Blogging & Chatting CEOs

This month is surely becoming a weird one in terms of CEOs and their use of new media to express themselves.

First, we have John Mackey, CEO of Whole Foods, admitting that he frequented a Yahoo chat room, frequently trash talking his competitor, now acquisition candidate, Wild Oats.

Yesterday's Wall Street Journal editorial defended Mr. Mackey's right to express himself, and chided the FTC and SEC for witch hunting. In a rare parting of the ways with the Journal's editorial page, I beg to differ.

Mackey purposefully disguised his identity, then made accusations about his competitor, and eventual acquisition target, in a Yahoo stock discussion chat room. Because he hid his identity, one is led to believe Mackey had ulterior motives. Further, since his actions can easily be seen by even a disinterested observer, like me, to be attempting to cause people to sell Wild Oats and, thus, perhaps lower Whole Foods' acquisition price of Wild Oats, they may be in violation of laws regarding manipulation of stock price.

The Journal editors downplay this, suggesting that Mackey just wanted to "sample the mood of his customers." Really? Aren't market research studies the way most companies do that? See my recent piece on Tesco for more details.

While Mackey may not, in fact, be able to be prosecuted for a securities law violation, I think most business people would find his behavior to be, at best, questionable, unethical and undesirable and, at worst, completely reprehensible, wrong and illegal. The use of a false identity when dealing with public opinion and statements involving his own company and a competitor, just smacks of something seriously wrong.

In a sort of related vein, the Journal published an article last Friday spotlighting CEOs who blog. Among these are: Jonathan Schwartz of Sun Microsystems, Bill Marriott of Marriott International, Michael Critelli of Pitney Bowes, and Bob Lutz of GM (not actually a CEO, but a Vice-Chairman of the struggling auto maker).

I've pasted a Yahoo-sourced, five-year price chart of these companies and the S&P500 Index. From what I can see, I'd skip reading Lutz' and Critelli's blogs, if you are looking for business insights. The Journal article's mentioning that most of the blogs are business-oriented in some form or another, but that they also mix personal items.

If these CEOs hope to somehow impress the business world, wouldn't they be better off first demonstrating that they can operate their company in a manner that consistently outperforms the S&P, so they can actually claim to have some basis on which to opine from a position of useful knowledge?

Even Sun's performance is questionable, in my opinion. IT's had a few up periods, relative to the S&P, but significant down periods, as well. Only Bill Marriott looks like whatever he wishes to impart about his business acumen might be useful to read.

Maybe the inferior-performing CEOs/senior executives should focus on improving the performance of the companies at which they work, first, before being so presumptuous as to begin blogging for the business world at large from such a position of demonstrable ineptitude.