Up Front
Edited by Sheridan Prasso
Talk Show
"The reason he left the firm is very simple. You can't do your job when your photo is on the front page of BusinessWeek, and the Wall Street Journal and The New York Times just have to have a story about you every day, and CNBC chases you down the street." -- Salomon Smith Barney CEO Michael Carpenter on the resignation of analyst Jack Grubman, to USA Today
BELLWETHERS
E-Shop, Then Watch the Dow Climb
The Internet may indeed be a harbinger of trends. After four months of slowing online sales growth, e-commerce rose more than 20% by the end of July, according to comScore Networks, which tracks the daily surfing and shopping habits of 1.5 million Internet users. That could be an indicator of higher consumer confidence and retail sales overall.
More surprising, though, was comScore's discovery of a correlation between online sales and the Dow Jones Industrial Average. Increases and decreases in weekly online shopping trends showed up two weeks later in the performance of the Dow. So the uptick in online spending in July translated into a rise in the Dow by mid-August. The trend has held for the four months that comScore has tracked it so far. Mohanbir Sawhney, a tech professor at Northwestern University who reviewed the data, called it "quite interesting and significant."
The theory is that online consumers are "early adopters" who react quickly to economic forces. The upshot: Online shopping rose for the week ending Aug. 18, so the Dow is likely to rise by early September, too.
By Heather Green
BELLWETHERS
CORPORATE GLOSS
How Green Was My Report Card?
As financial scandals sweep Corporate America, more and more companies are trying to show they're environmentally and socially responsible by issuing "green" reports on their progress. In 2002, 45% of the 250 largest global companies produced corporate responsibility reports, compared with 35% three years ago, according to a triennial study by KPMG. In the U.S., 36 of the top 100 companies did so, vs. 30 in 1999. "It's very encouraging," says Eric Israel, a partner at KPMG. "It's a trend that's here to stay."
Yet, unlike financial reports, there's no common standard. And that gives companies considerable discretion over what to include. "Quality is a mixed bag," says Arvind Ganesan, director of business and human-rights at Human Rights Watch. "Many reports...may only include environmental and community giving."
To make them more reliable, the nonprofit Global Reporting Initiative wants to standardize them, enlisting the likes of Ford (F
), Nike (NKE
), and AT&T (T
). At a summit in Johannesburg in August, GRI will present 50 measures, such as the emission of certain pollutants, that it suggests companies use to gauge their progress.
By Kimberly Weisul
SCANDAL WATCH
A Plea to Recycle Political Gifts
Angered by WorldCom's (WCOEQ
) massive accounting fraud, Senate Majority Leader Tom Daschle (D-S.D.) said in July that he would donate his $10,000 in political contributions from WorldCom to its laid-off workers. Now Kate Lee, a recently laid-off WorldCom exec in Atlanta, is trying to make sure he keeps his word. She and three other ex-WorldComers have faxed Daschle and 91 other pols nationwide who received such contributions--including Senator Barbara Boxer (D-Calif.) and New York Governor George Pataki--asking them to give the money to their private relief fund.
Called the Ex-WorldCom Employee Assistance Fund, it's trying to recoup the $700,000 the company gave to politicians this year. The employees were prompted by a July 21 bankruptcy court approval of a WorldCom request to cap severance at $4,650 for each of the 17,000 workers recently let go. "That's pretty lousy," says Lee, who says the decision is "shafting people out of decent severance payments." As for Daschle, a spokeswoman says he's evaluating where to give the money.
By Charles Haddad
THE LIST
AFTERLIVES
An Old MCI Vet with New Advice
Twenty-eight years after he left MCI (MCIT
), co-founder John Goeken is pretty darn rankled that the WorldCom (WCOEQ
) guys, who bought MCI in 1998, drove it into bankruptcy after massive accounting sleight of hand. "It's a shame," says Goeken, 71, who admits to losing "several million dollars" on WorldCom stock. "There was no reason in the world for that."
That's why he and a dozen former MCI managers are also working to pull together a high-powered advisory board to try to advise WorldCom out of bankruptcy. Such a panel, he says, could suggest new directors and, as needed, management. With WorldCom's bogus accounting now topping $7.1 billion and a couple of company ex-honchos facing charges of securities fraud and lying to federal regulators and investors, Goeken says WorldCom's board "should represent the shareholders, and they haven't done such a good job." WorldCom, which on July 21 filed the largest U.S. bankruptcy case ever, declined comment on Goeken's potential help.
After turning MCI from a tiny seller of microwave bandwidth for truckers into the No. 2 long-distance titan, Goeken now runs an incubator company, Goeken Group. It backs startups such as one marketing the light technology used to make bus-stop panels and safety vests glow and another that uses global positioning satellites to locate elderly people or motorists in distress. Another of his ventures stores medical information and makes it available to emergency-room doctors. He sold his previous ventures, including Airfone, In-Flight Phone, and the FTD Mercury computer network for flower deliveries. Now he's pondering taking the $60 million-a-year Goeken Group public.
In his off-time, he pilots three planes, including a World War II trainer. Goeken, who has only a high school degree but a lot of drive, says: "The trick is doing something nobody else has done." But doing it legally.
By Joseph Weber
CELLULAR COURTSHIP
Hey Baby, You Ring Here Often?
Unlucky singletons, take heart--and grab your cell phones. There's a virtual-dating game now popular in Britain that could show up in the rest of Europe and the U.S. later this year. Scottish mobile-gaming company Digital Bridges says 65,000 subscribers have exchanged more than 4 million messages since the game first appeared in February, with messages costing 24 cents apiece.
The aim of Virtual Boyfriend/Girlfriend is to woo an imaginary sweetie by means of cell-phone text messaging and to persuade him or her to move in. Digital Bridges reckons it takes about 17 messages to go from lonely loser to live-in lover. You can choose from 10 potential partners: "Outdoorsy Adrenaline Junkie Ivan," say, or "Posh Ariane, an Ice Queen and a Bit of a Tease."
Then, he or she kicks off the messaging. Points for "love" or "self-respect" are awarded based on responses. Taking "Sensitive and Romantic Greg" up on his dinner invitation scores high on love points. Refusing his pleas to stay over boosts the self-respect tally. Move too fast or use a lame pickup line, and you'll be told off. Lose too many points and you get dumped. A little practice, however, goes a long way--just as in real life.
By Kerry Capell
THE BIG PICTURE
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Copyright 2002, by The McGraw-Hill Companies Inc. All rights reserved.
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