The first of two parts. The second is here.

February 2005 was a tough month for those of us who worked at the Wall Street Journal Online, where I was in my fourth year as managing editor. A slew of media experts were telling the world that we were making a mistake of historic proportions by keeping WSJ.Com a paid site.

The criticism usually followed the same route. First, the author would invoke the obligatory paean to the Journal’s historic greatness. That would be followed by a tsk-tsking that the Journal had walled itself off from the “conversation” and thus was en route to irrelevance, followed by obsolescence.

Then, the elixir: Take down the subscription wall, make the site entirely free, and rake in those huge mounds of advertising revenue (time frame for that TBD, but trust us, it’ll come) that will more than compensate for the sudden absence of circulation revenue.

So, author Michael Wolff told a software trade group that February that the Journal was once “one of the truly astounding information franchises.” But then, he invoked ominously, “something happened” in the mid-1990s. “The Journal kind of disappeared. The Journal went out of the conversation as a point of influence….It seemed to, if not stop existing, at least stop mattering.”

Read the rest of this post

What do CEOs say to each other in private? Mean Street intercepted an (imaginary) email sent this morning by Merrill Lynch CEO John Thain to Sanjay Jha, newly appointed co-CEO of Motorola.

Dear Sanjay,

Many congratulations on your new job–and welcome to our ranks. It is a rare privilege to be CEO of a desperate company.

I’ve been at it now for almost nine months at Merrill Lynch, and I’ve learned a thing or two that you might find useful.

I hate to start on a sour note, but Monday’s announcement could have been handled better. Your arrival at Motorola was trumpeted a bit too loudly.

“A stunning win for Motorola,” cheered the Wall Street analysts. And your recruitment alone added more than $2 billion to the market value of Motorola.

Read the rest of this post

If you are a believer in efficient markets, every now and then a hot tech stock comes along that pushes your conviction to its limits.

VMware was bought for $625 million by EMC in 2004, went public in 2007 and soon hit a market cap of $48 billion. It currently trades at about a quarter of that value.

Even the hottest stock can’t defy gravity indefinitely. Or can it?

Let us take Salesforce.com. The San Francisco software company has been orbiting the stratosphere ever since its IPO in 2004. Its shares went public at $11. Last month, the shares peaked at more than $75.

Read the rest of this post