Stanford GSB: Stanford Business May 2000

Steve Ballmer (front) and Jeff Bezos (behind) enjoyed sharing the View from the Top marquee.

Photo by Stuart Brinin

THE BUSINESS SCHOOL had its own Super Tuesday in February, when Jeff Bezos, CEO of Amazon.com, and Steve Ballmer, president and CEO of Microsoft, described their take of technology in separate View from the Top speeches. They agreed on one point: You ain't seen nothin' yet.

"E-commerce is as bad today as it's ever going to be. And it's good enough now to attract 17 million customers," Bezos told MBA students who filled the auditorium and several overflow rooms during his student-sponsored talk. "Look at the technology that's coming."

A few hours later, Ballmer, MBA Class of '81, echoed the belief, saying Microsoft has spent about $4 billion this year on research and development. "Only Ford, General Motors, and IBM spend more."

Both speakers see the Internet world changing radically. Bezos said e-commerce has not yet begun to have secondary effects on the marketplace. "When e-commerce starts to be a reasonable fraction of retail sales, companies like Fed Ex and the U.S. Postal Service will change the way they do things to support the e-commerce sector."

Both CEOs defended their company's size and profitability—Microsoft for its huge size and market share and Amazon.com because it has yet to turn a profit despite $2 billion in annualized sales last year.

Bezos warned the current wave of dot-com entrepreneurs not to be too hasty in dismissing stock valuations of the Internet sector as being out of sync with reality.

"There may be times when it is irrational, but sometimes the market is actually speaking some coded language," Bezos said. "Wall Street analysts and the market in general started telling us that we needed to be focused on profitability at about the same time we began to focus internally on driving toward profitability. Is this a coincidence? I don't think so," he said. "Sometimes the market is smarter than any of the individual participants in it."

Ballmer, who spent a year at the Business School before joining what was then a small startup in Redmond, Wash., told students: "I'm sure many of you will choose to join companies that view themselves as being in the Internet business. If any of you choose to join companies that think they're not in the Internet business, you should probably have your head examined. All business needs to have that kind of customer connection in this age."

TWO MBA '89 CLASSMATES, Tom Kiernan and Alison Davis, are cooperating in the effort to put national parks on a stable financial footing. Kiernan is president of the National Parks and Conservation Association (NPCA), an 81-year-old private, nonprofit organization that in terms of membership is the nation's sixth largest environmental advocacy group. It bills itself as both a friend to and critic of the National Park Service.

Kiernan launched the NPCA's National Parks Business Plan Initiative in 1998. The Initiative sends MBA student interns from 10 major business schools to selected national parks, where they identify the true costs of running the park, quantify available funding, and try to close the gaps between the two. "You would be amazed," says Kiernan, "at how difficult it is for any one park superintendent to know exactly where the money comes from and in what areas it was spent."

Davis, the founder and head of the MBA Nonprofit Connection, which places MBA grads in public-sector organizations, recruits for the NPCA. In two summers so far, three Stanford MBA students have worked on the project: Tina Colacino and Stephanie Hsieh, both MBA '99, worked at Mount Rainier and Yellowstone, respectively, and Gali Anaise, MBA Class of 2000, was assigned to Rocky Mountain National Park in Colorado. According to Anaise: "Being a federal employee may not be as sexy as being a dot-com founder, but it might well be saner. Everyone kept telling me that the park service pays you in sunsets. Don't tell the feds, but I was overpaid."

Our favorite item this issue came from Araby Leary, MBA '76, who reported that her classmate Chris Baumgart, whose day job is with Panasonic, moonlights as the spokesperson for the Hollywood sign, the 50-foot tall symbol that has advertised Tinseltown for most of the past 77 years. Baumgart, who is chairman of the Hollywood Sign Trust, the organization responsible for maintenance and preservation of the official Los Angeles cultural and historical monument, represents the sign in all its dealings with the world press. A sign with a flack? Only in Hollywood!

Spreadsheet One