Taking Stock / Yes, Yes, Yes. No!

When Webvan, the Internet company aspiring to revolutionize the world of supermarkets, collapsed, Shlomo Liran breathed a sigh of relief.

Few know that, when he resigned from the top post at dairy firm Strauss four years back, Liran and Coca Cola Israel chief Rami Shalev seriously looked at launching an on-line supermarket in Israel. Their model was the on-line shopping sites that sprouted and flourished in the United States or, more accurately, on Wall Street.

Liran even managed to intrigue food giant Danone, with which he worked closely when he ran Strauss. He also talked with Polaris, a venture capital fund known today as Pitango.

Fortunately for him, Danone decided the investment didn't suit it. Also, Polaris cooled on dot.coms the moment the Nasdaq started to collapse.

Then Ilan Biran, CEO of Bezeq, called and offered him a plum job: the helm at the most fascinating media and communications firm around - the Yes satellite TV company. Sick of the food industry, he was in the market for new thrills. Liran bit.

It took less than five months for him to grasp the depth of the pit into which he'd fallen. Behind the glamorous facade of telecoms and media hid an intricate, difficult operation, struggling in a competitive, cruel market. Opposite him loomed a potent rival with aggressive shareholders who were determined to grind him into dust.

He realized the horrible downsides of managing a business that was burning up millions of dollars a month, of desperately wooing the banks and shareholders, of the endless discussions at the board, of the ceaseless amendments to the company's business plans but, mainly, of the painful ritual of revealing the company's appalling balance sheets at the end of every quarter.

But Liran was out of choices. He knew that if he jumped ship, he'd be branded a coward afraid of challenges. Trapped, he gritted his teeth and did his best to tackle the job.

Warm and cuddly

On Monday, Liran announced he'd had it. By year-end, he said, he plans to leave Yes.

His announcement was little surprise to anyone who'd talked with him in recent months. He frequently indulged in summing up his achievements at Yes, including an expanding subscriber base, a drop in its cash-burn rate, and improved positioning. But, mainly, he would wax nostalgic about the happy days at "a cozy company like Strauss".

By "cozy" he wasn't necessarily referring to his boss, Mickey Strauss, but to the atmosphere characterizing the firm, which could boast a robust market status over decades and substantial cash flows, too.

Even if Liran's announcement was hardly a shocker, it was still bad news. Not only because Yes is losing a man who managed to manage it with success, but mainly because Liran is not leaving a "stabilized" company. He did not finish the job.

With all due respect to his achievements, Liran leaves a company shy of an operating balance. The worrying thing is that he lacked the patience to wait a few more quarters, until the company could break even.

His haste may attest to the grinding pressures on managers at communications companies, in the immediate post-bubble era, as credit-choked banks close their fists. But it may also indicate his assessment that breaking even will take longer than the latest business plan predicts.

No, it isn't that Liran should stay at Yes until it starts rewarding investors for their massive contributions, totaling more than $650 million. Assuming the capital markets don't go crazy again, its chances of doing anything like that in the coming decade are minute.

Most telecommunications and high-tech companies will never return the elephantine investments made during the bubble days. Over here, the IDB-Fishman-Yedioth Ahronoth group will probably never recoup their investment in buying Golden Channels for $350 million. Those were maddened days, with money rolling down the streets; corporate valuations were sky-high and competition led whole sectors into ill-thought management decisions.

Yes' shareholders and banks, and those of the cable companies, will have to reach an agreement on who bears the burden of the firms' towering debts accrued during the bubble days. Part of the loans will be written off, the rest will be rescheduled and the shareholders will find themselves diluted as new partners enter.

Picky, picky

From the public's perspective, the key question is when Yes and its rivals, the cable companies, can break even and operate without a lifeline from shareholders and the banks, which have been gradually shutting the doors anyway. The question is when the public will see true competition between the satellite and cable offerings, and what will happen to the product, the service and, mainly, the price.

Liran's departure may signal that he's concerned about the steep slowdown in new subscriptions. The deceleration raises doubts about Yes' ability to reach half a million subscribers any time soon, which is the level Liran defined - throughout most of his stint - as the critical mass necessary for the company to survive without infusions from its owners.

Liran's departure is another in a list of top managers looking for "cozier," safer companies with a proven ability to generate cash flows, instead of companies in sectors prized open to competition, that are still suffering birth pangs, or side effects of the bubble days.

Just last week, Dov Kotler announced his resignation from Visa ICC, also a company in a sector recently introduced to competition. He is taking the reins at Union Bank of Israel, a small but veteran institution.

Naturally enough, the moment Liran announced his decision to leave Yes, speculation ran rampant about his contending for the top job at Bank Hapoalim - a big, veteran, rock-steady operation.

The speed at which businesses like Visa and Yes grind down their chiefs does not augur well for the level of competition we may expect in sectors recently forced to accept competition.

You want competition? Yes? You want better service? Yes? You want new companies that will attack the monopolies? Yes? Okay, would you like the quality of life associated with the management of such a company? No? Certainly not if a good job at a more established firm can be had.