June 20, 2008
Legalisms Stifle Icahn
By Eric Benderoff | Chicago Tribune
Activist investor's blog message gets lost under warnings and disclaimers
If Carl Icahn, that thorn in corporate America's side, wants to be taken seriously as a blogger, he needs to get his lawyers out of the way.
The Icahn Report went live Thursday after months of delays the activist investor has attributed, at least according to one report, to his lawyers. I'm inclined to believe him, since well into Thursday evening there were no comments approved for any of the seven posts his blog launched. (By about 9 p.m. CDT, comments started appearing on the site.)
But there are plenty of legal disclaimers and warnings about what you can or can't post at IcahnReport.com—not exactly a great conversation starter and a harsh approach for a blog.
On the site you are confronted with an unusual a three-paragraph "guidelines for comments" that is peppered with lawyerlike phrases, such as "solely responsible," "unlawful," "abusive" and "we reserve the right. …"
Yikes, is this the empowerment Icahn hopes to spread? As a world-famous muckraker, one might expect a more welcoming approach for encouraging a dialogue, which after all is the essence of an engaging blog.
If Icahn can use his influence to bully the nation's top CEOs into forcing change, notably Yahoo's Jerry Yang and former Motorola chief Ed Zander, he needs some thicker virtual skin.
Granted, as a blogger myself, reading some of the comments from readers can be akin to swallowing a poison pill. One can be called all sorts of names—one reader recently called me a knucklehead—but there is much value to the feedback.
It's a lesson corporate America is starting to learn, if somewhat reluctantly.
"Even our more conservative clients recognize the power of social media and are starting to put aside their uneasiness about loss of control in order to reap the overwhelming benefits," Deanna Harms wrote on my Eric 2.0 blog regarding a recent post on PR strategies in social media. "With transparency comes trust. You can't have a relationship without it."
The beauty of a blog is that it allows for "one-on-one comments from people," said Kelly Cutler, the CEO of Chicago's Marcel Media, an agency that specializes in the emerging field of social media. "That's the spirit of blogging. If it's not a two-way dialogue, it shouldn't be a blog."
Icahn, of course, is not the first "celebrity" to share his world view from his own Web-based soapbox.
If you looked around the Web on Thursday, you would have learned that Rosie O'Donnell is vacationing with her kids in Orlando and that humorist Dave Barry is amused by a coming reality TV show about an eating-and-regurgitating competition dubbed "Hurl." At MichaelMoore.com, the filmmaker's head is topped by a Detroit Red Wings hat (perhaps to celebrate the recent Stanley Cup victory?), but he hasn't posted since April.
Icahn is different. He has forced change in America's boardrooms and his influence can move markets.
Yahoo's stock price, for instance, remained near $30 after Microsoft's aborted attempt to purchase the company failed solely because Icahn announced he may start a proxy fight to force a deal. The shares closed Thursday at $22.73 as Icahn reportedly weighs his options in his efforts to elect an alternative slate of directors.
To be sure, Icahn's comments are interesting if you are an active investor. In a post titled "Absurdity of Corporate Board Elections," he writes:
"In an attempt to elect nominees to the board in a proxy fight a shareholder is forced to comply with arcane rules for prior notification and to prepare and circulate his or her own proxy statement at great expense. A proxy fight can cost millions of dollars out of the shareholders pocket."
In another post, this one on Citigroup's missteps, he writes:
"If shareholders are not allowed to hold poor boards and CEOs accountable, how can our companies compete? Who suffers? In a declining company, it's not only the CEO receiving huge severance that's a problem, it's also the thousands of employees that are fired due to mismanagement."
Activist blogs can have an impact. Just ask Eric Jackson, whose blog, "Breakout Performance," first tapped into the unhappy ethos of Yahoo shareholders—and later at Motorola—in 2007.
Jackson started a blog to write about leadership and attract new clients for his consulting business.
See the article on ChicagoTribune.com
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