|
|
ONLINE FEATURES
Book Reviews
BW Video
Columnists
Interactive Gallery
Newsletters
Past Covers
Philanthropy
Podcasts
Special Reports
BLOGS
Auto Beat
Bangalore Tigers
Blogspotting
Brand New Day
Byte of the Apple
Economics Unbound
Eye on Asia
Fine On Media
Green Biz
Hot Property
Investing Insights
Management IQ
NEXT: Innovation
NussbaumOnDesign
Tech Beat
Working Parents
TECHNOLOGY
J.D. Power Ratings
Product Reviews
Tech Stats
Wildstrom: Tech Maven
AUTOS
Home Page
Auto Reviews
Classic Cars
Car Care & Safety
Hybrids
INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | |
DECEMBER 22, 2003
Edited by Ira Sager Talk Show "I am surprised Al Gore would endorse a candidate who stands for so many things Al Gore does not stand for." -- Joseph Lieberman on Gore's endorsement of Howard Dean Insurers Are Getting Nervous The mutual-fund scandal is making it harder for asset-management companies to insure directors and officers. BusinessWeek has learned that insurance giants such as American International Group (AIG ) and Chubb (CB ) are telling fund groups that new policies will exclude from coverage any allegations or findings relating to market timing, selective disclosure, late trading, or failure to apply fair-value pricing. Insurers, burned by Enron and other scandals, want to avoid future fund flare-ups. Insurance sources say Chubb's exposure is about $10 million per client that reinsurance doesn't cover. And analysts say insurers will eventually offer funds more inclusive coverage, but at much higher prices. AIG didn't return calls. Chubb declined to comment. The insurance restrictions should actually force funds to make some much-needed changes because they'll be on the hook financially. Phil Edwards, a managing director at Standard & Poor's, says: "Nothing is going to happen until there is an economic incentive to do it." Hear that, regulators? By Lauren Young   A Zapper For Online Ads It's the shining hope of Internet advertising -- and one software company is delivering the tools to destroy it. The target: paid search on the Net. These are the ads that appear next to search results when someone types in, say, "hiking boots." Paid search has grown into a $2 billion industry, one that is fueling Yahoo!'s (YHOO ) comeback and Google's upcoming IPO. And Ed English wants to put the kibosh on it. He's the CEO of InterMute in Braintree, Mass., which makes AdSubtract PRO 3, a $29.95 program that blocks ads. On Dec. 8, English released a beta version of the software that gives Web surfers the option of calling up search results void of ads and sponsored links. "It's as if you put white-out over all the ads," says English. The final version should hit the stores in January. Net advertisers are running into such defenses at every turn. Free programs that block ads on Web sites are spreading fast. And spam filters threaten to zap even legit e-mail ads. This double whammy has pushed many advertisers toward paid search. The ads are usually relevant and attract lots of clicks. But given a choice, how many search-engine surfers would opt to welcome the ads? We'll soon see. By Stephen Baker  "People Are Getting Stuck" Putnam Investments says it has no problem accommodating investors who want to get their money out of its scandal-plagued mutual funds. Dozens of ex-employees, however, are out of luck if they try to sell Putnam shares back to the company, BusinessWeek has learned. Putnam started allocating the so-called phantom shares in 1997. The shares are similar to options: They vest and can be redeemed over a defined period. But there's no public market for them. Putnam and its employees are the only buyers. Putnam can decide not to buy back shares, but this is the first time it has done so. "People are getting stuck," says a former employee. Current employees, who can sell only in March or September, are not affected so far. That could change depending on Putnam's decision in the first quarter. The value of a Putnam share, calculated quarterly, was $50 at the end of September. It's expected to be lower this quarter. That's why Putnam is holding off. Says CFO Irene Esteves: "We did not think it was appropriate to buy back shares at this time." Meanwhile, parent Marsh & McLennan is trying to help new Putnam CEO Charles "Ed" Haldeman avert a mass exodus. It will pay bonuses and make up for commissions lost because of the scandals. Proving again that cash is king. By Faith Arner Party Pooper During his reign at Tyco (TYC ), former CEO Dennis Kozlowski allegedly used company funds to host a lavish party for his wife on the island of Sardinia. A tape of the event introduced at his trial was broadcast repeatedly. With that video fresh in people's minds, successor Edward Breen will host an exceptionally sober holiday affair this year. On Dec. 18, headquarters employees will attend a "town hall meeting" at a Princeton (N.J.) Hyatt. Breen will update them on Tyco's performance and host a "social gathering" -- sans alcohol. About the only merriment: If the event is short enough, employees may be able to head home early. By William C. Symonds Employment Is Up. No, Wait... How much do we really know about the economy? The Bureau of Labor Statistics says that nonfarm payrolls "rose slightly" in November. But the BLS also concedes it's quite possible that payrolls actually fell -- or rose a lot. What gives? The BLS surveys businesses that em-ploy just 30% of all workers. There's a 10% chance it's wrong by 105,000 jobs on either side -- swamping the estimate of 57,000 new jobs. Says Robert Brusca, an econ-omist at Native American Se-curities: "The smart money doesn't react number to num-ber." No wonder. By Peter Coy Ed Rensi: From Big Wheel To Hot Wheels  For Ed Rensi, life has gone from fast food to fast cars. As president and CEO of McDonald's USA in the 1990s, Rensi oversaw more than 12,000 outlets, with $17 billion in sales. Now, he's working even harder as the owner of a NASCAR team and as a director of International Speedway Corp., a $543 million company with 14 tracks around the country. In the 2003 season, which ended on Nov. 15, Team Rensi had its best finish in its four years of racing, coming in fourth in the NASCAR Busch Series.Rensi, 59, says he has been a gearhead since way back. Indeed, he used to drag-race even while at McDonald's. His top speed on the track: 158 mph. Rensi hasn't raced since 1996. But he gets nailed for speeding more times than he'll admit -- in his Lincoln Town Car or in either of his Corvettes. "I have to learn to behave," he says. And he still loves McDonald's. Rensi says he eats there every day. Often at the drive-through, natch. By Michael Arndt Ho, Ho, Ho, Here's What's Selling Expect lots of Barbie and Bratz dolls under the tree this year. How do we know? We asked the big man himself: Santa Claus. An intrepid band of BusinessWeek correspondents braved raging snowstorms and lines of sniffling children to get the scoop from St. Nick at malls across America. The clear favorites: Barbie and Bratz for girls and Sony's PlayStation 2 for boys. "Girls this year are really into being little girls," says 28-year-old "Hunky" Santa, Ivan Gabriel, stationed at Los Angeles' Beverly Center. "And boys really like their gadgets." PCs, Microsoft's Xbox, as well as perennials such as Hot Wheels cars made kids' lists. In Pittsburgh, news of the economic recovery has even trickled down to 7-year-olds. "They're coming in with lists of 20 items," reports Gene Stapleton, a Chief Elf at Kaufmann's department store. One older boy told the store's Santa, John Bacha, he wanted a Rolex. "How about a Timex?"Bacha offered. "No, a Rolex," insisted the lad. Not all the tykes are so status-oriented. A child at Serramonte, a mall in Daly City, Calif., said to Santa Dan Nesheim: "Give [my gifts] to someone else who can't afford them." It seems the Christmas spirit is alive and well. By Brian Hindo, with bureau reports The Paycheck Is In The Card Would you prefer paper or plastic for your paycheck? About 2 million workers at such companies as Burger King and Western Union Financial Services now have their pay loaded directly onto debit cards. Boston researcher Celent Communications expects such payroll-card holders to triple by 2006. And an American Payroll Assn. poll found that half of payroll execs plan to evaluate the cards within a year. Most workers who use the cards are hourly wage-earners without checking accounts. The cards let them avoid costly check-cashing outfits and access ATM machines. Some cards bear the Visa or MasterCard logo, allowing users to rent cars or book airline tickets. For employers, the cards cut check fraud -- "a national epidemic" says Bob Hughes, a vice-president at poultry company Pilgrim's Pride, which started using the cards in March. The user pays either a monthly fee of about $4 or a slice of each transaction (up to $1.50). Seems it's easier to avoid banks than it is to avoid banking fees. By Brian Hindo 
| | |
 Copyright BWStory.copyright, by The McGraw-Hill Companies Inc. All rights reserved.Terms of Use | Privacy Notice |
Printer-Friendly Version
