Standing by Your Billions

Look at other research pioneers with a good idea and skin in the game. On Oct. 26, Amazon CEO Jeff Bezos saw his net worth plunge by $2.5 billion, as shares fell 12.8 percent. Bezos, 47, owns 19.5 percent of the company.

The game stiffens the backbone

Skin in the game stiffens the backbone. Other research pioneers have experienced similar setbacks along a difficult path. Near 20 years ago, Bill Hewlett and David Packard, having left management, took huge poundings when HP missed third-quarter estimates.

By contrast, someone such as ruthless, Steve Jobs, died with most his of his net worth invested in Walt Disney Co., not Apple, however that was in some cases because he sold his Apple shares afterwards he was fired because of disgust was CEO John Sculley. At the time he made another pile selling his Pixar to Disney. Jobs died with Apple shares valued around $2.2 billion, compared with his Disney shares valued around $5.2 billion.

Does anyone doubt Jobs would have acted any differently steering Cupertino, Calif.-based Apple differently even if he had owned half the company? He co-founded it, in short.

Ellison, Bezos and Jobs are good illustrations of the innovation pioneer with courage of conviction. So are some others like Michael Dell, who once stepped out of management and returned to Dell in 2007 when another CEO messed up.

Even if they are being sold below cost, Bezos wants to hook his clients on them and all the accompanying services like Amazon Prime, which have vast recurring revenue streams, just like Apple with iPad2.

The total economics which include the device

"We look at the total economics which include the device, the accessories, the content as then as any ad-based revenue as we think about the lifetime value of the device. And we like what we see," said Amazon CFO Tom Szkutak on the revenues call.

Ellison, similarly, is trying to position Oracle against IBM and HP in the advanced end of computing, storage and processing for the cloud. Having bought Sun, which had before acquired industry pioneer StorageTek, Oracle can be competitive. The same holds for its purchases of analytics firms like Endeca Software, Hyperion Software and others, using its cash pile which most recently rose to $31 billion.

To be sure, execution is another matter. Nevertheless given the nature of the business, research won't go very far without it.