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In Business This Week: HEADLINER: ERIC SCHMIDT
NOVELL'S NEW NABOB
Just when it seemed that Novell would never find a suitable CEO, the struggling network software maker announced a coup. On Mar. 18, it snagged Eric Schmidt, 41, a pioneer of networked computing who is chief technology officer of Sun Microsystems.
The appointment ends a search for a replacement for Robert Frankenberg, who left in August. Frankenberg refocused Novell on networking after a distracting series of acquisitions by founder Raymond Noorda. But he couldn't stem a slide in sales, earnings, and market share. Novell's stock, which hit 26 in February, 1994, is trading around 9.
What drew Schmidt to Novell? "There are tremendous assets that
are not well-known," says Schmidt, who confesses to a "passion for protocols."
Novell has more than 50 million customers and a technology even Microsoft can't match: "directory services" for tracking and managing all of the resources on a network. Schmidt's pals also figure he'll push the Java software he helped bring forth at Sun.By Amy Cortese EDITED BY KELLEY HOLLAND & PETER COYReturn to top
AMERICAN'S PILOTS HAVE PENS IN HAND
COMING IN FOR A LANDING: American Airlines and negotiators for its pilots' union were close to a contract agreement on Mar. 19 that would avert a strike on Apr. 28, say sources on both sides. The deal would sweeten the pay and stock options offered in a contract that the pilots nixed in early January. The new deal--which still must pass the union's board on Mar. 21 and be approved by the rank and file--is expected to give pilots a 9% raise through Aug. 2001. That's higher than the 5% raise in the rejected pact, but the contract has been extended by a year. American would maintain the right to fly small, regional jets in its AMR Eagle commuter operation, whose lower-paid pilots are represented by a different union. American's 9,300 pilots briefly struck on Feb. 15, but President Clinton intervened.EDITED BY KELLEY HOLLAND & PETER COYReturn to top
RUPERT'S EYE IS ROVING AGAIN
RUPERT MURDOCH CAN'T resist a good deal. Just weeks ago, News Corp. announced that it would shed "noncore" assets to focus on businesses like satellite television. But on Mar. 17, Murdoch's company agreed to spend $754 million for a marketing company--Dallas-based Heritage Media, whose products include machines that sit on supermarket shelves and dispense coupons. Murdoch plans to sell Heritage's TV and radio stations to pay off debt. Sources say Murdoch also recently considered a bid to buy PointCast, the Cupertino (Calif.) Internet startup for $500 million. PointCast says it has received some unsolicited buyout offers but plans to remain independent.EDITED BY KELLEY HOLLAND & PETER COYReturn to top
SHELL AND TEXACO TIE A KNOT
ON MAR. 18, SHELL OIL AND Texaco agreed to combine some refining and gasoline marketing operations in a new joint-venture company. It's the latest in a rash of alliances seeking to boost profits in a brutally competitive section of the oil business. If approved, the joint venture would have 6% of all U.S. refining capacity and almost 15% of U.S. gasoline sales. And the companies want more: They are discussing combining with Star Enterprise, the Texaco/Saudi Arabian venture that owns Texaco's East Coast and Gulf Coast refining and marketing operations. If the three do manage to combine assets, it would create a powerhouse with nearly twice the share of gasoline sales of current leader Mobil Oil.EDITED BY KELLEY HOLLAND & PETER COYReturn to top