ComputerWorld: Are companies banking too much on stock prices?

“Ever since companies like Amazon.com, Yahoo and, more recently,
Red Hat enjoyed their multibillion-dollar IPOs, their most
important strategic challenge has been to conjure up a business
model that could possibly justify their sky-high valuations. Not
surprisingly, all three have decided that hypergrowth is really the
only acceptable path forward.”

“For example, since there was clearly no way that Amazon could
justify its stock price as a mere seller of books, it actually has
had little choice but to try to turn itself into an online
Wal-Mart. Similarly, would Yahoo shareholders really have tolerated
a CEO who was content to build just a premium search engine?
More recently, Red Hat’s purchase of Cygnus Solutions and its
consulting services is evidence of a similar pressure to grow at
all costs….

“You can already see signs of similar risks for today’s giants.
Many people I know are tired of messy portals and are relieved to
experience the pure search capability of a site like Google.com.
Similarly, because they now must behave like titans of industry,
key members of the Linux community are already losing some of their
special luster. I’ve even started to check out Barnesandnoble.com
as a quiet protest of Amazon’s cluttered path.”