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BusinessWeek: January 24, 2000 |
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In Business This Week: Headliner
Paul Clayton: The Burger King Abdicates Clayton is credited with turning around Burger King's U.S. operations by shifting the focus back to burgers during his three years at the helm. "There was a period when we were trying to sell pizza and shrimp," he says. Now, he must persuade Americans to put down the Whopper and slurp a Kiwi-Berry Burner instead. "From a nutritional standpoint, the companies are different," concedes Jamba Juice founder and Chairman Kirk Perron, 35. "But Paul is a passionate guy who shares our vision." A Mango-A-Go-Go, anyone? Return to top  Microsoft: To Split or Not to Split Does the justice dept. want to break up Microsoft? On Jan. 12, the agency shot down a report that it wanted to split the company along the lines of its business units--with operating systems separate from applications, and possibly a third Net-related company. But two sources who have spoken to Justice lawyers told BUSINESS WEEK the feds are leaning toward a breakup remedy. That's because Justice is starting to conclude that behavioral remedies, barring specific market practices by Microsoft, won't work--since monitoring Microsoft's everyday conduct would be impractical. "They are floating ideas," says one well-connected industry source who has spoken to the government team. Return to top Boeing Is Buzzing around Hughes Boeing is ready to reach deeper into space. The leading maker of commercial aircraft is close to acquiring Hughes Electronics' satellite-manufacturing business for about $4 billion, sources close to Hughes said. "We want to focus on the expansion of high-growth satellite service businesses which are growing two to three times as fast as satellite manufacturing," a source said. The division, Hughes Space & Communications, had sales last year of $2.3 billion, about one-third of Hughes' total business. Return to top Allstate Calls It a Day in Japan Only months after opening its doors there, Allstate is leaving Japan. The Northbrook (Ill.) insurer plans to close its Japanese auto insurance business rather than invest in expansion at this point. "We didn't want to get far into it and have a big boatload of customers before making a decision," says spokesman Jim Dudas. The group has only sold about 950 contracts since setting up in northern Japan last April, and expected losses to continue as it built operations. But fiscal restraint is pre-empting expansion--two months ago, Allstate said it would save $600 million a year by cutting 4,000 job positions. So Japan will have to wait for the "good hands" people. Return to top | |
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Rite Aid Still Has the Sniffles Rite aid hasn't shaken its bad case of accounting woes. On Jan. 11, the drugstore chain said it may not file financial statements until July 11. Rite Aid's new managers and its auditors may need that long to finish reaudits for the last several years and the current fiscal year ending in February. The company's borrowing costs may also go up if, as expected, the sale of its PCS Health Systems unit isn't completed by mid-February. "Whenever you think things could be getting better with this company, things get worse," says Warburg Dillon Read analyst Steven Valiquette. Return to top A Polymer Payday for Farmers? Ah, those amber waves of plastic. On Jan. 11, Dow Chemical and food giant Cargill announced a $300 million venture to turn wheat and corn into a "natural," biodegradable plastic. The stuff is made by first employing microbes to process the sugars from plants, then linking the resulting lactic-acid goo to polymers. The product can be used in everything from clothes and diapers to soda bottles and furniture. Executives at the Cargill Dow Polymers joint venture are betting that the plastic will insulate them from fluctuations in the price of oil, increase farmers' incomes, and win over the ecology-minded. A factory will begin production next year in Blair, Neb. Return to top Et Cetera... -- Despite a record year, Joe Roth resigned as Disney Studio chief. -- McKesson HBOC will sell its bottled water unit to Danone for $1.1 billion. -- Drugstore.com will buy cosmetics e-tailer Beauty.com for about $42 million in stock. Return to top Concentric: No Also-Ran As the market weighs the America Online-Time Warner combo, there is little ambiguity about another deal announced the same day. When telecom startup Nextlink Communications revealed on Jan. 10 it would buy Internet service provider Concentric Network, shares in Concentric shot up 32%, to a high of 39 10/16. Analysts applauded the linkup because it will allow the companies to offer voice and data services under one roof. Concentric closed on Jan. 12 at 37 7/16. Return to top  Return to top |
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