Facebook shares, which were priced in May at $38.
Trouble is, by the time the deal closed in September, the 23 million shares weren't valued at $874 million but only $407 million.
That's more than $450 million that Systrom and his venture capital investors, including Benchmark Capital, left on the table.
Facebook's $104 billion IPO valuation. The Menlo Park, Calif., company's IPO will live in infamy for its sky-high price, lack of earnings, Wall Street hype, and glitches in its initial trading on May 18, when shares priced at $38 traded briefly at $42.05 and then froze for 30 minutes.
Subsequently, shares fell as low as $17.55, just before the Instagram deal closed, before trending up lately. They closed Friday at $26.81, valuing the company at $58.1 billion.
With so many billions in value erased, scores of shareholders sued in a case that's still not been scheduled for trial in 2013. As well, the Facebook fiasco froze the IPO market for two months, before a few technology companies like Palo Alto Networks (NASDAQ:PANW) broke the ice.
Apple's erasing Google Maps from iPhone 5. Rather than keep maps from rival Google (NASDAQ:GOOG) on the iPhone 5, Apple (NASDAQ:AAPL) decided to eliminate the beloved feature when it introduced the iPhone 5 in September. Enter Apple Maps.
The Cupertino, Calif., company committed a major blunder here because Apple Maps were inaccurate and annoyed users.
The iPhone 5 shipment date followed Apple shares reaching an all-time high of $705.07. On Friday, they closed at $509.79, only two days after Google introduced a Google Maps app for iPhone 5.
Another company to lose out here was ailing Nokia (NYSE:NOK), which acquired Navteq and its map technology for $8.1 billion. Nokia, which runs now on Windows 8 from Microsoft Corp. (NASDAQ:MSFT), issued an app called Here last month but didn't market it well.
Apple CEO's $100 million manufacturing commitment. Apple CEO Tim Cook told Bloomberg BusinessWeek the company wants to repatriate some of its manufacturing from Asia to the U.S.
“We'll literally invest over $100 million,” Cook said. But that's a drop in the bucket for electronics manufacturing. By contrast, the new semiconductor plant in Malta, N.Y., owned by GlobalFoundries of Abu Dhabi cost $4.6 billion.
So how much will Apple invest in any plant, considering its cash and investments exceeded $121 billion as of Sept. 24? At best, Cook's claim looks like grandstanding and serves to highlight the difference between a Chinese contract employee who may earn $2.50 an hour with one in California who may earn $15.
David Zielenziger is a veteran editor and journalist who has written for newspapers including the Baltimore Sun, Asian Wall Street Journal and EETimes, as well as for...