Facebook Plays The Long Game, Oracle The Short One

Includes: CRM, FB, ORCL
by: Dana Blankenhorn

There's an old saying that if you're not a liberal at age 20 you have no heart, and if you're not a conservative by 60 you have no brain.

But technology offers an interesting reversal of all that. When companies and their managers are young, they tend to think about the long term. When they're older, they tend to think about the short term, and play the "great game" to please "The Street" and keep the stock price high.

I know this was true when I was starting out as a business reporter. Apple's (NASDAQ:AAPL) Steve Jobs and Microsoft's (NASDAQ:MSFT) Bill Gates were both told, in their 20s, that they needed "adult supervision," and the adults promptly mucked things up with panicky acquisitions and strategic changes.

What has always fascinated me is how Wall Street loves all that chopping-and-changing, and treats the long view as somehow crazy. Maybe it's because bankers make more money from traders than builders.

So now it's Mark Zuckerberg of Facebook (NASDAQ:FB) who is taking the long view. He is big tech's biggest apostle of open source, and yesterday released his company's own C++ development libraries under the Apache license.

This is production code, part of the company's "secret sauce," and one Facebook engineer even referred to the release of the code base, dubbed "Folly," as "this foolishness." (He was being facetious.)

It's not a big move, but it speaks to corporate values. In a good way. I don't own Facebook, and probably wouldn't until it reached what I consider an affordable PE for big companies, which means I'm waiting for some positive earnings news before I even consider it. But I'm not going to dismiss it because its CEO is 28.

Just the opposite. I'm smart enough to know you build your team around Kevin Durant in 2012, rather than Tim Duncan. And I'm a Spurs fan.

On the other hand we have Oracle (NYSE:ORCL). They've just bought Collective Intellect, yet-another "cloud-based," "social marketing" company that is designed to help the Fortunate 500 reach the Twitterers and the Facebookers, then make them loyal to their oily pitches.

Hey, you know what I said yesterday, when Salesforce.com (NYSE:CRM) bought a similar company, Buddy Media. Hey Buddy, run with that money like you stole something.

These are the kinds of moves that middle-age guys make when they're trying to look cool, the corporate equivalent of buying a red sports car, coloring your hair and seeking some arm candy in a club somewhere. Hey, I'm 57, I get it, people and companies get old, and you want to rage against the dying of the corporate night, howl at the moon while you still can.

But, please. I'll say this once so you can understand. Oracle sealed its fate when it bought Sun Microsystems, a failing hardware company, and decided it could lock its software customers into that failing hardware line. Everything since then has been a magic trick. We're cloud. We're social. We're hip. Look, I cut my hair and beard so I look just like a Guy Fawkes mask.

Oracle's moves are as believable as Larry Ellison being the leader of Occupy. And the hair is a dye job. Wall Street may be fooled by this nonsense, but I've seen this movie before, many times, and it always ends in tears. Always.

(Oh, and Mr. Durant. Call me when you have 4 rings like Mr. Duncan does. Until then he's Russell and you're Wilt.)

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.