The Uncertainty Factor

By DAVID BROOKS Published: April 13, 2004

Twenty years ago, Secretary of State George Shultz went to the Park Avenue Synagogue in New York to give a speech about terrorism. Fighting a war on terrorism, he emphasized, means coping with uncertainty.

Terrorists operate outside the normal rules, Shultz observed. Because an attack is so hard to anticipate, he said, "our responses should go beyond passive defense to consider means of active prevention, pre-emption and retaliation. Our goal must be to prevent and deter future terrorist acts."

We can't wait for the sort of conclusive evidence that would stand up in a court of law. "We cannot allow ourselves to become the Hamlet of nations, worrying endlessly over whether and how to respond." We have to take the battle to the terrorists so we can at least control the time and place of the confrontation.

And we have to plan these counteroffensives aware of how little we know for sure.

Facing such great uncertainties, Shultz continued, the president has to take extra care to prepare the electorate: "The public must understand before the fact that some will seek to cast any pre-emptive or retaliatory action by us in the worst light and will attempt to make our military and our policy makers — rather than the terrorists — appear to be the culprits. The public must understand before the fact that occasions will come when their government must act before each and every fact is known."

The Shultz speech opened a rift within the Reagan administration. Shultz's argument was that uncertainty forces us to be aggressive. Secretary of Defense Caspar Weinberger, on the other hand, argued that uncertainty should make us cautious. As one Weinberger aide told The Times, "The Pentagon is more aware of the downside of military operations and therefore is cautious about undertaking operations where the results are as unpredictable as in pre-emptive strikes against terrorists."

Shultz and Weinberger were clear and mature. Both understood there is no perfect answer to terror and both understood the downsides of their respective positions.

Two decades and a national tragedy later, it is hard to find anybody that consistent.

If you follow the 9/11 commission, you find yourself in a crowd of Shultzians. The critics savage the Clinton and Bush administrations for not moving aggressively enough against terror. Al Qaeda facilities should have been dismantled before 9/11, the critics say.

Then you look at the debate over Iraq and suddenly you see the same second-guessers posing as Weinbergerians. The U.S. should have been more cautious. We should have had concrete evidence about W.M.D.'s before invading Iraq.

Step back and you see millions of people who will pick up any stick they can to beat the administration. They're perfectly aware of the cruel uncertainties that confront policy makers, but, opportunistically, they ignore them.

Nor has the administration itself demonstrated that it can operate as intelligently as Shultz in a world of uncertainty. The administration war plan called for a lean, high-tech invasion. That's fine if you know who your enemies are and where you can hit them. But if you don't have that information, you probably have to hang around, feeling your way through the neighborhoods. For that you need boots on the ground — enough to cope with the unexpected. You need heavy armor, because it's likely your enemies will strike first before you know where they are.

The Bush administration sent too few troops into Iraq, and they stuck them in Humvees that couldn't withstand a semi-serious terrorist attack.

Worse yet, the administration never bothered to educate the American people on the nature of war amid uncertainty. The president did not stress beforehand that it was necessary to act, even though some of his suppositions would inevitably prove to be incorrect.

When you read the Shultz speech, you get the impression the country is aging backward. Twenty years ago we had a leader who treated us like adults, mature enough to cope with harsh uncertainties. Now we're talked to as if we're children, which, if you look at the hypocrisy-laden terror debate, is about what we deserve.

find the article at http://www.nytimes.com/2004/04/13/opinion/13BROO.html?n=Top%2fOpinion%2fEditorials%20and%20Op%2dEd%2fOp%2dEd%2fColumnists

A Quirky Brilliance vs. the Dreams of Venture Capitalists

By SAUL HANSELL Published: April 26, 2004

Not every company would coyly spurn billions of dollars and front-page attention. Yet Google seems intent on staying private as long as possible despite the clamoring of investors to own a piece of a company that has become synonymous with instant information on the Web.

There are many good reasons to avoid a public stock offering and the close scrutiny it brings. Indeed, this week the scrutiny will intensify as the company approaches a deadline to file financial disclosures. But in Google's case, its hesitancy up to this point has been a symptom of a long-running battle for control between its two brainy, headstrong founders and the powerful, strong-willed financiers who gave them the money to turn their graduate school project into one of the world's leading brands, according to several people in and outside Google.

The two founders, Larry Page and Sergey Brin, who own perhaps 40 percent of the company, could become billionaires several times over if they take it public. But according to people who have dealt with them, they are less interested in cashing out than in maintaining their ability to direct Google's ambitious strategy and idiosyncratic style.

A lawyer who has worked for Google and declined to be identified out of concern over client confidentiality, remarked, "There are a lot of quirky demands that are made over there that are not made by traditional financial market considerations but are more about control of the founders."

For the venture capitalists - John Doerr of Kleiner Perkins Caufield & Byers and Michael Moritz of Sequoia Capital Partners - the motives are more clearly financial. They have benefited by agreeing to the founders' request to delay a stock offering while the company and its perceived market value grew rapidly. But now, with competition from Microsoft on the distant horizon, it may be an ideal time to cash in on the investment.

Kleiner Perkins and Sequoia put up $25 million in June 1999, buying about 25 percent of the company, according to people involved in the transaction. If a publicly traded Google became worth, say, $20 billion, that would give the investors an 800-fold return on their money, making it one of the best investments in history. And since many of their other investments made at the peak of the Internet boom have collapsed, the venture capitalists need a big return from Google all the more.

Attention is being focused this week on Google because Thursday is the deadline for it to file financial disclosure documents under Securities and Exchange Commission rules. It could meet those requirements by filing papers for a public stock offering - what the venture capitalists are said to favor. Or it could simply file the disclosure papers, perhaps along with a statement that it will begin eventually to move toward a public offering. A person close to the company said last week that it would proceed with this slower course.

Executives at Kleiner Perkins and Sequoia referred calls for comment to Google, which declined to speak about any matters related to a prospective public offering.

But other executives who have worked with Mr. Doerr and Mr. Moritz said they would be surprised if the financiers were not pushing very strongly for a quick public offering.

"Venture capitalists want to cash out," said George Bell, the chief executive of Upromise and former chief executive of Excite@Home, two companies backed by Kleiner Perkins. "This is life. People have to deal with the fact that if you start a company and ask a venture capitalist to take a risk, they are going to want to secure a financial outcome that is highly desirable."

Mr. Bell said he hoped to fend off that pressure and keep Upromise, a college savings and marketing company, private as long as possible. "It is a big distraction to be public," he said, noting that it costs millions of dollars a year to comply with accounting and disclosure rules and to provide liability insurance to officers and directors against shareholder suits.

Of course, Google's current value stems from the founders' willingness to rethink methods of how to search Web pages, at a time when many Internet experts thought that problem had been solved. And the company now appears to be looking at extending its business in ambitious ways, like a new e-mail service for consumers. But the ambitions of the Google founders wander further afield. They have talked about building space transporters and implanting chips in people's heads that can provide them with information as they think. (really? )

A public offering would put these sorts of dreams in a very different light. And it is not hard to imagine Google's share price dropping some day after a comment by Mr. Brin or Mr. Page led investors to worry that too much money was being diverted to lunar-rover design or some other project unlikely to increase the next quarter's earnings.

Since Google is growing rapidly and is profitable, there is no immediate business need for them to sell shares.

"They have so much cash in the bank, they don't need go public," said Andy Bechtolsheim, a co-founder of Sun Microsystems who was Google's first investor. Mr. Bechtolsheim, who is not involved in Google's management, said there is a lot of pressure on Google's founders to go public.

"But it's a hard decision," he said. "It's nicer to live life as a private company, as opposed to living life under the microscope."

In public, Google executives have flippantly played down the importance of selling shares. In January, The Times of London reported that Eric Schmidt, Google's chief executive, told a closed-door meeting that "an I.P.O. is not on my agenda right now."

And in March 2003, Mr. Brin told a gathering of technology executives that Google was avoiding a pubic offering because "that's a lot of work, and I'm lazy."

He added that an offering "requires filling out a lot of forms."

"The S1, in particular, seems like a really long one," he said, referring to the main document that companies are required to file disclosing their finances and other information to prospective investors.

Google has hardly been lazy working to manage the timing of an eventual offering. Early on, it split itself into two companies, Google Inc. and Google Technologies, so that each would have fewer than 500 employees, according to a person who had been close to Google. That was important because the S.E.C. requires companies with 500 shareholders and assets greater than $10 million to file financial statements and most of the other information they would have to disclose in a public share offering.

Early in 2003, the two companies were merged, in effect setting the date of April 29, 2004, as the deadline for Google to make the required disclosure. (The law requires a public filing 120 days after the close of a company's fiscal year, in this case April 29.)

In the meantime, the company has also been working hard to make sure that it could go public if it wanted to. Earlier in the year, it completed an audit meant to verify its compliance with the Sarbanes-Oxley Act of 2002, a law intended to enhance disclosure and oversight at public companies. And now Google's corporate Web site lists a job for a manager for Sarbanes-Oxley compliance, a job title that seems inherently unnecessary at private businesses.

Ultimately, the biggest pressure to go public may be from Google's employees. The company is profitable and the founders could receive millions of dollars a year if it simply paid a regular dividend. But for many engineers and executives who have earned stock options in the last few years, a public offering is all that stands between them and a sports car, a beach house or a year in Tibet.

"Obviously in the end, there's a lot of people who want a liquidity event," Mr. Bechtolsheim said, using the venture-capital jargon for a deal that allows stock to be converted to cash. "It's a trade-off."

find this aritcle at http://www.nytimes.com/2004/04/26/technology/26google.html

[此贴子已经被作者于2004-4-26 12:08:55编辑过]