Happy birthday to my big bro Daniel Kalevor

Happy birthday in advance to one of my favorite people in this world - my older brother, Daniel Kalevor. Sometimes the noise of life prevents us from appreciating loved ones that have played a pivotal role in defining who were are. But such occasions give us a reason to pause, and really take stock of the people whose love and nurturing has materially defined the course of our lives. For me, one such person is my brother Daniel. There are others, but today, I'm using your birthday to sing your praises.

For me, whose father (our father) passed away when I was barely 2 years old, Daniel, was really the older brother/father figure whom I looked up to in the formative years of my life. When I was an exceptional student in elementary school in Nsawam and I had to be jumped ahead a couple grade levels, it was Daniel, who came to speak with the Headmaster (aka Principal) of my school (the great Mr. Frank Obeng, RIP) to make that happen. When it was time to choose a boarding school for high school, it was Daniel who played the deciding factor, in my choice of Presbyterian Boys' Senior High School - arguably the best high school in Ghana based on academic record and achievement. I was so desperate to follow in his footsteps, as that was his alma mater also.

It was Daniel who nurtured my interest and curiosity in history, global affairs and an unrelenting curiosity about the world around me. He was on popular radio quiz shows in Ghana, winning prizes and making us proud. He was on the 'What do you know" Quiz show a few times in the 1990s and each time he contested he won. He was on the "Sunlight University Challenge" in 1996 and although his team, Atlantic Hall, from the University of Cape Coast, lost in sudden death/overtime, by a slim margin, everyone in Nurses' Quarters, Nsawam, where I grew up, saw his gallant fight and I got the street cred for it. "Yeah, that's my big brother" I used to brag. If you're a 12 year old kid and you look up to a guy like that, how would this not make you feel good about yourself?

When it came time for me to enroll at the Presbyterian Boys' Senior High School, it was Daniel, who took me to school, helped me get settled on my first day of boarding school. It was my first time away from home, so I was terrified. But he was there to encourage me every step of the way, visiting on weekends, as often as his schedule would allow. When I was awarded the best performing student at the year 2000 SSSCE from Presbyterian Boys' Senior High School, along with 3 other graduates, again, Daniel accompanied me to receive my award. I believe my sister Pearl was there too. When it was time to go to university, Daniel, yet again, was the one who took to Legon on my first day on campus to help with the mind-numbing registration process.

He was the one consistent, recurring figure that was always there in those formative years. I know, as we both got older, we used to occasionally bump heads every once in a while - after all we are both alphas, but I have never doubted your love, loyalty and sense of duty to your family. Thank you for all you do for our family. You're the best big brother anybody could ever ask for. May the best years lie ahead of you. Indeed, may the best years lie ahead of us. I'm there for you as you've always been there for me. Happy birthday brother.

Iran agrees to framework of potential nuclear deal with P5+1

After weeks of intense negotiations in Switzerland, Foreign Ministers of the P5+1 and Iran agreed in principle, the framework of a potential deal that will prevent Iran from developing a nuclear weapon. Here's what President Obama had to say about this development as reported by the BBC. 

I think this is significant step in the right direction. President Obama has once again proven to be a brilliant President and strategist. The smartest the U.S. has seen in decades. This is a landmark achievement - to permanently dismantle Iran's enrichment of weapons grade fissile materials (plutonium and uranium) through diplomatic channels. 

President Obama is the greatest Commander-in-Chief that the U.S. has seen in a while. And this is why. I believe it was Carl von Clausewitz who once said, that "war is the continuation of politics through other means." Obama has achieved these significant political goals without shedding a single drop of blood. War is not about attrition or killing people. It is about breaking the will of the enemy and winning them over, by any means necessary. The smartest guy is the one who is able to achieve this without shedding blood. 

So yes, Obama is the smartest!! Applause to the the P5+1, John Kerry and the Iranian negotiators. History will thank President Obama for this one day. I am happy that the first black president is leaving such an enduring legacy.

The Grim Reality of the Crisis in Iraq

Apparently Abu Bakr al-Baghdadi, leader of ISIS (the group that swept across Northern Iraq and quickly took over several key towns last month) made it to Time Magazine's 100 Most Influential List. I admire Lt. Gen. Frank Kearney for recognizing a clever, elusive guerrilla commander like Baghdadi. A good solider knows his enemy well, says Sun Tzu. Now, with the nearly $500MM in cash that ISIS fighters stole from Mosul, they’re probably the richest "terrorist" organization in the world.

Many disaffected Sunnis, former Saddam loyalists and Baath party sympathizers are already joining the ranks of ISIS. They're not fundamentalists like ISIS but they're all Sunnis and now Baghdadi has the dough (and the clout) to recruit. ISIS – stands for Islamic State in Iraq and the Levant. Their goal is to turn the Levant (Iraq/Syria/Lebanon) into an Islamic Caliphate. They’re devoutly committed to global Jihad and so I’m not sure anything could have prevented this. It was bound to happen but perhaps Prime Minister Nouri al-Maliki’s policy of politically purging Sunnis has accelerated the process of radicalizing them. Battle-hardened from fighting Bashar al Assad’s troops in the rebel strong-hold of Aleppo, ISIS fighters are pouring into Iraq in their numbers to join the fray.

But then, can who can blame Maliki for his anti-Sunni stance? After all the Shias suffered decades of repression under Saddam, who is from Tikrit, in the Sunni North (one of the first towns to fall to ISIS last month). This whole problem began with the 2003 Iraqi invasion. But then maybe NOT. Maybe it began way before that. Maybe in 1918? – after the allied victory in World War I ended the Ottoman Empire and resulted in its partition into the Republic of Turkey and several “new” Arab states in the Middle East.

You see, much of what is today’s Arab world was part of the Ottoman Empire for centuries. During World War I, a lesser know theater of the war began with the so-called “Arab Revolt”. The continuing ruthlessness of the Ottoman Turks led to simmering Arab Nationalism within the Empire. It eventually culminated in the Arab Revolt which drew support from Britain (via Lawrence of Arabia). By the end of the war, the Germans and the Ottoman Turks were all but defeated and the world powers were faced with the task of creating new sovereign states from the remnants of the Ottoman Empire. While this was no easy task, Britain and France botched this effort in disastrous fashion. Instead of granting freedom to the Arabs (as promised) after their revolt helped defeat Germany and its Ottoman allies, Britain and France secretly drew up plans to divide up the Arab remnants of the empire and share them between each other.

The Sykes-Picot Agreement was one of the worst examples of imperial greed and folly. These guys carved up the land with no regard for the sectarian differences on the ground. The French took Syria and Lebanon, the British took Iraq and Palestine (which later became present-day, Jordan, Israel and the Palestinian territories of the West Bank and Gaza). The Ottoman possessions in the Arabian peninsula became the Kingdom of Saudi Arabia and Yemen; and those in the Persian Gulf became several small kingdoms (UAE, Bahrain, Qatar, Oman and Kuwait) that are ran by western puppets. To show the unconscionable nature of Sykes/Picot’s actions, let me give you a few examples of the sectarian fault lines that have haunted these nations from the the day they were formed.

Iraq for example is about 65% Shia, 20% Sunni and 17% Kurdish. Syria is the exact opposite –it’s about 15% Shia/Alawite, 70% Sunni and 10% Kurdish. Lebanon is about a third Sunni, a third Shia and a third other sects (Maronite Christians, Druze, Catholics). Bahrain is similar to Iraq (more than 70% Shia, and about 10% Sunni) but it’s different in one fundamental way - it’s a Gulf kingdom ruled by the Sunni al-Khalifa dynasty. There are Maronites, Catholics and Druze in varying numbers in most of the region but they’re mostly a minority. Adding another layer of complexity to the region is the Palestinian/Israeli conflict. But that is a subject worth a separate discussion.

As the Sunnis and Shias battle each other in Iraq (and Syria), the Kurds (the indigenous people of the region) are carving up more land. The chaos in the region has actually been good for the Kurds as they are gaining more autonomy in both countries. Assad's troops and the Syrian rebels alike, both stay away from Kurdish-controlled areas inside Syria. ISIS does the same in Iraq. I guess I am “happy” for the Kurds, as they've endured the most suffering and displacement in the region for centuries due to Ottoman rule and European interference. As an African, whose people have endured centuries of slavery and European colonization, I am very sympathetic to the Kurdish cause. Long before the so-called Arab spring of 2011, which resulted in Syria's civil war, the Kurds were fighting the injustice of Bashar al Assad's regime. Long before ISIL took over northern Iraq, they were fighting Saddam Hussein in Iraq. And they've been fighting for autonomy in Turkey for decades. They are brave and battle hardened. And I believe they will be the only credible force that can defeat the scourge of ISIL.

What does all this mean for the region? Well, for starters if the violence continues, the whole region could dis-integrate along the sectarian fault lines that have existed for centuries. We’re already seeing signs of the Kurdish minority in Iraq and Syria getting close to their dream of an autonomous Kurdish homeland (referred to as Kurdistan) as they continue to defend their territory and even capture more land. In addition, as the beleaguered Maliki government continues to lose control of Iraq, more radical Shia elements will step in, garner populist Shia support and that will ultimately lead to more bloodshed. The last thing you need is a war between fundamentalists on both sides of it.

However, everything seems to be headed in that direction – the radical Shia  cleric, Muqtada al-Sadr and his Mahdi army (famed for their long battle with coalition troops during the 2003-2011 Iraq war) is already rallying his troops to make a stand, should ISIS decide to march on Baghdad. Ayatollah Ali Sistani, the highest ranking Shia spiritual leader in Iraq, has also called on all Shia to defend their homes against ISIS. It won’t be long before al-Sadr and Sistani call on their Shia brothers in Iran, Hezbollah and the Assad regime to come to their aid. There have already been reports of Iranian fighter jets being deployed within Iraq’s armed forces to bomb ISIS held areas in Mosul, Fallujah and Kirkuk. If the fighting intensifies, Saudi Arabia, Turkey and the Sunni kingdoms in the Gulf will continue sending piles of cash to aid the cause of ISIS and their Sunni brothers.

The outlook for the region is very grim – perhaps the best prospect for lasting peace is for Sunni, Shia, Kurdish, Druze, Christians and all the peoples of the region to come together and live in harmony. But that hasn’t happened for centuries. Will it ever happen?

Rest in peace Tata Mandela

Below is a tribute to the late South African leader, Nelson Mandela by a South African colleague:

“Thank you Tata Madiba

If Mandela (and many more like him)  had not stood up and fought against apartheid I would not be writing this post.

I would not have been employed by one of the big 4 International Accounting Firms in their Cape Town office as a junior tax consultant in 1998.  It seems inconceivable today that  at the time I was the second black African employed by the tax department. 

He taught us "Ubuntu" ...to be human.  To forgive even your prison warden and people who treat you badly ........for your own freedom.... to allow you to move forward.
Lala kahle Tata Madiba siya kubonga
(rest in peace Tata Madiba thank you)”

She couldn't have put it any better. This goes to show how much Mr. Mandela and his compatriots, who fought against apartheid have achieved. Right up until 1994, South Africa was still under the grips of apartheid.

Next year will be 20 years since the apartheid regime was dismantled after nearly half a century in power. Thank you, Mr. Mandela for your fight. May the ancestors who went before you guide you home to a better place.

It's funny though that whatever top 4 accounting firm she was working for was operating in South Africa during the apartheid years. That was actually the case for several western companies. I don't blame them though...there was plenty of money to be made - the apartheid regime's economic policies were very neo-classical. Many companies that put profit above all else found this attractive and flocked into apartheid era South Africa to do business. Obviously this was made possible because several western countries, did not impose sanctions on South Africa during those dark years.

The right thing should have been for the US and other western countries to impose crippling sanctions on the apartheid regime, as enthusiastically as they did on Iran, for which we're seeing an about-face in Iranian policy. I will always have an issue with Ronald Reagan & Margaret Thatcher for their cozy ties with the apartheid regime. They never publicly endorsed apartheid, but their so-called “constructive engagement” policies, created conditions that benefited the regime and enabled it to survive. Margaret Thatcher actually considered Mandela a terrorist for a long time. It totally makes sense why many people in Africa, celebrated when Thatcher died. 

To make matters worse, while most countries had imposed diplomatic and economic embargos on South Africa, the US, Britain, Israel, France and a handful of western nations, continued to have normal trade and political relations with the apartheid regime. As an African, the suffering of my fellow Africans at the hands of white Afrikaner settlers, coupled with the close economic ties these countries shared with the perpetrators of these heinous crimes, left a sour taste in my mouth. In the end, the forces of good prevailed and many of these countries, including the US, were left on the wrong side of history.

I will tell you who was on the right side of history though – Fidel Castro. Castro’s contribution to the fight against apartheid was pivotal. I consider him a great man, simply because of that. The presence of thousands of Cuban freedom fighters in Angola and Namibia, made all the difference, in the decisive phases of the Angolan and Namibian Bush wars. South Africa’s defeat at the hands of Angolan forces (with the help of Cuba) and their eventual retreat from Angola in 1988, was the last nail in the coffin of apartheid. Why? Because strategically, Angola played a key role in the fight against apartheid. The anti-apartheid movement smuggled weapons through Angola to help the armed struggle. Therefore, de-stabilizing Angola was a key national security priority of the apartheid regime.

However, after the apartheid regime lost the Angolan Bush war, it became clear that their position was untenable. This explains why these 3 events – the Angolan Bush War, the Namibian War of Independence and the fight against apartheid were closely related. South Africa retreated from Angola in 1988, Nelson Madela was released from prison in February 1990 and Namibia declared independence from South Africa, a month later, in March 1990.

Thankful to Mandela and all the others who rose up and fought against such an unjust system. Rest in peace Madiba Mandela. You'll be sorely missed.

Gen. David Petraeus – A Thought leader in the making

By Delaena Kalevor

On Friday November 9 2012, Gen. David Petraeus resigned as CIA director amid a sex scandal with his biographer. The retired 4-star general and husband of 37 years expressed his remorse and poor judgment in indulging in this extra-marital affair. Even though I greatly admire Gen. Petraeus, I agree he did not conduct himself properly.

However, I am not here to pass moral judgment on his character - after all no one is perfect. Rather, I would like to address his intelligence, candor and leadership; and highlight some of the management lessons that myself and other aspiring thought leaders can draw from his life. In my eyes, Petraeus is still a great soldier and I don’t care what conversation you’re having; but when you mention the likes of Dwight Eisenhower, Vo Nguyen Giap, Colin Powell and Norman Schwarzkopf, you should mention Petraeus. I’d hate for his otherwise stellar career to be defined by this single act of indiscretion and weakness.

Gen. Petraeus pretty much wrote the script on the US army’s counter-insurgency strategy during the Afghan and Iraqi wars. While, Donald Rumsfeld was blindly carrying on a bloody war of attrition against the Taliban/Iraqi insurgents, Petraeus was quietly but resolutely advocating his counter-insurgency strategy. Rumsfeld’s strategy was apparently to kill as many Taliban as possible to rid Afghanistan of their influence. That strategy of using overwhelming military might to break the enemy’s will is hardly effective. If it was, the U.S. would have defeated North Vietnamese general Vo Nguyen Giap during the Vietnam War. The U.S. dropped more than 7 million tons of bombs on Vietnam and Cambodia during the war (more the twice the tonnage deployed during World War II) yet Saigon fell to General Giap and communist North Vietnam; eventually marking their victory over the United States.

By the same token, America’s overwhelming military might, even though it killed hundreds of thousands of people, was doing little to break the Taliban and the die-hard Iraqi insurgents. At the risk of being isolated from the Pentagon and appearing as a renegade general, Petraeus continued to advocate his counter-insurgency strategy. At a point, he was even assigned to train the Iraqi army – a move apparently intended to punish him for his independent thinking. I say this because, in a war this important to US Foreign policy, being assigned to a training position (instead of a combat position) could be interpreted as a punitive measure. A training position such as this definitely seemed like a dead-end job.

Still, Petraeus continued to push for his ideas. He had the moral courage to fight for his ideas and he used a rare combination of persistence, tact, ambition, intelligence and humility to forcefully drive them home. Because he was an intellectual, he had thought things through for himself, come to the conclusion that the Pentagon approach was wrong and he had the confidence to push for the right ideas. This is Thought leadership!

His big break came when President Obama appointed him Commander of the International Security Assistance Force (ISAF) in Afghanistan to replace General Stanley McChrystal. As commander of NATO forces, Petraeus now had the leeway to implement his counter-insurgency strategy. Instead of carrying on a war of attrition, he started to build relationships with Afghan tribal leaders in the hostile countryside.

NATO patrols, which hitherto involved raiding Afghan villages to interrogate suspected insurgents, had a complete overhaul. Petraeus recognized that the insurgents had infiltrated the civilian population and had embedded themselves among them. So instead of raids, NATO patrols involved visiting tribal leaders to ask about how "things were going", "what they needed", "whether they needed a well drilled for drinking water", etc. Petraeus gained the trust of the communities as a result and the insurgency started to decline. The strategy simply involved three steps: clear, hold and build - isolating the insurgents by gaining the trust of civilians; consolidating the trust and securing the area; and building infrastructure and institutions to help the people.

His counter-insurgency strategy was the turning point in the coalition’s success in Afghanistan and Iraq. He literally won the war for NATO without as many casualties. Sun Tzu, would have applauded Gen. Petraeus. To paraphrase the great Sun Tzu, sheer military might alone does not necessarily convey an advantage in warfare.

The great Gandhi, decimated the mighty British empire without a single violent act. And I say Gandhi decimated the empire because that is my interpretation - India was the British crown's most prized possession. It was vast, densely populated and it had a great civilization. As soon as they (the Brits) lost India in 1947, they lost most of their other colonies (including my home country, Ghana) in rapid succession. So Gandhi did destroy the once mighty British empire. Again, Sun Tzu would've applauded Gandhi. Winning a war is not about killing people. It's about winning them over - breaking their will, mentally. And this is exactly what Petraeus tried to do with his counter-insurgency strategy.

In conclusion, despite his moral weaknesses, Petraeus is still a great leader. The greatest of his generation. He should be remembered for his great deeds not his indiscretion.

What do Lionel Messi and Charles Simonyi have in common?

Have you ever used Microsoft Word, Excel or any of Microsoft’s office applications? If so, then you have Charles Simonyi to thank – he’s the geek that developed them.

Simonyi was born and raised in Hungary during one of the most difficult times in the country’s history. After earning his PhD in Computer Science from Stanford in 1977, he worked at Xerox where he was part of a team that developed one of the earliest PCs before he joined Microsoft in 1981. As an international student Simonyi struggled with work visa issues for a few years till he applied directly to Bill Gates for a job at Microsoft. Gates, seeing the potential in Simonyi paid for all the paper work required for Simonyi to have the unrestricted right to work in the U.S. Little did he know that Simonyi would eventually develop the most profitable of Microsoft’s products – Microsoft office. He went on to develop other pioneering algorithms and computer programming conventions that form the cornerstone of many Microsoft applications. After interviewing Simonyi, Bill Gates realized that the guy was special. He was gifted. So he went above and beyond the call of duty to make sure he could exploit his talent. And boy, did he exploit that talent. Where would Microsoft be without Microsoft office?

Ultimately, spotting exceptional talent and creating an enabling environment that maximizes that talent is what distinguishes great CEOs from good CEOs. Gates gave Simonyi the room to bring the full complement of his creativity to bear in developing office and in the end, a game-changing application was created.

So what does all of this have to do with football or Lionel Messi? Simonyi’s experience is similar to that of Messi in a few ways. Messi was born in the small town of Rosario, Argentina in 1987. Football scouts from FC Barcelona saw him play and immediately realized that he was gifted. In 2000 at the tender age of 13, the club paid for all expenses to relocate Messi and his family from Rosario to Barcelona. Messi needed his family with him because he had some health issues – he had to undergo treatment for growth hormone deficiency which Barcelona fully paid for. So just like Simonyi’s case, some C-level executive with decision making power saw the potential in Messi and decided to do whatever it took to exploit his talent. Messi didn’t debut for Barcelona until 2004. He spent four years in training at Barcelona’s football academy after his treatment. For someone to invest that much time and money in untested talent shows the strong conviction of FC Barcelona’s bet on Messi.

But it didn’t stop there. Just as Gates gave Simonyi the room to maximize his creativity; Barcelona’s coach Pepe Guardiola allows Messi room for creativity by setting up the attack formation around him. Messi is at his best when Barcelona plays the 4-3-3 or the 4-3-2-1 formation. Football may seem simple on TV but it’s a highly technical game. Realizing how gifted Messi is; Guardiola always tries to use this formation or variants of it (such as their deadly 3-4-3 formation) to ensure that Messi is at his peak performance. The results speak for themselves. Messi has won multiple UEFA Champions League titles with Barcelona in addition to winning the Spanish La Liga multiple times. He is the first footballer to win the FIFA Ballon d’Or for three years in a row.

So why does Argentina have the world’s best player yet hasn’t won a major tournament since winning the world cup in 1986?  Clue – it’s not because Messi doesn’t play his heart out for his country. Messi loves Argentina dearly – Spain offered him citizenship to convince him to play for the Spanish national team but he chose to play for his country of birth even though he and his family have lived in Spain since he was 13. So if he loves Argentina so much why isn’t he at his peak when he plays for his country? The answer lies in leadership (or a lack thereof). Part of the reason for Argentina’s lackluster performance on the international stage is because they lack a tactical coach who will exploit Messi’s talent.

Former Dutch international Johan Cruyff noted that Argentina’s technical bench needs to study Messi – figure out what makes him tick so they can exploit his talent.

Exceptional talent is rare and so when a team is lucky to have such people; they should be treated as such. Obviously football is a team sport but the likes of Messi and Pele belong to a class of their own – and should be treated accordingly. Finding that sweet spot – the optimal situation in which super-stars coexist effectively and efficiently with the rest of us, is often illusive. CEOs and coaches that find that sweet spot turn out to be the greatest.

Argentina’s new coach Alejandro Sabello named Messi captain of their national team in August 2011. It’s taken them this long to realize that the kid is gifted – let’s hope they’re able to exploit his talent to the fullest. It would be nice to see Argentina square off against arch rivals Brazil in the 2014 world cup finals which will be hosted…where else?… in Brazil.

I came, I saw, I botched – How MySpace was given away for a song

On Wednesday June 29 2011 Reuters reported that News Corporation had sold MySpace for $35 million to Justin Timberlake and Specific Media Inc. - an Irvine, CA based advertising company. Justin Timberlake?! I’ll get to that in a minute. This sale represents a return on investment to News Corp of –94%. 

This deal comes on the heels of a long auction process originally expected to raise hundreds of millions of dollars for News Corp’s exit strategy. In the end, Justin Timberlake emerged as the only white knight. Well, him and Specific Media. In an era where internet companies are commanding ridiculously high valuations in the billions of dollars, it’s hard to imagine the lackluster appetite investors have shown in MySpace's bidding process. Not to downplay Timberlake, but in 2011 where we’ve seen Groupon and Zynga file to go public; and LinkedIn, Pandora and Yandex already go public (all of which are expected to have valuations in the billions) if Timberlake was the best MySpace could do then something must have seriously gone wrong.

News Corporation acquired MySpace for $580 million by outbidding Viacom Inc. in 2005 at a time when MySpace had tremendous potential and was poised for triple digit returns. Or so they thought. However, what actually happened has been a totally different story. News Corp’s management of MySpace has been characterized by one execution flaw after another. I’d like to address one of those – how MySpace handled (or mishandled) its 2009 acquisition of San Francisco, CA based social media company Imeem.

Imeem started in 2003 as a social media website where users could legally share, upload  and stream music and music videos. Imeem was a pioneer of a revolutionary business model – free, advertising supported online music. Imeem generated revenue through online advertising, MP3 downloads, sale of tickets and ring tones, and subscription fees from premium account users. Unlike Pandora where free accounts get only 40 hours of internet radio and are also unable to create their own playlists; Imeem users had unlimited access to stream content online and customize  playlists from different users. It was a daring model and Imeem would have been an explosive success if they had achieved their break-even number of users before the credit crunch hit. They hoped to generate enough critical mass from the free online model in order to raise advertising revenue to pay for music royalties. In 2007, Imeem became the first online music site to acquire licenses from all four major US record labels - Universal Music Group, Sony Music Entertainment, Warner Music Group and EMI Group. However by December 2009, the credit crunch had forced Imeem into solvency problems as it was hard to generate sufficient ad revenue to pay for royalties. MySpace acquired it in a fire-sale for an undisclosed amount.

MySpace's integration of the newly acquired firm was executed horrendously. They botched the migration of Imeem’s data onto their servers in a monumental manner. Within days of the acquisition, MySpace decided to import everything from Imeem onto MySpace servers and shutdown the Imeem website. As an Imeem user, I remember receiving an email from MySpace telling me to create a MySpace account and import my playlists within seven days. With MySpace's convoluted website architecture and its own restrictions on music offerings, many users either ignored the email and lost their playlists as a result; or those that created MySpace profiles, couldn’t find their playlists.

Within a few weeks, MySpace had managed to single handedly alienate millions of Imeem users; effectively making the acquisition worthless. The strategic rationale for the acquisition was to attract more users onto the MySpace site in order to increase web traffic, bolster ad revenue and rival Facebook. MySpace had failed to achieve all three.

Instead of trying to migrate Imeem “overnight”, MySpace should have proceeded with the integration on a phased time table. Just like Google did with YouTube when they acquired it in 2006, MySpace should have maintained Imeem as a subsidiary (while maintaining the Imeem site) and then figure out a way to address royalty payments -  perhaps by making the subscription service more attractive and limiting free users to say X hours of streaming, like Pandora does.

They could have figured out creative ways of generating additional revenue such as bundling the free streaming with other services to attract more traffic to the site. The free streaming would serve as a “loss leader” to attract more profitable complementary services. The idea is once you bundle the free service with other attractive services, you tie your users and increase their switching costs. Over time you limit the complementary services to only premium accounts by which time users’ switching costs would be so high it would make sense for them to buy a premium subscription. It’s been proven empirically that products with high switching costs tend to be inelastic (i.e. less price sensitive). At this point the premium accounts could be tied with “free” file conversion software, online games, messaging service and so on and so forth. These would make premium very attractive, thereby having a consistent fee service plus ad revenue to pay for royalties.

They could also have opened up the Imeem platform to open-source developers to design additional services to complement Imeem’s core offerings. Such a penetration pricing strategy would probably have succeeded in making Imeem a dominant platform. In the technology space, free and open source platforms tend to dominate through network effects. Think of how Google’s Android OS is rapidly gaining market share from Apple’s iPhone iOS.

Once Imeem became the dominant platform thereby increasing the switching costs of users, MySpace could then gradually migrate users on a pilot basis until all Imeem users had MySpace accounts. Once their playlists remained intact, it would almost be guaranteed that Imeem users would visit MySpace in a phased migration. However MySpace lacked the vision, strategy, creativity and execution to stay committed to a working plan that would probably have taken many months (perhaps a few years) but could have been successful.

One can point anecdotally to Former IBM CEO Lou Gerstner who noted that a corporate strategy is only as good as its execution. Think of how GE integrates its subsidiaries – on a gradual basis. Or how Oracle integrated Sun Micro Systems after its acquisition. Or how Google allowed Google voice users to send free international text messages for months before introducing a billing service. It’s all about tying and bundling packages for users.

Instead, MySpace destroyed any potential of accreting value from the Imeem deal and eventually had to cut its losses and exit. Such is the difference between success and failure – having the vision and commitment to work out a gradual plan. In the end MySpace has become a poster child of how NOT to integrate an acquired company.