What is Exxon?

Monroe Rathbone warned that the industry rush into petrochemicals would lose money for many companies, and vowed Exxon would not be among them.

“Petrochemicals have become fashionable to enter. Everybody and his brother, for example, seems to be making polyethylene. But this dashing into chemicals is going to lose a lot of money for some companies, because petrochemicals are not a guaranteed gold mine ... And it won't be us.”

Wang Labs EVP John Cunningham on the near-impossibility of integrating unrelated small companies into a coherent business.

“If God himself came down in a junior businessman's uniform, worked very hard for three years, and got very lucky, he'd still have a tough time pulling those companies together.”

Exxon's own marketing division, forced to dogfood its in-house office equipment, returned it after one year and went back to Wang computers, a damning internal verdict on product quality.

“They were eventually forced to take Exxon equipment but returned them a year later.”

Exxon's ownership of Zilog made IBM refuse to use the Z80 chip for its PC, showing that corporate parentage, not just technical merit, shaped early PC platform choices.

“Exxon's status as a competitor by the way guaranteed that IBM would not choose the Zilog Z80 to power the PC.”

The Jones Report's core argument was that oil and gas had ceased to be a growth business, meaning future investments would yield ever-worsening returns, not that Exxon should exit the sector entirely.

“The Report's most striking argument was that oil and gas wasn't a growth business anymore. That didn't mean it was time to leave oil and gas behind - though it did suggest that the company exercise more prudence in its oil investments. It meant that future opportunities in oil and gas will show ever-worsening returns.”

Yankee Group forecast pegged the total IT market at $150 to $200 billion by end of the 1980s, with Exxon projected to capture 10 percent of that.

“Yankee Group forecasted that the whole IT market would be worth $150 to $200 billion by the end of the 1980s and that Exxon could capture 10% of that.”

Exxon's overfunding and over-directing of Zilog backfired because Zilog's inexperienced managers lacked the standing to resist bad strategic directives from a corporate parent with no tech expertise.

“The oil giant gave them too much money and too many directions. It got Zilog into things they shouldn't have done, and their young managers didn't have the experience to know when to push back.”

Exxon Enterprises, the oil giant's 1970s tech venture arm, is worth tracking as a cautionary case study in large incumbent diversification into nascent tech markets via acquisition.

“When asked about the long term plan in 1976, Exxon managers said that there was no "grand scheme or master plan" but it did seem like they wanted to get a few $100 million companies together in the portfolio.”