Up Front
EDITED BY SHERIDAN PRASSO
Talk Show
"Since we're here in Orlando, I would say Mickey Mouse and Goofy could have done as good a job running this company" -- A shareholder to Lucent CEO Henry Schacht at the annual meeting
Did Microsoft Catch a Break?
The Bush administration has had a perhaps unintended impact on the Microsoft case--one that may help the computer giant get at least some of the rulings against it reversed by a federal appeals court, Justice Dept. sources tell BusinessWeek.
The sudden departure of the last senior Clinton official with intimate knowledge of the case led to turmoil and inaction at a critical juncture in the appeal, the sources say. But it didn't have to happen. The Bush transition team had at first said Douglas Malemed, acting head of the Antitrust Div., could stay until Bush's team was in place. But on the inauguration's eve, it reversed that and ordered him out--immediately.
The result was not pretty (page 48). Justice lawyers before the appellate panel Feb. 26-27 were unable to answer basic questions and confused important precedents. "The government's case really suffered as a result," says one official. Would a more professional showing have had more success?
By Dan Carney
Such Intimidating Prices on eBay
Racing legend Dale Earnhardt's death has cast a pall over NASCAR, but it's triggered a frenzy for Earnhardt memorabilia. On eBay, autographed 8x10 glossies of the Intimidator that were fetching $15 to $20 before the Feb. 18 fatal crash are now being offered for up to $760, while die-cast cars have soared from $60 to $300. "It's the nature of the memorabilia business that prices go up when something terrible happens," says David Phillips, a North Carolina-based dealer of NASCAR memorabilia such as driving suits, engine hoods, and fenders. Phillips himself posted Earnhardt items on eBay after the crash, at, he notes, "less than double" what he had earlier charged.
For sponsors and dealers, Earnhardt's death has created a dilemma: how to honor his memory without looking like they're cashing in on his death. Coca-Cola bottlers quickly pulled TV ads featuring Earnhardt--even as thieves from Ohio to South Carolina were flopping Coke vending machines bearing a life-size image of Earnhardt onto flatbed trucks. One was offered on eBay for $12,000--with no bids--although three life-size Earnhardt photo-fronts pried off the machines got bids of as much as $450.
ConAgra Foods, which had just manufactured a promotional run of Van Camp beans in cans bearing Earnhardt's likeness, says it destroyed more than 100,000 cans just before they were scheduled to be shipped. Don't be surprised if a few nonetheless mysteriously show up on eBay.
By Ushma Patel
Nike Trips over Its Laces
What started as a joke by an MIT grad student has become a prank heard round the world and a public-relations headache for Nike. In January, Jonah H. Peretti, 27, visited Nike iD, a Web site that lets sneakerphiles personalize Nikes with colors and a 16-character message. Peretti picked "sweatshop."
Nike balked. It e-mailed Peretti with its formal rules for printing messages. In a series of increasingly comical exchanges, Peretti replied that "sweatshop" transgresses none of Nike's rules. Nike finally cited another one: It doesn't have to print anything it doesn't want to.
Peretti sent the e-mails to about 10 friends. It was quickly forwarded. And forwarded. "I thought it was funny," he says. Now he receives 500 e-mails a day from around the world, many vowing to boycott Nike. He estimates two million people have read it.
What could Nike have done differently? The company says nothing. But PR experts cringe. Nike might have said that "`sweatshop' makes light of a serious issue," says Tracy Tierney, a Richmond (Va.) PR consultant.
Nike is waiting for the prank to blow over. But that may take a while. A new report by Nike's self-policing body, Global Alliance, confirms worker abuse in its Indonesian factories--something Nike vows to address.
By Roy Furchgott
Ways to Trigger an IRS Audit
The behavior and why it's risky
MATHEMATICAL OR FACTUAL MISTAKE (LIKE A WRONG S.S. NUMBER)
IRS figures that obvious errors indicate more subtle ones.
YOU DIDN'T DECLARE SELF-EMPLOYMENT INCOME FOR WHICH YOU RECEIVED A 1099
The feds are getting good at computer cross-checking.
YOU EARNED OVER $100,000
That gives you a 1-in-100 chance of audit, whereas for taxpayers overall the risk is less than 1 in 200.
YOU WROTE A PROTEST NOTE ON YOUR RETURN
The IRS is not known for winking at criticisms.
YOU'RE PASSING OFF A HOBBY AS A LOSING BUSINESS
Declaring a loss year after year will red-flag your return.
Data: Taxes for Dummies, by Eric Tyson and David J. Silverman. IDG Books: 2001
Throw Another Cob on the Fire
With heating costs soaring this winter, homeowners across the U.S. are discovering an alternative fuel: field corn, the kind farmers use to feed livestock. It's certainly cheap. Corn costs $2 a bushel, and homeowners can heat the average house for $30 to $60 a month--10 times cheaper than with natural gas or heating oil and 7 times cheaper than with electricity.
The big investment is the stove that burns it. But even at $2,170 a pop, manufacturer American Energy Systems can't keep up with demand. After selling all 1,000 stoves it made last season, the Hutchinson (Minn.) company made 5,000 for this winter and then sold all of those, too. Founder Mike Haefner says he gets a phone call or e-mail every 30 seconds. "They tell me they're sick and tired about high energy costs, and it's time to do something about it," he says.
Haefner says that he invented the stove after seeing corn prices dip to historical lows in the past three years. His stove burns dry shelled field corn and needs only a vent pipe to expel exhaust. Haefner figures he could sell 100,000 if he could just find a manufacturer to help make them. And no, your house won't smell like popcorn.
By Laurie Freeman
Cookies and High Tech
Forget cooking and crafts. The Girl Scouts are introducing 17 badges aimed at getting girls ages 8-11 to learn about civil and electrical engineering, the environment, global politics, oil production, and even how to make plastics.
Today's 2.7 million Girl Scouts need to prepare for technological careers, their leaders say. "We know that women have been left out of science and technology areas," says Executive Director Marsha Johnson Evans. By earning badges, scouts find new interests, learn potential job skills, and meet mentors in the field.
To earn the Oil Up badge, girls learn about oil production and, using a kit, replicate and then clean up an oil spill. For the Making it Matter badge, they use a polymer kit to make plastics. For the Global Awareness badge, devised with former Secretary of State Madeleine Albright, the girls follow a world region's politics. Not to worry, though: Girl Scouts will still sell cookies.
By Joan Oleck
Slow Going for Euro-Preneurs
A new study on european competitiveness finds it's getting easier to start a company in Europe--and easier to fail. But it's still not as easy as in the U.S.
Registering a new company takes under a week in Britain and Denmark--less time than the two weeks required in the U.S. But expect to wait 22 weeks in Spain and 16 in Germany, according to the study. On the rest of the Continent, registration delays also are longer than in the U.S., although they are coming down. "Europe's competitiveness is improving," says Erkki Liikanen, who commissioned the European Commission report, "but still not fast enough to close the gap with our competitors."
Similarly, going bankrupt in Europe can be a career-killer. Creditors can claim a bankrupt entrepreneur's assets for 12 years in Ireland and 10 years in Finland and Sweden. That compares with one year in the U.S. and--surprisingly--Greece. A long period means earnings from future ventures can be claimed, a disincentive to starting anew. Euro leaders plan to discuss solutions at their Mar. 23 summit in Stockholm.
By William Echikson
Footnotes
Median annual compensation for S&P 500 board members: in 2000, $100,800; 1999, $95,000; 1998, $85,500
DATA: TOWERS PERRIN
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Copyright 2001 , by The McGraw-Hill Companies Inc. All rights reserved.
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