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In Business This Week: Headliner
Kirk Kerkorian: The Real Mr. Chips
Even after striking a deal to buy Mirage Resorts for $6.4 billion, MGM Grand and its billionaire majority shareholder, Kirk Kerkorian, may not have played their final hand.
With industry consolidation expected, Kerkorian watchers say he may bid for another company as gaming expands in Atlantic City, N.J., and elsewhere. While stock prices at other casinos have fallen in recent months, MGM Grand just announced record earnings and cash flow. Some Wall Street analysts figure that gives Kerkorian, 82, the stakes for such companies as Tropicana parent Aztar, Boyd Gaming, or even behemoth Mandalay Resort Group. Kerorkian, who plans to build in Atlantic City, wants to add to his holdings in Las Vegas, Detroit, Australia, and South Africa.
Other companies may also enter the game, including Harrah's and Park Place, which operates Bally's and Caesars. Still, with a personal stake estimated at more than $10 billion and an appetite for growth, it could be hard to outbid Kerkorian.By Ronald Grover in Los Angeles; Edited by Anne NewmanReturn to top
Is Toys `R' Us Back in the Game?
It's too early to call a turnaround at Toys `R' Us, but at least the toy seller has managed to please Wall Street. Despite a 24% drop in profit for the year, its Mar. 8 earnings announcement exceeded analysts' estimates. Says Arcadia Invesment analyst John Taylor: "It's not in damage-control mode anymore." Despite costs for launching its Web site, low-margin video games, and few hot products at Christmas, new CEO John Eyler says the year ahead looks better. There's certainly room for improvement. In 1999, sales rose only 6%, to $11.9 billion. Eyler recently joined with Softbank to rev up its e-biz site, which had $49 million in sales last year. But it's unclear whether investors, who have lopped off a third of the stock's value in the past year, will come back to play.Edited by Anne NewmanReturn to top
Cisco's European Consultant
Networking giant Cisco Systems continued its push to bolster the strategic consulting services it offers through outside firms. On Mar. 8, Cisco inked an $835 million deal with European consulting powerhouse Cap Gemini to form a new joint venture, based in France, that will offer Internet equipment and consulting to major customers in Europe and elsewhere. Cap Gemini, with $4.1 billion in revenues, will receive a $671 million equity infusion from Cisco; the joint venture, funded with $164 million in Cisco cash, will start life with a $3.4 billion market cap, 4,600 employees, and deep relationships with the sort of customers Cisco is eager to snag.Edited by Anne NewmanReturn to top
A Big Boost for the Wireless Web
A wireless Web is closer. Big e-retailers such as Amazon.com and eBay love the idea that shoppers could place orders using wireless screen phones or even by speaking to computers that understand speech. But retooling their Web sites for wireless and voice access is no mean feat. On Mar. 13, startup ViaFone will unveil a solution: an online service that adds such access to e-tailers' existing systems, letting them jump into the wireless market much sooner. With a team of seasoned telecom and software execs, ViaFone could accelerate availability to wireless shopping--and add new meaning to the idea of surfing at the beach.Edited by Anne NewmanReturn to top