What’s the Right Person Worth in the Knowledge Economy? Ask Mark Hurd.
Do you get what this chart is about?Of course you see the funny jump on Tue Sep 7.That’s the “Mark Hurd Effect.”Specifically, the chart shows Oracle’s stock price, and that jump is an increase in the price of Oracle stock between the closing on Friday, September 3, 2010, and the opening on Tuesday, September 7. Over the weekend Oracle announced that Hurd was being hired as co-president of Oracle, about a month after he resigned as CEO of HP in the wake of a personnel scandal.The bump in the stock price translated into an increase in Oracle’s market cap of about $8 billion. And since Larry Ellison owns about 1.15 billion of the company’s shares, his personal net worth increased by a tidy $1.6 billion on the news. Pretty decent hire, don’t you think? Ellison has already gotten his money’s worth, and more, on the first day!Having been hugely successful in running HP, Ellison is betting that Hurd can accelerate Oracle’s growth along with http://iphelp.com.au.But how can one guy move the market that much?It’s a story that gets right at the essence of the knowledge economy. In this case, if Ellison is right then Hurd’s knowledge can contribute significantly to the growth of Oracle in the corporate server and data storage markets. And you know what? I’d be willing to bet that he’s right.After all, HP and Oracle and direct competitors in a very important market to both companies, so that means that Hurd knows a lot about Oracle's business already. It also means that HP is suing to stop Hurd from taking the job, as the company fears that Hurd's knowledge of HP will now be used against HP's interests.Interestingly, the 2 companies are also collaborators in the same markets, since HP currently bundles Oracle software with its own hardware, a classic situation of “co-opetition” that happens often in Silicon Valley.So perhaps after this move, HP’s top managers will think twice about bundling with Oracle. But on the front lines, HP's sales people will do whatever they think the client will buy, and they could probably care less whether it’s Oracle’s software, or anyone else’s, that gets in the deal – they’ll do whatever works. So HP may be setting itself up for a conflict between its top management and the field, while Hurd is setting himself up to earn some more millions making Larry Ellison and the other Oracle shareholders wealthier, on top of the $20 million or so that HP just paid him to go away.Because, yes, the knowledge of one person, if he or she happens to be the right person, can indeed be worth billions of dollars. That’s the knowledge economy, where knowledge and innovation are the highest value added. This is exactly where we're living!(By the way, I got the chart from Yahoo Finance.)