Business Buzz

Two items that grabbed our attention:

First is the announcement of private equity firm The Blackstone Group’s planned IPO. Some commentators have remarked on the irony that a private equity firm plans to go public, but we would point out that there are similar (if not identical) business lines in major public companies, including Wall Street banks, some other financial firms, and Warren Buffet’s Berkshire Hathaway. Others are quipping that this could be a sign of a top in private equity activity, with the most cynical calling it a PT Barnum ’sucker sale’; perhaps, but we certainly doubt it. A more compelling argument put forth by Scott Rothbort at TheStreet.com is that the firm’s founders are engaged in some heavy duty financial planning. While we have no current intentions to invest in Blackstone equity on the long or the short side, we think that their presence as a publicly traded entity is likely to enhance public information flows regarding the state of the economy, public markets, and private equity activity, and that’s a positive.

Second is an apparent press skirmish between Google and Wikipedia that could develop into a real dogfight. The cover story on the April 2007 issue of Fast Company, on Wikipedia’s plans to enter the search engine business, is entitled "Google’s Worst Nightmare". This morning, a trailer run on CNBC implied that Brian Williams will be doing a spot on NBC about alleged shortcomings of Wikipedia as a research tool for college students. Now anyone who’s seen the news world operate up close knows that many news topics are chosen, not because they’re interesting, but because someone has a vested interest in pushing them into public view. However, we would be speculating wildly (wishfully?) if we assumed that there were some corporate intrigue behind the story; in fact, judging by a January entry on Brian Williams’ blog (scroll down to the entry titled ‘Controversialpedia’), it might have been inspired by his son’s history teacher.* In any case, the Google-Wikipedia relationship could get interesting in the years ahead. Stay tuned.

* As Williams points out, the shortcomings (tradeoffs, actually) of Wikipedia are well known and widely discussed. However, in his blog post, he overlooks the most compelling features of Wikipedia: like any well designed financial or political market, it is reasonably efficient at self-correcting; it is also a valuable aggregator of all information, both accurate and inaccurate. On that latter point, if not for Wikipedia, John Seigenthaler’s family might never have known that he was assumed dead in some quarters, and would not have been able to correct the error. Clearly, Wikipedia and similar information sharing networks are not the same animal as Encyclopedia Brittanica. Unfortunately, rather than perceiving this, Mr. Williams resorts to an elitist (and increasingly anachronistic) tradition when he claims that "Americans have voted with their keyboards not to let a few facts get in the way of convenience." Ah, if only the masses could be as wise as the chosen few…