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BusinessWeek: January 10, 2000 |
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In Business This Week: Headliner
Gregory Maffei: Lots More Money to Count Maffei's number-crunching prowess helped turn Microsoft into a financial powerhouse. Since 1997 its market capitalization has quadrupled, to $600 billion, and its cash on hand has nearly doubled, to $19 billion. Maffei, who could not be reached for comment, engineered the program for delaying recognition of a chunk of Microsoft's sales each quarter, and amassed a rainy-day fund of $4 billion to smooth earnings. After six years with the company, Maffei is a multimillionaire. But he could step up into the billionaire leagues via Worldwide Fiber's eventual initial public offering. Back at Microsoft, Maffei's vacant shoes will be filled by former head of corporate sales John Connors. Return to top  What Am I Bid for These Old LPs? How much are you willing to pay for your neighbor's hedge clippers? Or an old blender? On Dec. 27, priceline.com, the name-your-own-price Web site, revealed plans to launch Perfect YardSale, a new Web site to hook up individual buyers and sellers. Although it may sound like the Net auctions of eBay or Yahoo!, priceline.com offers a twist. Buyers list what they want and how much they're willing to pay, and they must provide credit-card information to show they're serious. If priceline.com finds a willing seller, the two sides meet to close the deal. Unlike airline tickets, groceries, and other priceline.com staples, buyers get a chance to rescind their offer and even return the goods within a week of purchase. Return to top A Helping Hand for FDA Gumshoes Since 1994, the Food & Drug Administration has been struggling to cope with abuses arising from the sale of drugs over the Internet. But the explosive growth of drugstore sites--now estimated at more than 400--has overwhelmed the agency. On Dec. 28, the Clinton Administration announced a plan to help the FDA keep up. The Administration will provide $10 million to identify and shut down sites that illegally sell prescription drugs without a doctor's order. The government will also levy fines of up to $500,000 for those convicted of selling drugs online without prescriptions. Return to top Check Out This Gross Income In the era of internet mutual funds and 200%-a-year returns, who would have guessed that the highest-paid mutual-fund manager is a bond buyer? William Gross stands to earn $39.8 million a year over the next five years when his firm, PIMCO Advisors, is acquired by German insurer Allianz, according to papers filed with the Securites & Exchange Commission. Gross, perhaps the only marquee name in bond funds, is the country's best fixed-income manager, and keeping his services is key to the $1.9 billion acquisition. Return to top These Jailhouses Didn't Rock Maybe the inmates are in charge of this institution: Just two years after spinning off from its prison management business so it could convert to a real estate investment trust, Prison Realty Trust announced a restructuring on Dec. 27 that included giving up its REIT status and merging back into Corrections Corp. of America. Prison Realty Trust, which owns the prisons that CCA operates, had seen its finances hammered by delays at new prisons and a liquidity squeeze as Wall Street turned cool to REITs. As part of the revamp, private investors led by the Blackstone Group will inject $350 million into the company. Return to top | |
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How AOL Wipes Out the Competition Computer owners who have upgraded to the new America Online 5.0 version of the online giant's software without paying attention during setup have been surprised to discover a feature they may not have wanted: It can wipe out previously installed Internet service providers. Users are asked if they want AOL to be their default ISP. Clicking "yes" disables existing ISPs on their computer. Consumer advocates say AOL should spell out the consequences better, but AOL says the question is clear, and clicking "O.K." rather than "yes" keeps original settings. About 7 million users have tried 5.0 with few gripes, says AOL. Return to top Et Cetera... -- Nextel Communications dropped its $8 billion bid to buy NextWave Telecom. -- The Securities Industry Assn. says brokers' 1999 profits hit $12.6 billion, up 29%. -- Fairchild Aerospace agreed to be acquired by Allianz and a U.S. investor group. -- DaimlerChrysler's 1999 sales were up 12%, to $150 billion, thanks to strong car sales. Return to top Radio Days Sirius Satellite Radio, a pay-radio service for automobiles, shot up 17%, to 36 1/8, on Dec. 27 after Blackstone Capital Partners invested $200 million in the New York company for a 10% stake. Launching next year, Sirius plans to offer 100 niche radio stations with CD-quality sound to drivers who subscribe. After the deal, the stock of rival XM Satellite Radio hit a high of 39 1/8. It seems the market thinks there's nothing good to listen to in the car these days. Sirius closed Dec. 28 at 36 5/8. Return to top  Return to top |
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