Carbonite CEO admits dropping Limbaugh hurt more than expected

[JG55]

Carbonite CEO admits dropping Limbaugh hurt growth more than expected

Posted by William A. Jacobson Friday, August 3, 2012 at 12:13pm

Carbonite famously dropped Rush Limbaugh on a Saturday Nightat the height of the Sandra Fluke controversy. Carbonite became the poster child for the Rush boycott movement organized by Media Matters, whichcoordinated the effort with so-called independent groups.

At the time I examined Carbonite’s SEC filings, and how Carbonite had built its business model based on high growth driven, in significant part, by the promotion of Carbonite by Limbaugh. I predicted that Carbonite had shot itself in the foot, and put political correctness before the interests of its shareholders.

Since that time the Stop Rush effort has imploded, with backstabbing and accusations among the participants. Limbaugh has had better numbers than ever, and the hype surrounding Mike Huckabee as a Limbaugh replacement has gone flat.

Yet what became of Carbonite?

On August 1 Carbonite released its 2d Quarter 2012 results, the first full quarter after dropping Limbaugh in March. The results shocked Wall Street, as Carbonite did not meet its growth targets, causing multiple analysts to drop the target price. The stock dropped 15% in a day. (h/t reader W)

Most important, in a conference call held on August 1, the CEO David Friend admitted that dropping Limbaugh damaged Carbonite’s growth, and is likely to do so for at least one or two more quarters.

The full audio is available here. The key passage is embedded below. (Transcription mine, official transcript not available yet)

(3:10) CEO Friend: â€There were four factor that contributed to this slower growth. First, in March we stopped working with one of our top producing radio endorsers. While we recently contracted with three new radio personalities, it takes 3-6 months to ramp up new radio hosts so we probably won’t see the full effect of this for another quarter or two.â€

(24:15) Q: “I guess I’m a little surprised that you were caught by surprise by the radio host change ’cause I know we’ve talked and I guess my impression was that it wouldn’t be that impactful but I guess it was quite impactful.

CEO Friend: “Yeah, I’d say it turned out to be a bigger issue than we had anticipated. Because you know at the time there was a lot of noise, I mean we had a huge spike in web traffic around that time just because of all the interest in the whole subject. And it took close to a month for that to sort of die down. And meanwhile our metrics were, we really couldn’t see what was going because there was so much noise around the website that we had no idea what the ultimate impact was going to be. It turned out to be a bigger hole in our revenue than we had thought when we initially did this. However, I don’t think there was any, I’m not regretful of the decision, I think things would have been worse had we not done that.

(added) The analyst asking the question indicates that Friend previously had indicated in private conversations that there would not be a substantial impact. This demonstrates how Friend misjudged the situation. Additionally, Friend says the “metrics†could not be known for a month after dropping Limbaugh and that Carbonite had no way of judging the impact. Yet I don’t recall any statements from Carbonite reflecting the disarray in its ability to measure its own business model.

The last statement by Friend, that the damage would have been worse had Carbonite not dropped Limbaugh is laughable. Friend has been cause doing serious damage to shareholders based on a political decision which was taken precipitously on a Saturday night. It’s too convenient now to say things would have been worse, when Friend completely misjudged the impact of dropping Limbaugh.

Update: Carbonite shareholders have another reason to worry. Friend has just starteda potentialy competitive online storage company with a recently departed executive.

Edited August 3, 2012 by JG55

[Defender]

Ive been considering an online backup, guess this decided for me NOT to use Carbonite!

[hornett22]

this should always be the result of choosing political correctness over common sense.

[TMF]

Funny how everyone has forgotten about some slutty college chick with her hand out, but haven't forgot about this company's knee jerk capitulation to the rabid left.

[Will H]

I back up everything on an external hard drive and keep it in my dad's gun safe. He made copies of all his important stuff and keeps it in my gun safe. I like that a lot better than backing up my important stuff to a 3rd party company by uploading it all via the internet. I really don't know how a company like this even stays in business to begin with.

[Guest ArmaDeFuego]

I back up everything on an external hard drive and keep it in my dad's gun safe. He made copies of all his important stuff and keeps it in my gun safe. I like that a lot better than backing up my important stuff to a 3rd party company by uploading it all via the internet. I really don't know how a company like this even stays in business to begin with.

Do you really back it up & swap it every day? That sounds like it would get annoying after a little while.....

Thats what these companies offer: convenience. They automatically back up everything & you dont have to think. I had Carbonite for a while & loved it. After reading this there is no way I'd go back to them tho. I might check out Mozy if I ever feel the need to back up again. I have an external hard drive but I dont back up to it nearly as often as I should.

[gjohnsoniv]

Anything important I don't put on a computer to start. Call me paranoid but it's all on paper and in several locations. I just don't trust computers enough.

[Guest 6.8 AR]

That whole Sandra Fluke thing accomplished something just like the Chic Fil A thing is now. It exposed stupid

people for what they are and caused others to make politically expedient(or PC) decisions that came back to

bite 'em in the rump.

Keep doing this kind of stuff, you commies. You need to keep exposing yourselves so more good people regain

their brains and quit listening to you, and quit voting for your kind.

[JG55]

It might be understandable for a company that was especially developed to market just to women might drop Limbaugh for the Sandra Fluke dustup. . But it's a tech company. Carbonite's CEO should be replaced for stupidity, He has cost his share holders

[Guest 6.8 AR]

It might be understandable for a company that was especially developed to market just to women might drop Limbaugh for the Sandra Fluke dustup. . But it's a tech company. Carbonite's CEO should be replaced for stupidity, He has cost his share holders

Dearly!

[Sam1]

Ive been considering an online backup, guess this decided for me NOT to use Carbonite!

check out http://www.crashplan.com we have used them for a couple years now, they have unlimited space and never delete your previous versions. One plan can do three computers and works between mac's and pc's.

<edit> just a shameless plug for them. The application works pretty well on the local system, we've got ours set to check for changes every 60 seconds. The wife had accidentally deleted a bunch of recordings from law school and we were able to restore them all about a month later when she realized it (it only took about 5 minutes to get all of them back). It is pretty similar to the other backup services, their web panel looks like this:

just click the date that you know the file is the correct version that you want to restore, click a check box and it creates a zip file for you to download. Pretty straightforward

Edited August 5, 2012 by Sam1

[Guest 6.8 AR]

Funny how everyone has forgotten about some slutty college chick with her hand out, but haven't forgot about this company's knee jerk capitulation to the rabid left.

Forgetting takes time, depending on

whether you were paying attention or

not.

Most people around here thought

Fluke was an electrical tester.

Well , I guess they were right, also.

That Fluke blip on the radar was as

long as this gay blip will be. It's about

over now.

Sent from my iPhone using Tapatalk

[analog_kidd]

Well, Rush is a controversial guy, who frequently makes statements that rile folks up. I would have figured they would have taken that into consideration before making him their spokesperson.

[Guest 6.8 AR]

He had a lot to do with them building

their business. I doubt many others

reach the numbers he does.

Sent from my iPhone using Tapatalk

[AL308]

You should back up your own data, instead of having it somewhere in the cloud, where someone else could get to it. Also, why listen to a guy like Rush Linbaugh, another Oxycontin pill popping drug addict?

[TMF]

Also, why listen to a guy like Rush Linbaugh, another Oxycontin pill popping drug addict?

Ahhh! Blasphemy!

[Sam1]

You should back up your own data, instead of having it somewhere in the cloud, where someone else could get to it.

You would rather have your data stored/backed up on a device behind a $100 firewall than in a secure data center with competent operators and millions of dollars worth of security appliances and measures? The "cloud" is nothing more than a good marketing strategy because people like to use buzzwords for processes and technology that already exist, in an attempt to gain more marketshare from, for lack of a better term, "normal" computer users.

The levels of protection provided by these companies is at an astronomical level when compared to having some data encrypted on a storage device of a home network.

[Seabeejason]

Don't get me wrong, I like me some Conservative radio. But I don't listen to Rush Limbaugh. I don't like the guy.

And he's from my home town.

[Guest 6.8 AR]

You should back up your own data, instead of having it somewhere in the cloud, where someone else could get to it. Also, why listen to a guy like Rush Linbaugh, another Oxycontin pill popping drug addict?

I thought that was covered several years ago. He seems very "with it" nowadays, or is this something new?

I think he dealt with that problem a long time ago.