November 15, 2005

Google schmoogle – Australian telco targets world domination

Posted in Articles at 10:53 pm by siddey

Australia’s largest telecommunications firm, Telstra, has today released its vision for moving beyond mediocrity into a new era of profitability. This vision is one in which it is claimed that Telstra has more to offer in the Online search space than the likes of Google.

Delving deep into the myriad of powerpoint presentations and transcripts, there are few highlights, especially for the 10,000 workers to lose their jobs over the next three years. I’m impressed that a company which will lose 10,000 employees and still stay functioning, actually knows they have 10,000 employees to sacrifice. Clearly their HR department gave up counting years ago and opted to install turnstiles at the door. Mind you, “10,000″ is an impressive sounding number. Much more so than “1″ or “42″. All I hope is that included in that number there are those responsible for Telstra’s arguably self-destructive focus on extracting ridiculous returns from business customers and for forsaking the Australian public.

In my opinion, innovation is a lost art in their world. Like the large Australian banks who in the 1980’s gleefully slashed branch numbers and hiked fees to grossly enlarge their bottom line, only to reverse the trend in recent years, hoping their customers would forget, Telstra is now also implying a focus on customer service.

Any glimmer of hope that Telstra would open its Sensis division’s location services technology platform (WhereiS) to the general development community were crushed today, as the company sent a clear message that it will stop at nothing less than solo, World Domination.

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I admit that the idea of World domination is appealing to me and Telstra’s new CEO, Sol Trujillo seems to think so too. I personally would have put my money on opening up LBS technology to the general community a la Google or Yahoo! style as the way to achieve this but who am I to tell the company who has lost 25% of their market value in three months what to do. Google’s massive profits and record share price are surely beginner’s luck!

Telstra’s vision for its Sensis division seems remarkably boring, unimaginative and lacking any of the public appeal (or detail) of LBS initiatives in the United States. I spotted what looked like a re-badged Tom-tom navigator unit on some powerpoint slides but that’s hardly the same as showing off a shiny Mio a701 running some form of open architecture LBS platform, is it?

If Sol thinks Google is “Google schmoogle?, he’d better start delivering the goods…..FAST!

If you’re going to go it alone with LBS, Sol, you had better give us subsidised GPS-enabled mobile handsets, free LBS software and cheap capped data rates. Then maybe, only maybe, will you be able to lure customers to your proprietary world. With that I would be happy to watch a few ads, just as I am with Google or Yahoo!

If not, I’ll race you for the throne myself! *sound of wild maniacal laugh*

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9 Comments »

  1. Steve said,

    As a former employee of Mr. Trujillo, and having watched his career, I can truly say to Telstra, and its personnel, “Good luck!”

    While the saga of Trujillo’s former employer, Graviton, has been largely sanitized on (from?) the web, his penchant for running things into the ground and then bailing out with a sizable golden parachute is the stuff of legend. France Telecom’s Orange is only the most recent, prior to Telstra. He leaves massive layoffs, poor service, and discontent in his (sizable) wake.

    At U.S. West, a dialtone within 8 seconds was a figure of merit! Imagine.

    At Graviton, one of Sol’s greatest innovations was to change a simple, if understated, corporate logo to something incomprehensible to all who worked there, except his corpulent COO. At a time when the company desperately needed to get a technical product out the door, Mr. Trujillo was touting ‘Big Mo’ – a bastardism for Momentum, all the while hiring ‘management’ staff as though there were no tomorrow.

    Later he would claim that he was misled when recruited, encouraged to believe that there were products and ready-made market for them. What about due diligence? Apparently, not on the radar.

    As employees, we all wondered at the rosy forecasts, and the use of employee numbers as a success metric – we hired #125, shortly before Bloody February, when whole departments were axed. The idea that we were ‘on target’, based on headcount, while R&D sat twiddling their thumbs, without any clear product plans, or marketing plan, made us wonder exactly what Sol had up his sleeve.

    Sadly, it was pink slips, and the ripcord to the above mentioned parachute.

    RIP

  2. Todd said,

    Steve, your comments seem eerily familiar when I re-collect the various press articles covering Sol’s tumultuous Telstra dynasty. Arguably, the Australian Government recognised this professional characteristic and saw it as an opportunity to tart up Telstra prior to the public sale of it’s remaining shareholding. If that was the case, undoubtedly they didn’t see the rapid pace the gravy train would reach before poor visibility saw them crash into a wall of competition legislation with no strength left to free survivors.

  3. sarah said,

    wow really interesting Steve.. it’s true, it’s hard to find damning
    accounts of Sol’s time at graviton on the net.. it seems to be the
    lost
    year of his life! I’m looking into doing a profile on sol – Steve and
    Todd – would LOVE to speak to you both, if you’re interested..?

  4. Steve said,

    Sarah, Todd – I never figured on much interest in this thread, just wanted to vent a bit.

    It’s interesting to note that three additional names pop up as part of Sol’s entourage: Greg Winn, John Gonner and Linda Christian. Greg is a former pole-climber from US West, who apparently pole-climbed his way to a high position there, and to Chief Operating Officer at Graviton. He was considered to be the ‘bad cop’/hatchet man at Graviton, and was quite a piece of work. His education was NOT his most valued attribute. John Gonner had quite a lofty title as well, but was rarely actually seen. Rather, a series of non-sequiturs in memo form seemed to be his forte. Linda Christian had some kind of project management function, and to be fair, seemed to have a lot on the ball. Unfortunately, she seemed to be a Greg Winn plant, and was believed to report on others’ comments regularly.

    These folks commuted from Denver/Phoenix and maintained residences in La Jolla, presumably at Graviton’s expense. In fact, other than changing the logo, Sol/Greg et al’s greatest contribution was to rewrite the travel policy to include the lease deal for Sol’s jet…

    This, at a time when Graviton had no product, and had barely moved from garage-sized startup (albeit with a good chunk of cash). That cash could have put to MUCH better use.

    Sarah – would be happy to talk to you – let me know how to reach you.

  5. David said,

    Sarah, Todd:

    Steve pointed me at this blog, and I read it with interest. I was employee #6 at Graviton and was one of the product development managers there (I was Steve’s supervisor). All of what Steve says is true. Trujillo’s stint with Graviton is a very carefully sanitized episode in his professional career, but there are quite a few San Diego engineers and computer scientists who could tell you all about the adventures there. For a company that had no product, no revenue, no product development or marketing strategy, Graviton was burning up approx. $US 2.5 million per month, most of it on the grossly inflated salaries of Trujillo (reportedly being paid $700K annually) and his management team. At one point, Graviton had 11 vice presidents (while the total size of the company was under 100). As managers, we were pressured to hire, hire, hire, and I didn’t find out until later that the reason for this was Trujillo had worked a clause into his contract that he would get an additional bonus when the company reached a specific headcount (I believe this number was 125 or 135). Right after that goal was reached, “Bloody February” struck. All together, Graviton flushed over $US 60 million down a rat hole in just about 2-1/2 years, producing nothing. In fact, the demise of Graviton actually resulted in many VC firms backing away from funding wireless sensing and M2M start-ups, since most investors only saw the failure as a reflection of the non-feasibility of the technology — nothing could have been further from the truth. What Trujillo and his team pulled off at Graviton was nothing less than a corporate hold-up. His management staff was chock-full of individuals worth millions individually, with essentially no down-side in the event of Graviton’s failure. On the other side, there were many more individuals who worked many hours writing firmware and developing prototype products while hoping the stock options purchased with their own salaries would bear some fruit — these individuals most certainly had a down-side, and many of them sacrificed far more than Trujillo or his staff in terms of the percentage of their income they threw away.

  6. Todd said,

    The cycle appears to be continuing.

    For those interested, the recent article from news.com.au below indicates that Sol’s amigos are standing behind their boss whilst he is under fire from the Australian Government (and shareholders). Telstra’s continuing poor performance and its focus on blaming legislation for its lack of competitiveness, continues to cast doubt over Sol’s ability to transform the company. At this point in time, Telstra shares are at an all time low and the company has announced Sol is due to receive a remuneration package worth over AU$8.7 million this year.

    http://www.news.com.au/business/story/0,23636,20503340-462,00.html

    Is this money well spent?

  7. Rick said,

    I worked under Linda Christian and Sol and believe they had the right intentions.

  8. Todd said,

    Hi Rick,

    I’d like to hear more of your perspective as no doubt others would. Can you share more of your thoughts with us?

  9. siddey said,

    As a form of closure for this thread, some may be interested to read the article below (source: news.com.au) outlining comments Sol made on the BBC following his rather unceremonious departure from his tenure here at Telstra.

    http://www.news.com.au/business/story/0,27753,25539478-462,00.html

    Be sure to read the reader comments section at the bottom to pick up on public sentiment about his contributions.


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