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SEPTEMBER 27, 2004
Edited by Monica Roman HEADLINER Martha Stewart: Chill For Five Months  Although she's known more for her decorating abilities, Martha Stewart certainly knows her math. Faced with the prospect of five months in a minimum-security prison vs. another uncertain year while waiting to appeal a guilty verdict for lying to the government, the domestic diva opted for jail.But Stewart's Sept. 15 decision is unlikely to have much impact on her struggling company, which has already moved to distance itself from its founder and is nurturing new properties that don't bear her name. The stock price of her company, Martha Stewart Living Omnimedia (MSO ), rose 1%, to 11.26, on the news. Stewart fought back tears after announcing that she has asked to start her five-month jail stint, and told reporters that she hoped to be back in her garden for spring planting. With diminishing ad sales and weaker circulation at her magazine, not to mention her popular TV show being on hiatus, a more critical task will be wooing back advertisers and fans. By Diane Brady You Deserve A Payout Today McDonald's (MCD ) revitalized focus on its menu is paying dividends -- literally. The hamburger giant said on Sept. 14 that it is hiking its annual payout to stockholders by 38%, to 55 cents a share. Including last year's 70% boost, McDonald's dividend has more than doubled in two years and now totals almost $690 million in corporate payouts. Big Mac can easily afford it: The Oak Brook (Ill.)-based chain reported a week earlier that same-store sales rose 3.9% worldwide in August, the 16th month in a row of increases at stores open more than a year. Lifting sales: new premium products such as Chicken Selects -- breaded strips of white-meat chicken -- and a fourth entrée salad.   Look, Touch, But Don't Buy  Call it the unstore. Not to be outdone by the stylish Sony (SNE
) and Apple (AAPL
) stores, Samsung is opening a sleek 10,000-square-foot showcase for its consumer electronics in the new Time Warner Center in Manhattan on Sept. 23. But the space is so cool that there isn't a price tag in sight. Instead, Samsung wants to wow visitors with interactive kiosks, freebies, and the ability to play with consumer electronics in a low-pressure environment where nothing is for sale. Visitors walk by two rows of videos flashing on 40-inch flat-screen TVs before entering modern rooms that highlight how Samsung's products work in the home, in the office, and on the go. The Korean giant is considering opening similar showcase stores in other cities.A Dry Spell For Coke Where's the fizz? That's what Coca-Cola (KO ) is trying to find out. On Sept. 15, the beverage giant warned Wall Street of weak second-half earnings. Disappointing sales in North America, higher costs in Germany, and wet weather in Europe were blamed by Chief Executive Officer E. Neville Isdell, who took over from Douglas Daft in June. PepsiCo's (PEP ) soft-drink sales, meanwhile, are up worldwide. New products at Coke, like the mid-calorie C2, are floundering. And Coke's advertising hasn't had a hit since the Polar Bears were cubs. A plan that cuts consumer prices is expected soon to drive up volume, but won't necessarily help profits. Yahoo! Raises The Volume Hoping to bolster its position in the booming market for online music, Yahoo! (YHOO ) on Sept. 14 acquired Musicmatch for $160 million. Privately held Musicmatch boasts more than 200,000 subscribers to its ad-free radio service as well as millions of users of its desktop software for creating playlists and burning CDs. The purchase is intended to complement Yahoo's existing music service, dubbed Launch. It signals a serious effort by Yahoo to tap a market that JupiterResearch expects to nearly triple in the U.S. this year, to $270 million. Although Yahoo's Launch receives the most traffic of any online music site, according to Nielsen// NetRatings, the biggest moneymaker thus far appears to be Apple Computer's iTunes, where 70 million songs were downloaded in its first year. Et Cetera... -- Gary Muto will head Gap's (GPS ) new chain for boomer women (BW -- Aug. 16). -- Best Buy's (BBY ) second-quarter net earnings rose 8%. -- A Goldman Sachs (GS ) survey sees slower growth in 2004 and 2005 tech spending. Closing Bell: Callaway Golf  Callaway Golf (ELY
) shares landed in a sand trap on Sept. 15, falling 16%, to $10.33, after the company pulled its sales and earnings estimates. Callaway, which grew to nearly $1 billion on its oversize drivers, has suffered due to competition from high-tech rivals and a costly move into golf balls.
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