At UCLA, I sometimes teach at the business school. Â As far as I know, until recently the business schoolÂ curriculum has not emphasized how companies influence government policy to create “rules of the game” that help that company. Â So, in the case of Google or Facebook, what policies can the Obama Administration enact that will help them or hurt them? Â I started to think about this after reading today’s NY Times article about Sheryl Sandberg’s huge payoff from the Facebook IPO. Â She is clearly a brilliant Harvard person (She was one of Dr. Summers’ stars) but what does she do for Facebook? Â How big a part of her job is connecting with government VIPs? Â $1.6 billion is a big payoff. Â I know she was an Econ major at Harvard. Â How much of her success is due to her wise choice in majors? Â Â Economists have estimated the value of political connections to firms. Â Here is one of the best studies by Ray Fisman.
My theory is that Google and Facebook are well aware that Microsoft under-invested in “playing nice” with Washington in the early 1990s and they are determined to not make the same mistake.