Jose Antonio Vanderhorst-Silverio | Jan 19, 2010
EnronOnline's goodwill and Enron's goodwill were not only inseparable, but mutually reinforcing to each other. That is the synthesis of an introduction to the EWPC article Is Google the New Enron?, whose summary states:
Even though a debate has already reaffirmed without doubt that “The answer should be a strong NO!,” there is additional evidence and requirements to support the “strong NO!” answer.
With his typical approach in this type of situations, Mr. James Carson wrote a post under the mentioned article by selecting my assertion “Even though Mr. Carson and all readers of the discussion now know that Enron's problems were related with EnronOnline,” and responded that “No, we "know" no such thing. I take exception to this tactic. Frankly, I should never have responded to your nonsense.”
However, the very simple logic behind the idea of a YES, we know thatEnron's problems were related with EnronOnline, is in the well understood meaning of “goodwill,” which according to the Webster’s American Dictionary is “an intangible, salable asset arising from the reputation of a business and its relations with its customers.”
Mr. Carson is a very intelligent and important person, which I respect very much for all the help he has done, expending repeatedly a lot of time and effort debating with me what emerged as the Electricity Without Price Controls Architecture Framework. Thank you very much once again Mr. Carson.
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Comments
There is no need to confirm, nor disconfirm, whether or not Bobby Joseph Fontaine told the truth about that "EnronOnline was associated with their MTBE refineries," to establish that Enron and EnronOnline were mutually dependent on each other.
According to Ken Peasnell, Professor of Accounting and Finance at LUMS and an expert on Corporate Governance, "From 1985 to 1999 Enron's net income rose from $125m to $893m; its market value grew from £2bn to $50.5bn." So Enron was well established and respected before EnronOnline made its first transactions in 1999. So, Enron and EnronOnline growth were the result of a virtuous circle that was trigger by Enron's credibility.
In addition, according to the Computerworld article "UBS snags Enron's online assets - But faces challenge of winning back customers," by Michael Meehan, published on January 21, 2002, "many experts considered the trading operations to be the keystone in Enron's one-time position as the seventh-largest company in the U.S."