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George Shaheen: Webvan Nets A Ceo


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George Shaheen: Webvan Nets a CEO

Who can't be seduced by the Web? George Shaheen shocked colleagues when he announced on Sept. 21 that he would step down after 10 years as Andersen Consulting's CEO to run Silicon Valley upstart Webvan Group, an online grocer founded by Louis Borders of Borders Group books fame.

The news left Andersen reeling. Shaheen, 55, departs as Andersen nears the climax of a nasty divorce from Arthur Andersen, the audit giant. Shaheen escalated the fight in 1997 when he filed for arbitration on how to divide the companies. That leaves his lieutenants to handle a possible $10 billion fee Arthur is demanding for Andersen's independence. Shaheen's exit on the heels of e-commerce head Rudy Puryear causes a brain drain. "This really leaves them in the lurch," said an ex-Andersen exec.

Shaheen's not talking, citing Webvan's pending IPO. But some insiders wonder if he can make the shift from a giant bureaucracy to a cozy shop with only $395,000 in sales in the first half of 1999. Maybe he will be able to hire a consultant to help with the transition.By Roger O. Crockett in Chicago; Edited by Mark FrankelReturn to top

Big Tobacco May Cough Up More

The tobacco industry may be facing its biggest litigation assault yet. On Sept. 22, the Justice Dept. filed a civil suit against the largest cigarette companies, charging that they conspired since the 1950s to mislead the public about the dangers of smoking. The government hopes to recover some of the $20 billion it spends each year to treat smoking-related illnesses under the Medicare, veterans, and military health programs. The suit is filed under three federal statutes, including the Racketeer-Influenced & Corrupt Organizations Act (RICO). It accuses Philip Morris, R.J. Reynolds Tobacco, Brown & Williamson Tobacco, and others of withholding information on the effects of smoking. The suit is similar to one settled by the states for more than $200 billion to recover funds paid out by their Medicaid programs.Edited by Mark FrankelReturn to top

Bells Ring for Wireless Carriers

The beat goes on. as U.S. wireless customers demand ever-broader reach from their phone companies, carriers continue to pair up. Bell Atlantic and Vodafone AirTouch said on Sept. 21 that they will merge their U.S. cellular networks, creating the nation's largest wireless carrier. The new company will serve 20 million customers generating more than $15 billion in revenue. A day earlier, VoiceStream Wireless said it will buy Aerial Communications for some $3 billion. The two carriers are licensed to serve 22 of the top 25 U.S. markets. What's next? Analysts expect VoiceStream to go after southeastern carrier Powertel.Edited by Mark FrankelReturn to top

Xerox Adds to Its Shopping Cart

What's the fastest way to develop a product line? Buy it from someone else, of course. That's how Xerox hopes to turn up the heat on Hewlett-Packard. On Sept. 22, the copier giant said it will pay $950 million for the color printing and imaging division of Tektronix. The deal gives Xerox some much-needed color printers in the office market and catapults it to second position behind HP, with a 30% market share. Analysts applaud the acquisition as a healthy addition to Xerox' line and distribution network but aren't racing to pick up the stock just yet. Xerox says its shopping spree is far from over.Edited by Mark FrankelReturn to top


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