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MAY 23, 2005
Edited by Dan Beucke Talk Show "We're not interested in doing any consolidation acquisitions." -- Charles Schwab on considering a deal like E*Trade and Ameritrade MISMATCHES Charter's Boardroom Soap Opera Paul Allen's investment in Charter Communications (CHTR ) has been a disaster. Six years after the Microsoft co-founder created the cable-TV outfit and invested $8 billion, his stake is worth $423 million. Now Chairman Allen -- who holds 57% of Charter's common shares and 93% of its votes -- could get sued by his own board. The dispute is over whether Allen, 52, should be required to swap preferred shares, for which he paid nearly $700 million in 2003, for the equivalent of common shares, worth $28 million. Some investors worry that Allen's huge preferred position could hamper the company's efforts to line up more financing. Allen says that he is simply following what was written into an agreement with the board. But the board says a clause requiring him to swap the shares was in an early draft of the agreement, then was left out in error. An attempt at nonbinding arbitration with a three-member special committee of the board fizzled. The two sides are now in mediation. If that doesn't work, the committee "intends to seek resolution... through judicial proceedings," the company says in financial filings. That would be almost unheard of in Corporate America. But for Allen, it's all part of the Charter nightmare. By Ronald Grover   SPARE PARTS The Kindness Of Strangers The Internet can do more than help find a date -- it can help find a kidney. Since October, MatchingDonors.com, a nonprofit Web site, has aided patients who desperately need a new liver or kidney in finding living donors. The vast majority of transplants are managed by the federally sponsored United Network for Organ Sharing. But patients seeking to jump the long waiting line can join MatchingDonors for fees starting at $295. There, some 2,000 donors offer organs to strangers for nothing more than goodwill (since it is illegal to sell organs). So far, seven members have received transplants. Bill Gibby, a 24-year-old from Anchorage, Alaska, with a wife and year-old son, donated a kidney on May 4 to Kathy Lee, 33, of San Diego, whom he met for the first time when he flew down for the operation. Lee's insurance paid Gibby's health costs. "I was donating a lot of blood at the blood bank," he says. "But you can only do that 24 times a year, and I'd like to do more." Harvard Medical School has scheduled a forum on the ethics of looking for organs online, featuring MatchingDonors founder Dr. Jeremiah Lowney. But with about 88,000 people in the U.S. transplant queue -- 17 of whom die each day -- ethical concerns may hold little sway with patients. By Catherine Arnst THE BIG PICTURE 
CINEMA SCOPE DVDs At ATMs As if Blockbuster (BBI ) didn't have enough trouble grappling with Netflix (NFLX ) and Wal-Mart Stores (WMT ), a new competitor is coming to an automated teller machine near you. In Denver, more than 100 McDonald's (MCD ) offer DVDs for $1 from vending machines. And now DVD rentals are going 24/7. In April, New York-based MoviebankUSA, backed by private investors, opened a storefront ATM stocked with more than 2,000 DVDs in Manhattan's SoHo neighborhood. The kiosk rents video hits such as The Incredibles for as little as 99 cents for six hours; returns are just dropped into the machine. The kiosk is getting about 100 renters a day without any advertising, says MoviebankUSA co-founder Olivier Delouise. He plans to have 3,000 kiosks running in three years. By Ronald Grover AFTERLIVES Carly: Out, But Not Down About a year ago, James Renick, chancellor of North Carolina Agricultural & Technical State University, invited Hewlett-Packard (HPQ ) CEO Carly Fiorina to speak at the historically black university's spring 2005 commencement. Shortly after her Feb. 9 sacking, Fiorina called Renick and asked: "Do you still want me to come?" Absolutely, Renick said. Fiorina now had something in common with graduates, he reasoned: unemployment. So on May 7 -- in front of 14,000 people at the Greensboro Coliseum -- Fiorina made her first public appearance since being deposed. Instead of her usual visionary CEO-speak, the audience was treated to a softer, more revealing message from Fiorina, 50. She recalled pressure she felt to succeed after graduating from Stanford with no job prospects. Implicitly linking the racism the students may face with the male chauvinism she experienced as a woman in tech and telecom, she said she was labeled the "token bimbo" as a young AT&T (T ) saleswoman in the late 1970s. Later, she felt the same humiliation when a rival CEO mocked her in front of analysts and reporters. But she refused to let it dampen her spirit. The message resonated with the amped-up crowd, which cheered when Fiorina quoted from the Bible. She later got a standing ovation. Fiorina talked openly about the loss of her job. "Though I have made my fair share of mistakes, I have no regrets," she said. "I'm still here, I'm at peace, and my soul is intact." Fiorina didn't give any hint about her future plans, but many speculate she'll make a foray into politics. Judging by her ability to connect with this crowd, that might not be a bad move. By Andrew Park FACE TIME Michael Lawrie: Why The Short Stay At Siebel?  Michael Lawrie wasn't in a talkative mood after getting axed on Apr. 13 by Siebel Systems. No wonder, considering how he was sent packing after only a year on the job. Now the dust has settled, though, and Lawrie can reflect on his aborted turnaround.One problem was a disconnect with Thomas Siebel, who recruited Lawrie from IBM to take over as CEO. But Siebel stayed as chairman -- an often-perilous situation. "There were issues between Tom and me in terms of how I was changing the company. He wasn't comfortable with it," says Lawrie, 50. Siebel declined to comment but has said the decision was about performance. First-quarter revenue fell 9%, on a loss of $4 million. Another lesson: Don't try to do too much at once. Lawrie quickly expanded into new businesses and emerging markets. But demand for Siebel's software was shrinking fast. Lawrie didn't get a chance to set things right. Now he's decompressing and has no plans to leap into anything new just yet. -Steve Hamm FAT CATS Corporate Jets Home In On D.C. Will the Gulfstreams return to Ronald Reagan Washington National Airport? Powerful CEOs, sick of slogging as much as 45 minutes from Washington Dulles International Airport to downtown D.C., are working hard to reopen the more convenient Reagan airport to corporate jets, which were banned over security concerns after September 11. Lobbyists for the Financial Services Roundtable, which includes such powerful members as Merrill Lynch (MER ) and American Express (AXP ), arranged to put an amendment in the Homeland Security authorization bill. If that doesn't work, backers will push to get it into transportation legislation. A critic of the bill says lobbyists are putting their bosses' convenience over security. But Scott Talbott, who heads lobbying for the Roundtable, insists: "The reality is that time is money. And business needs to keep going." In this case, time is a heck of a lot of money. A letter sent to Representative Christopher Cox (R-Calif.) points out: "Roundtable member companies provide fuel for America's economic engine, accounting directly for $17.1 trillion in managed assets, $888 billion in revenue, and 2 million jobs." Not to mention that the financial, insurance, and real estate industries contributed $49 million to campaigns in the last election cycle. By Eamon Javers MEDICINE Robo-Babies For Doctors In Training What drools, has a heartbeat -- and possesses interchangeable genitalia? A simulated baby that promises to advance medical training. The mannequin, dubbed BabySIM, is the latest innovation of METI, a private company in Sarasota, Fla. METI already sells simulated adults and adolescents. On May 12, it begins shipping a $42,000 simulated infant complete with PC, power cord, and software. Residents and interns now learn by watching experienced doctors operate on real babies. The infant simulator will help them master procedures such as airway management and shock. METI says 17 hospitals and other medical groups have placed orders. "It's medical education without risk," says Betsy Bencken, director of the Center for Virtual Care at the University of California at Davis Medical Center. Next: METI is working on a neonatal model that will simulate a just-born infant. By Spencer Ante 
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