P2BW088015-0-W02100-1--------XA 36 BARRON'S March 29, 2010 March 29, 2010 BARRON'S 21 BLACK Larry Ellison Larry Fink Jose Gabrielli Oracle, CEO since ’77 BlackRock, CEO since ’88 Petrobras, CEO since ‘05 Why: Sailing away with the corpo- Why: Asset-management titan is Why: Built a South American oil gi- rate software market. one of Wall Street’s most powerful. ant that rivals Exxon. is friend Steve Jobs may get n the process of building a ose Sergio Gabrielli has one of all the ink and adulation manager of $3.5 trillion in as- the biggest balancing acts in H I J 03/29/2010 these days, but Oracle Chief Exec- sets from zero over a span of two the business world—satisfying utive Larry Ellison is arguably the decades, Larry Fink has turned the Brazilian government, which smartest guy in Silicon Valley. Elli- BlackRock into the preferred part- holds 40% of his energy giant’s son founded Oracle as a database Annualized Total Return ner and purchaser for other com- Annualized Total Return stock, while delivering nice re- Annualized Total Return company and transformed it into One Year 46.4% panies in the industry. One Year 100.5% turns for all shareholders. He One Year 14.7% While CEO 27.2% While CEO 31.6% While CEO 26.6% EE,EU,MW,NL,SW,WE the world’s largest business soft- S&P 500 9.3% When Merrill Lynch concluded S&P 500 0.8% pulls it off with aplomb. S&P 500 0.8% ware concern through a savvy 2010 P/E 14.6 it needed to separate its mutual- 2010 P/E 20.2 Right now, Petrobras is sitting 2010 P/E 11.8 roll-up strategy. German rival 5-Yr. Profit Growth 20.0% fund arm from its retail brokerage 5-Yr. Profit Growth 15.0% atop a huge discovery of oil off 5-Yr. Profit Growth 10.2% SAP recently ousted CEO Leo a few years ago, it sought out Brazil’s shores, and if Gabriellli BLK / NYSE $300 $50 Apotheker and replaced him with ORCL / Nasdaq $30 BlackRock to buy a 50% stake. has anything to do with it, every- PZE / NYSE two co-CEOS in an attempt to 25 And last year, when Barclays 225 one will share in the riches. Not 40 keep pace with Ellison. elected to sell its fabulously suc- that the government won’t be 20 150 30 If selling software and services $26 cessful exchange-traded-fund divi- $223 pushing for a big chunk. Authori- $16 doesn’t turn heads like the latest 15 sion, there was BlackRock again as 75 ties are overhauling state regula- 20 Apple gizmo, Ellison could 10 the buyer, and Fink again proving 0 tions in hopes of steering a 10 scarcely care less. The multi-billion- ’08 ’09 ’10 that another’s necessity could be ’08 ’09 ’10 greater share of oil revenue to ’08 ’09 ’10 aire keeps forging ahead. Having his opportunity. fund social programs. acquired nearly every major business-software company that Fink, who helped found BlackRock and is the only CEO Gabrielli rarely lets up. While other oil and gas exploration fit, Ellison is following through on his surprising entry into hard- the company has ever had, has gone from the studied ano- and refining giants cut spending last year, Petrobras poured P2BW088015-0-W02100-1--------XA ware, with the acquisition of Sun Microsystems. Ellison looks nymity of a trusted institutional player to the overseer of a capital into operations and upped oil production 5%. The re- entirely serious about selling hardware, a move that will pit huge slate of retail financial products. His success has sult: Its shares have outshone those of many large, inte- him squarely against partner Hewlett-Packard. prompted increasing chatter that he might one day be the grated energy peers over the past year. Some think Ellison has finally met his match. But Ellison, U.S. Treasury secretary, or CEO of one of the giant Wall A former economics professor, Gabrielli has clearly done whose yacht earlier this year won the America’s Cup race off Street banks. Yet Fink has made a prominent and enviable his homework. Now, with oil near $80 a barrel, he may go to the coast of Spain, isn’t accustomed to losing. —M.V. place for himself right where he is. —M.S. the head of the class. —Dimitra DeFotis Reed Hastings Mark Hurd Steve Jobs Netflix, CEO since ‘97 Hewlett Packard, CEO since ‘05 Apple, CEO since ‘97 Why: Repeatedly beats the odds Why: Consummate manager has Why: From iPods to iPads, he mints while building a DVD empire. HP humming. money for shareholders. P2BW088015-0-W02100-1------- etflix’s death has been pre- ark Hurd is ready to f you’re going to compile a list BLACK N dicted countless times. The M pounce. Rather than just I of the most respected chief ex- company’s DVD-by-mail business cut headcount at Hewlett-Pack- ecutives on the planet, the obvi- was supposedly doomed by Block- ard during the recession, Hurd ous person to start with is Steve buster’s and Wal-Mart’s entrance cut employee pay across the Jobs. His career has been cine- into the market. Wrong: Wal- Annualized Total Return board, including his own, to Annualized Total Return matic: Co-founder of Apple, he Annualized Total Return Mart abandoned the business, One Year 69.7% make sure the company had One Year 81.6% was forced into exile, then re- One Year 118.7% While CEO 33.2% While CEO 21.7% While CEO 34.4% and Blockbuster appears to be S&P 500 3.1% enough people to deploy when S&P 500 2.1% turned to triumphantly rescue the S&P 500 3.8% teetering on the edge of bank- 2010 P/E 28.3 the time came. 2010 P/E 11.6 pioneering computer company 2010 P/E 18.3 ruptcy. More recently, Netflix was 5-Yr. Profit Growth 37.0% The time may be now. Hurd re- 5-Yr. Profit Growth 23.0% from near-collapse, building it 5-Yr. Profit Growth 61.0% supposedly threatened by the cently upgraded the company’s back into one of the most influen- $80 $60 $250 emergence of Web-based video. NFLX / Nasdaq outlook for this year, and he’s HPQ / NYSE tial forces in American culture. AAPL / Nasdaq But Netflix has become a key pro- 60 clearly itching to put into full ac- 50 The Mac was and remains bril- 200 ponent of the technology, effec- 40 tion the HP he has refashioned in 40 liant, but it was just the begin- 150 tively offering the Web’s only sub- his five-year tenure. $53 ning. With the iPod, iPhone, $229 $74 30 100 scription-based streaming video 20 Taking advantage of HP’s posi- iTunes and the App Store, Apple 20 50 service. 0 tion as the world’s largest seller of has forced dramatic changes in ’08 ’09 ’10 The latest threat: Redbox and ’08 ’09 ’10 personal computers and printers, the music, movie and wireless ’08 ’09 ’10 the $1-a-day kiosk-based rental business. But through it all, Hurd has used vast economies of scale to cut production costs businesses. With the iPad and the iBookstore, he’s taking on Netflix just keeps growing. In an interview, Hastings notes below those of rivals like Dell. Practicing what he preaches, the rest of the content industry, including textbooks, best sell- that half of its subscribers have begun using its streaming Hurd has consolidated HP’s own computer systems across the ers, newspapers and magazines. (And , don’t forget, as a video. Yet, he says his company will be shipping DVDs by mail globe to serve as an example of efficiency to customers. founder of Pixar, he helped transform film animation.) Jobs for at least another 20 years. An accomplished tennis player in college, he relishes the has done all this despite battling pancreatic cancer and un- And there’s still huge growth potential. Later this year, competition with other makers of enterprise computing gear. dergoing a liver transplant. Netflix will add one more country (yet to be disclosed) to its Opponents are on their toes waiting for his next move. Might While not universally loved—Apple employees revere but fear service area, boosting the total number of nations it does he snap up one of several flailing smartphone makers? Per- him—he’s a one-of-a-kind black-turtleneck-wearing manage- 999843_999858 Bloomberg News business in to…two. —E.J.S. haps, but but only at a smart price. —M.V. ment genius. America could use 1,000 more like him. —E.J.S..