UPDATE: Carbonite is taking a hit on the markets for its decision to pull advertising from Limbaugh’s radio show:
Carbonite is between a rock and a hard place. Reversing the decision will infuriate the left, and do little to persuade the right that it’s a firm to be trusted, yet sticking to the decision is likely to drive the value of the stock into the ground. Business schools will use this as a teachable moment not to Rush to hasty decisions. See what I did there?
This post isn’t about global warming. But it has a carbon theme, sorta.
There’s a fuss south of the border about whether or not radio host Rush Limbaugh insulted a woman who figured the government owes her free contraception. Limbaugh apologized for the name he called her, so it seems even he agrees he went too far. She refused the apology, as is her right. Fair enough. Their spat is not what this post is about, what happened next is.
The left went after Limbaugh’s advertisers, including data back-up company Carbonite, who quickly caved to the pressure:
I’m a Carbonite customer and just renewed my subscription for the third time at Christmas. But now I’ve disabled the auto-renew option and will find some other provider for my future data back-ups. Because data security is what I pay for, and I no longer trust Carbonite to provide it.
I’m not dropping Carbonite because it pulled advertising from Limbaugh, that’s its right, whether or not I agree with the decision. But its decision tells me something about the company, and it’s nothing good.
If Carbonite folds like a cheap suit to demands from a few noisy and noisome voices, how long do you think they’d put up a fight if the government wanted to look at what it has on its servers? If management is afraid of a few horny hippies looking for free lube and rubbers from Uncle Sam, how will they respond if Uncle his own self shows up at the door and asks them to bend over?
It’s not as if Carbonite is in any financial position to put up much of a battle:
Based on information available as of February 9, 2012, Carbonite is issuing guidance for the first quarter and full year 2012 as follows:
- First Quarter 2012: The company expects total revenue for the first quarter to be in the range of $18.2 million to $18.4 million and non-GAAP net loss per common share to be in the range of ($0.32) to ($0.33). Carbonite’s expectations of non-GAAP net loss per diluted common share for the first quarter exclude stock-based compensation expense, patent litigation expense, lease abandonment charges and amortization expense on intangible assets and assume a tax rate of 0% and weighted average shares outstanding of approximately 25.2 million.
- Full Year 2012: The company expects 2012 total revenue to be in the range of $83.3 million to $84.8 million and non-GAAP net loss per diluted common share to be in the range of ($0.82) to ($0.86). Carbonite’s expectations of non-GAAP net loss per common share for the full year excludes stock-based compensation expense, patent litigation expense, lease abandonment charges and amortization expense on intangible assets and assumes a tax rate of 0% and weighted average shares outstanding of approximately 25.4 million.
The unforced error from Carbonite is hardly of Gleick-ian proportions, but it’s an own-goal, just the same.