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In Business This Week: Headliner
William Raduchel: A Bright Ray of Sun at AOL
Filling the shoes of Netscape founder Marc Andreessen would give most people pause. On Sept. 10, the student-turned-billionaire stepped down as America Online's tech head to work on new business for Netscape's parent. But his replacement, longtime Sun Microsystems exec William Raduchel, may be just what AOL needs.
Raduchel's deal making is one reason Sun is so stellar. He drove the deal that gave Sun control of Netscape's software after the AOL merger last year. Now, the former Harvard professor will help AOL deliver on its plan to deliver content via all sorts of non-Web devices. "I have a deep understanding of technology that comes with 40 years of experience," says Raduchel, 53.
But leaving Sun wasn't so simple, partly because of his friendship with CEO Scott McNealy. He was McNealy's thesis adviser at Harvard. Laughs McNealy: "What am I supposed to say: `Great'? It's a real hole, but I'm thrilled to death for him." If Raduchel has his way, lots of Netizens may be thrilled, too.By Peter Burrows in San Mateo, Calif.; Edited by Mark FrankelReturn to top
Bracing for Pink Slips at AT&T
The cuts are coming--again. Employees at AT&T are bracing for more layoffs. After slashing 20,000 jobs in 1998 in a bid to eliminate $1.6 billion in annual costs, Chairman Michael Armstrong is planning another round. The goal is to reduce the company's overhead by a further $2 billion by the end of 2000. Workers are expected to start hearing about which jobs will be eliminated at the beginning of October. The cost-cutting comes as fierce price competition in AT&T's long-distance business bites into revenues--and as the phone giant lays out $110 billion to acquire cable networks and upgrade them so that they can carry local phone service and high-speed Internet access.Edited by Mark FrankelReturn to top
An Internet Boost for the Bells
The Federal Communications Commission has given the Baby Bells more leeway to get into high-speed Internet access. On Sept. 15, the agency redefined the parts of a phone network a Bell must lease to new local competitors. The FCC did not include parts of the network necessary to offer data services. That will give the Bells more incentive to invest in new services. Lawmakers have been pressuring the FCC to give the Bells more breaks to help them move into Internet services more quickly.Edited by Mark FrankelReturn to top
Vencor Is on the Critical List
Is it code blue for Vencor? On Sept. 14, the nation's largest operator of long-term health-care facilities filed for Chapter 11 bankruptcy. The Louisville outfit, which lost $651 million in 1998, previously had its stock delisted by the New York Stock Exchange. It also faces lawsuits for allegedly padding Medicare bills and is under investigation by the Justice Dept. "It's in a very difficult situation, but it will probably will survive as an operating company," says Stephen O'Neil, an analyst at J.J.B. Hilliard, W.L. Lyon, a Louisville investment company. Vencor officials could not be reached for comment.Edited by Mark FrankelReturn to top