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OCTOBER 9, 2006
Edited by Deborah Stead Talk Show "Your family has taken a hit. That calls for mercy." -- U.S. District Judge Kenneth Hoyt on sentencing former Enron CFO Andrew Fastow to a six-year prison term, instead of the original 10 years agreed to in his plea bargain. (His wife already served a one-year sentence) REWIND A Web Fraud Squad For Advertisers Frustrated by click fraud in online advertising (BW -- Oct. 2), a group of advertisers and agencies have created the Click Quality Council to press Google and Yahoo! to fight the problem more aggressively. Led by online ad-monitoring firm Click Forensics, members include credit-card giant Visa, online mortgage firm LendingTree, and ad agencies like Carat Fusion. Google, Yahoo, and other search engines are now working with the Interactive Advertising Bureau to define click fraud, and the council wants a say. "If Google and Yahoo are establishing standards for advertising online, advertisers have to be part of the mix," says Robert Pettee, search marketing manager for LendingTree in Charlotte, N.C. Search-engine advertisers, who pay each time a visitor clicks on an ad, are increasingly worried about the bogus clicks, some of which are generated by clicking software or a network of paid clickers. That concern may undermine the rapid growth in U.S. online advertising. Experts estimate 10% to 15% of clicks on search engine ads are fraudulent. Search engine giants say that's an exaggeration and that they catch most bad clicks before advertisers are charged and give refunds for illicit clicks. Some advertisers, it seems, aren't so sure. By Brian Grow   U.S. COMPETITIVENESS Failing On The Fundamentals The U.S. gets the hard things right, like market efficiency and innovation, but it messes up the basic stuff, like balancing the budget. In fact, its macroeconomy -- with big government deficits and negative personal savings -- is worse than those of Nigeria, Peru, Uganda, Venezuela, or Vietnam. So says the World Economic Forum, sponsor of the annual glitterati gabfest in the Swiss ski resort of Davos. Putting it all together, the forum ranked the U.S. sixth in its Global Competitiveness Index this year, down from first place in 2005. (The U.S. was originally deemed No. 2 last year, but the results were restated using a new methodology.) Like any other ranking, the forum's index invites controversy. China is only No. 54 among 125 nations, behind Costa Rica. (It got demerits for its weak banks and courts.) The top five: Switzerland, Finland, Sweden, Denmark, and Singapore -- neat and tidy nations where all the budgets are strong and all the savings rates are above average. The index uses statistics and a survey of 11,000 business executives worldwide. Dragging down the U.S. score, besides macroeconomic factors: high infant mortality, relatively low life expectancy, and poor marks from the executives on government effectiveness, which the forum says may reflect the bungled response to Hurricane Katrina. By Peter Coy THE BIG PICTURE 
AUTO NATION Cars That Know When To Say When If friends don't let friends drive drunk, should cars? Recently, Nissan (NSANY ) and Toyota (TM ) revealed that they are researching new technologies aimed at disabling an auto once the car's systems have determined that the driver has had too much alcohol. Nissan is considering an onboard breathalyzer as well as more sophisticated systems, such as using a camera to monitor driver behavior. Not to be outdone, Toyota research and development chief Kazuo Okamoto confirmed on Sept. 21 that the auto giant is researching not only the breathalyzer option but also a way of testing for alcohol through the steering wheel, using onboard computers to monitor driving style. A foolproof system looks to be a ways off. One problem: ensuring that a drunk driver won't be able to enlist someone else to take the breath test. Another is building systems acute enough to differentiate between drunk drivers and those who drive erratically, but not dangerously. Then there are legal issues. What if a drunk driver who harms himself or another sues a carmaker, claiming he only drove because his car allowed it? "I have to say we're still at an R&D stage," says Toyota's Okamoto. By Ian Rowley Searching For Spies No, it's not a spoof. The CIA is advertising on the cable channel Comedy Central as part of a recruiting effort for its National Clandestine Service. The ads, which began in mid-August and will run until at least mid-October in the New York, L.A., Detroit, and Chicago markets (where they're in movie theaters, too), feature a diverse group of twentysomethings who have presumably answered "yes" to the question posed in the voice-over: "Are you ready for a world...of ambiguity and adventure?" The agency says it didn't target Comedy Central, noting that the ad packages it buys allow cable providers to pick from an array of channels. Still, online résumés are up at the agency since August, says spokesperson Michelle Neff, with 2,800 coming in weekly. By Lindsey Gerdes BLOGSPOTTING Innovation Hub innovation.corante.com/network WHY READ IT Head for this blog aggregator -- a blog of blogs -- to get top-quality entries on innovation and creativity all in one place. Corante, a blog media company, selects the best posts from member blogs (15 and counting) and features them alongside commentary from two knowledgeable editors. It adds up to a mix of new voices, helpful context, and ahead-of-the-curve musings on everything from design to the newest ways to measure innovation. This network is the fourth Corante blog hub, joining sites on marketing, media, and technology. By Elizabeth Woyke BOGEY MEN Where CEOs Are Coming Up Short Maybe chief executives are working extra hard these days to earn those huge pay packages: They're spending less time on the links, according to Golf Digest's latest biannual survey of CEO golfers. And it shows: Many who made the magazine's top 200 CEO golfers in 2004 report their games have since worsened. Among the CEOs with rising handicaps (the average number of strokes they typically shoot above par) are discount broker Charles Schwab, Jeff Immelt of General Electric, Robert Walter of Cardinal Health, (CAH ) and John Tyson of Tyson Foods (TSN ). A handful of top CEO golfers such as Comcast (CMCSA ) chief Brian Roberts haven't posted any golf rounds since 2005. Some CEOs did find the time to improve their game. Terry Lundgren, head of Federated Department Stores (FD ), slashed his handicap from 18.0 to 10.9, enough to vault him from 179th to 91st in the rankings. Federated shareholders needn't worry, though: The company's shares have soared 87% during that same stretch. By Dean Foust CAUSES Prostate Cancer's Higher Profile The public-awareness campaign about prostate cancer may be taking off. The publicity and corporate sponsorships aimed at fighting the disease have lagged far behind support for breast cancer prevention and research. "Men don't really like to take care of their health or advocate for themselves," says Jamie Bearse, spokesman for the National Prostate Cancer Coalition. "That puts the cause at a bit of a disadvantage." For years, prostate cancer has had its own month (September), color (blue), and two major nonprofits (NPCC and the Michael Milken-founded Prostate Cancer Foundation). But the campaign has had difficulty recruiting sponsors outside of longtime supporters like Safeway (SWY ) and Major League Baseball, which also dedicates one game a year, around Father's Day, to prostate cancer awareness. And in recent surveys, only 15% of men identify the campaign's blue ribbon with prostate cancer, up from 8% earlier. Indeed, because many men are loath to wear such accessories, NPCC also sells bracelets with the phrase "Do it for Dad" to appeal to wives and children. And PCF sells a lapel pin in the shape of a necktie, not a looped ribbon. Recently, though, there has been "an enormous difference" in the level of awareness and funding, says Leslie Michelson, head of Milken's PCF, as prominent prostate cancer survivors like New York's Rudy Giuliani and Colin Powell get active in the cause. PCF estimates its individual, foundation, and corporate donors will reach 19,000 in 2006, from 4,500 in 2004. The higher profile has helped attract nearly a dozen more corporate campaign partners. This year, Gillette (PG ) launched the "Prostate Cancer Challenge," which helps provide free screenings. And NPCC is working with, among others, Grolsch Beer, whose "Proktoberfests" feature celebrity-decorated beer bottles auctioned off for the cause. Brands are rolling out affiliated products, too. Gillette plans to add a logo to its Mach3 and Fusion razor packages. And in November, PCF will offer co-branded wristbands with the NBA, signed by players like Jason Kidd and LeBron James. By Elizabeth Woyke CHINESE TAKEOUT Counting Cash, Not Votes Given the bad publicity plaguing Diebold's (DBD ) electronic voting machines in the U.S., the $2.6 billion company may feel it's a relief to do business in China, which won't be holding elections anytime soon. Diebold is hitching its fortunes to the rapid growth of self-service banking on the mainland, selling thousands of its ATMs to Chinese banks. "China is the most important market for us as we look into the future," says President and CEO Thomas W. Swidarski, who predicts 20% to 30% growth for those ATM sales in the next few years. The goal: a $1 billion Chinese sales operation in 7 to 10 years. Key to reaching that goal, the company says, is maintaining a solid reputation for ATM service and security in China, where it has a 63-city service team. Diebold says its safety features (including a sensor to detect whether a device for information skimming, a common scam in China, is attached to an ATM's card slot) make its machines safer than those of competitors. Will concerns about Diebold's voting machines in the runup to American elections raise questions among China's avid netizens about ATM security? "Our technology speaks for itself," says Swidarski, who adds that "never" has a Chinese banker asked about the voting machine flap in the U.S. By Dexter Roberts ANALYZE THIS When The Boss Won't Share I work with a top executive who regularly fails to share information I need. I wind up hearing about concerns he has or steps he has taken from colleagues in other departments. Then I have to scramble to adjust a deadline or a budget, sometimes narrowly averting disaster. During project postmortems with him, some of us have broached the issue by pointing out problems that might have been avoided with better communication. He's quick to apologize, but his behavior doesn't change. I'm stymied. -- C.J., New York City I think you're dealing with what psychoanalysts call an "anal character," although I suspect this executive has already been called a few other choice names alluding to the same anatomical region. People who hoard information and withhold vital input can be among the most frustrating people in a company, even if they're highly productive. They may be smart, but they subvert efforts to cultivate openness and teamwork -- and can wreak havoc on group endeavors. What's driving this behavior? Well, Freud described the way in which some personalities emerge unevenly -- under the influence of difficult early-life circumstances or a troubled parent-child relationship. Parts of someone's personality can get stuck at a certain stage of development, in other words, while other aspects, like intelligence, creativity, or ambition, proceed apace. THE WAY ANALYSTS see it, the developmental milestones associated with the "terrible twos," including toilet training, are all about control -- of the mind as well as of the body. And a child's need to feel control over the important people around him or her, especially if life feels anything but secure, can linger into adulthood and lead to withholding all sorts of things: ideas, information, money, emotions, access. The withholding is an attempt to counter old feelings of powerlessness and to establish a sense of order and control. There's also a fear of opening up that grows out deep feelings of distrust. Of course, as a self-protective measure, closing down tends to foster more distrust -- on both sides. I know executives like the one you're struggling with. They can be exceedingly solicitous and apologetic about their style, but their need to withhold is so ingrained that it's highly unlikely to be dislodged, even in the face of the most sensitive feedback. Trying to force them to share information only makes them shut down further. (Often, colleagues wind up working around such people, as you are doing.) The best hope is to try to establish greater trust with these folks in other ways, and to tactfully reinforce their rare moments of openness. By Kerry Sulkowicz, M.D. Question Of The Week As a creator of crime stories—white-collar and otherwise—are you intrigued by the surveillance scandal unfolding at Hewlett-Packard? Is it fodder for fiction? "It's the perfect V.I. Warshawski story. What's missing, of course, is a dead body, perhaps the earnest young employee who must be silenced. And a little sex -- a very little if I'm writing the story." -- Sara Paretsky, crime novelist and author, most recently, of Fire Sale "It's already in development. The second I heard about it, I called our head writer and executive producer -- really interesting legal issues to explore here. Of course, everything on Law & Order is fiction, and in our story there's a murder, unrelated to the scandal." -- Dick Wolf, creator and executive producer of all Law & Order-branded programs "For me, the issue is not criminality but class. If you treat your board like that, what sense of pride can be left in your livelihood? From a writer's point of view, they're not people you'd want to be around for 100,000 words." -- Donald Westlake, crime novelist and author of the forthcoming Ask the Parrot
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