Today in Tech: Is Infosys a victim of Halo Effect; Facebook; Marissa Mayer

Is Infosys a victim of Halo Effect?

In a McKinsey Quarterly essay The halo effect, and other managerial delusions (and in a book by the same name) Phil Rosenzweig, an IMD professor writes about how Halo Effect – a tendency to make specific inferences based on a general impression - manifests itself in business press. He argues that if a company is performing well, we tend to think that it has great leaders, a vibrant culture and superb customer focus and so on; and if it is not, we tend to think its leaders are inept, its culture is bad and it doesn’t care about customers etc. A company’s performance, good or bad, he writes, “creates an overall impression—a halo—that shapes how we perceive its strategy, leaders, employees, culture, and other elements.”

In 2008, when Infosys said No to Axon, refusing to indulge in a bidding war with HCL Tech beyond a point, analysts and reporters generally saw it as a sign of discipline, its ability to restrain itself from an endeavour if it did not make financial sense. Today, Economic Times has a report that says Infosys was close to acquiring an European payments company Clear2Pay for $500 million - but did not go ahead. The usage of words in the lead is probably a good example of Halo effect. It says: Infosys came tantalisingly close to a European acquisition last month but developed cold feet at the last minute.

I am willing to bet that it would have been attributed to financial discipline - instead of cold feet - if Infosys is beating market expectations right now. But then, we also have to remember that, for long, Infosys was a beneficiary of a positive halo effect. Journalists flocked to Infosys executives for their views not just about the company performance, but also on everything under the sun. Even a couple of years back, Infosys founder NR Narayana Murthy could hardly meet a contingent of journalists without facing the question about his becoming India’s President.

Facebook’s declining user base

Facebook’s shares dropped after a Capstone report said Facebook’s user base in US declined by 1.1% in the last six months. In UK, there was virtually no growth during this period.

India offered something better. The user base here grew by 20%, according to the report. However, in India, as my colleague and I noted in our story a few weeks back, the concern is about converting its user base into revenues. It’s small now, and the growing mobile usage is likely to put additional pressure.

We can trust Facebook to come up with something soon. A few days back Mark Zuckerberg said his hardest job right now was to figure out how to adapt Facebook to mobile devices.

More on Marissa Mayer, Yahoo's new CEO

Marissa Mayer and work-life nirvana: Reuters

Marissa Mayer Is in Over Her Head: Slate

Mining Marissa Mayer's Googly Past For A Glimpse At Yahoo's Future: Fast Company

The Ultimate Googler Is Yahoo’s Ideal CEO: Wired

Can Marissa Mayer save Yahoo? : New Yorker

Also of interest

• How Big Data will fuel a new age of TV: Venture Beat
• Win a chess match, earn a $1,000,000 investment in your startup: Venture Beat
• How to win the tech talent war: Fortune
• How the world's biggest companies are doing social media: Cnet
• IBM Supercomputer Simulates Common Cold Virus: Popular Science
• Physical assault by McDonald's for wearing Digital Eye Glass: Dr. Steve Mann's blog
• New York City Seeks Smaller, Smarter Apartments: Earthtechling