Up to a point, Macer's interaction with the Texarkana business community parallels the plot of
The Music Man, a popular Broadway musical in which a charming mountebank bewitches a small Iowa town. But Macer had no beautiful librarian to fall in love with him and reform him, as "Professor" Harold Hill had in the musical. And unlike the 1912-era residents of mythical River City, Iowa, modern-day Texarkanans had the Internet and Google, and used them to check up on Macer instead of taking him at face value.
And before you ask: No, Macer is not affiliated in any way with the Open Source Initiative (
OSI) nor does he have permission from them to use their initials as part of his business's name.
How NewsForge got involved
After Macer was quoted in the NewsForge story mentioned above and readers added comments to it that cast doubt on some of his statements, reporter Jay Lyman wrote
another story about Macer a week later. Here's a key quote from the second OSI Hosting story:
When asked about number of paying customers and number of servers for OSI Hosting, Macer said the company has 8,428 customers using a total of 12,175 servers on its dedicated hosting side and 380 customers of its collocation hosting. Adding that an additional 485,000 square feet of facility space is scheduled to open in December, Macer also indicated that OSI Hosting had been assembled and rolled out rapidly.
"Because OSI has been pulled together so quickly, and yes haphazardly, we were not able to get everything done on time," said Macer, who claims OSI is not reselling EV1, but is simply running its OSI Hosting sites on three servers with EV1, which again declined to comment.
At this point, we felt the two stories and the accompanying reader comments had cast enough doubt on this small-time operator that we were through with him. (And yes, I consider even negative reader comments to be
vital additions to our stories.) But last month, we received this email from Jason Macer:
I request that the article entitle "How SCO Launched an Open Source Company,"
by Jay Lyman, be removed.
Thank you.
Jason Macer
Chairman/CEO
OSI Hosting.net, INC
We refused to remove the story. A brief round of email correspondence with Macer followed, with this exchange as its culmination:
Robin, I do understand this, however Mr. Lyman, was not
accurate in his reporting, and this could be considered
as defamation of character. You yourself got several
"bad reviews in regards to the story."
It would be beneficial to both parties to see it removed.
Jason Macer
Chairman/CEO
OSI Hosting.net, INC
-----Original Message-----
From: Robin 'Roblimo' Miller
Sent: Tuesday, March 22, 2005 9:20 AM
To: Jason macer
Jason macer wrote:
>> We are still waiting on confirmation if you guys are
>> going to remove the story entitle "How SCO Launched an
>> Open Source Company," by Jay Lyman. This is a request,
>> however we would like to see this handled as
>> soon as possible
Dear Mr. Macer:
This got bucked up to me for a reply.
We take the "journalism as first rough draft of history"
aspect of our job rather seriously, so we don't remove
stories because someone wants to change the record of
their or their company's past.
Robin 'Roblimo' Miller
Editor in Chief, OSTG
Favoring the "little guy"
I think part of the reason we (and others) were easier on Macer than we should have been is that we all like to see a young entrepreneur with a small company succeed. But in this case the discrepancies between what the young entrepreneur said and observable reality soon became too great to ignore. For example, Macer claimed to a number of people in Texarkana that Novell was backing him financially, while Novell people we contacted told us this was not true.
Macer explained this discrepancy away in a telephone interview by saying all agreements he had with Novell were under NDA.
He said the same when asked about his claimed relationship with IBM. And about virtually every other business relationship he had, including his lack of willingness (or ability) to tell us the names of any of his hosting clients. And as far as the fact that he'd claimed thousands of servers and customers as his own when it seemed he really only had a few colocated servers at
EV1, he explained that away during our phone conversation by saying he
would have had all those servers and customers if a software developer named Davey Shafik and several of Shafik's friends had completed work Macer paid them to do.
Shafik tells a different story. He and I talked by phone, but rather than look at quotes from that conversation, you might as well read
Shafik's written description of his relationship with Macer. It's a four-part tale any young coder thinking about moving to a new town to work for an unknown person or company ought to check out. To sum it up, it appears Macer never paid Shafik or his fellow coders despite repeated promises to do so -- and despite claims that he had so many millions of dollars in hand that the amount owed to the coders could have been paid out of petty cash.
Macer says over and over that it's not his fault that he really didn't have the money he told Shafik he had, but it was the coders' fault, plus Macer claims well-known credit card processor
Card Service International did him dirty and didn't pass customers' payments on to him they way they were supposed to.
None of the other 800 (or so) employees Macer claimed he had last year have come forward to say they weren't paid, which either means they were all paid or, more likely, that they never existed. One assumes that these hundreds of people would have had to work somewhere, presumably in the giant Dallas facility Macer claimed he owned -- but that a Dallas-area police officer found to be a locked-up, abandoned building.
Internet research plus old-fashioned detective work in Texarkana
Naturally, when Texarkana residents heard that this glorious-sounding company, OSI Hosting, was going to open a huge operation there and employ thousands of people, they didn't want to do anything that would derail this plan, especially after UPN-21 TV in nearby Shreveport ran
this story on March 22, which was nearly identical to one that ran on
KTBS the same day.
But Aaron Brand, business reporter for the Texarkana Gazette, was more skeptical than local TV reporters. He called chambers of commerce in Dallas, Austin, and other cities where OSI Hosting claimed to have facilities, and became suspicious when they hadn't heard of a business that claimed to have hundreds of employees and many millions of dollars in annual revenue. When he finally wrote about OSI Hosting,
his story ran under the headline, "A grand illusion?" with a sub-head that said, "Computer plant plans creates sizzle, fizzle."
In Brand's story, which he wrote with help from Gazette coworkers Jodi Sheridan, Paige Milton, and Lisa Bose McDermott, Macer is quoted as saying he couldn't meet with local business leaders and city officials on Thursday, March 24, because he was speaking at "a computer-related conference in Utah." In several conversations with private individuals in Texarkana, Macer identified this conference as Novell's annual Brainshare event.
NewsForge staff reporter Joe Barr was
reporting from Brainshare that week and didn't see Macer there. Novell conference organizers told Barr that Macer was not on their speakers list and hadn't signed up as an attendee. In other words, once again Macer's words did not reflect reality. And, after some of the pointed questions we asked Novell people about their relationship with Macer's company, they removed an OSI Hosting "partner" page from their Web site.
Several Texarkana business people emailed NewsForge to get our take on OSI Hosting. Better yet, Texarkana lawyer Tommy Johnson had his in-house investigator do some old-fashioned gumshoe work by calling a cop friend in Dallas, who went and physically looked at the building Macer claimed as his headquarters -- and found that it was mostly abandoned and chained up. And Johnson's legal assistant, Mona Rigdon, put us in contact with Steve Oglesby, a local gentleman in the computer business who had been
following Macer's activities on his blog.
When Oglesby and I first talked, he worried that I would portray Texarkana as a town full of yokels who got taken in by a scammer. But what really happened is that the citizens of Texarkana -- aside from a few over-eager TV reporters -- did their
due diligence and decided that Macer's plans were fantasy, not reality.
Even the local TV stations finally got around to doing some
actual reporting on OSI. But Oglesby's blog and the Texarkana Gazette's Aaron Brand did the real reporting work here. This was
their story, and it was
their local concern, and they handled it exactly right.
NewsForge did a little checking too. We got a Dun and Bradstreet financial report on OSI Hosting that showed less information (and fewer assets) than you'd expect from a two-chair beauty salon. We also asked Dmitri Ereshenko, a Web hosting industry expert, to take a look at OSI Hosting and traceroute its servers. He determined that there was no way Macer's claims of thousands of customers and hundreds of employees could be true; that no matter what he said he was simply reselling space on a few boxes at EV1.
Why waste so much time on a small-time guy?
This story really isn't about Jason Macer. It's about using high-falutin' tech-speak and talk of Linux and open source and other hot-sounding technologies to get unsophisticated people excited to the point where they drop their natural caution and believe, against all odds, that some of the old dot-com magic can rub off on them.
Jason Macer himself was only important for a few moments, and only in Texarkana and nearby communities. But there are other people like him all over the world, and many of them are smoother and more sophisticated than Macer. Whether you're in Texas or Moscow or anywhere else, when someone makes you an offer that sounds too good to be true or promises more than he can deliver, a big yellow "caution" flag should go up in your mind.
The motives of the person making the unfillable promises don't matter; one might do it for personal gain, while another might do it because he wants to feel important. In either case, do a little basic research before getting enthusiastic. That extra step can save you from the financial pain Davey Shafik and his fellow developers suffered at Macer's hands, and can also save you from the roller-coaster ride of false hopes Macer put people in Texarkana through.
Of course, if we believe Macer, everything that's happened was someone else's fault, not his, and if we just wait a couple of weeks he'll have huge deals to announce that will make us all believe in him again. But we'll let him tell you more about that in his own words. The next page of this article is the transcript of a phone conversation I had with Macer on April 12, edited down to about two-thirds of its original length to eliminate repetition and extraneous conversation.
Next: A conversation with Jason Macer
This is my brother Darl...
Posted by: Anonymous Coward on April 25, 2005 07:44 PMAnyway, it sure sounds like Jason and Darl are related.
Does Jason own UNIX too? We will never know because I am sure there is an NDA... So, what is Darl's excuse for not showing the code today?
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