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In Business This Week: Headliner
Jay S. Walker: The Price Isn't Right, But...
Jay Walker, founder of the name-your-own-price Internet phenom Priceline.com, said on Aug. 1 he will sell a slug of his stock for $190 million to Microsoft co-founder Paul Allen and cable mogul John Malone. But it's clearly at a price Walker wouldn't have named--Malone's Liberty Media and Allen's Vulcan Ventures are scooping up 8 million shares at a bargain-basement $23.75 each.
Walker structured the deal so the stock, well off its 52-week high of 104 1/4, won't come under more pressure. Although Liberty and Vulcan won't buy the shares for at least a year, Walker already plans to put $125 million into another brainchild, Priceline WebHouse Club, a name-your-own price business for groceries.
Walker, who still owns 50 million Priceline shares, concedes "this isn't the greatest time for me to price a transaction." But, he says, "I get Paul Allen and John Malone as strong, long-term investors." But that may not be enough for investors to start naming higher prices for Priceline's stock.By Pamela L. Moore in Greenwich, Conn.; Edited by Anne NewmanReturn to top
Where Angels Dare to Tread
Nasdaq's shakeout made the venture-capital well a little drier in the second quarter, but there's still plenty of money out there to start the right kind of company. VentureOne, a San Francisco consulting firm, says venture-backed companies raised $17.2 billion between April and June, down 6% from the first three months of 2000. The hit was taken by consumer e-commerce companies. Investment there fell 32% and accounted for only 3% of second-quarter Internet-related funding. Companies making Net infrastructure took up the slack, with funding up 29%. Silicon Valley is betting on the oldest rule of Web investing: The one thing you know for sure about the Net is it needs to be built.Edited by Anne NewmanReturn to top
Sears Dumps Dr. Laura
Scratch Sears Roebuck off radio talk-show host Laura Schlessinger's list of advertisers. The retailer became the latest to pull its ads from the nationally syndicated show because of the host's negative views on gays and lesbians, whom she has described as sexually deviant. "We support diversity," a Sears spokeswoman says. It joins big-name advertisers Procter & Gamble, Xerox, and United Airlines in dropping the show. Advertisers clearly don't want to offend the gay community, a powerful spending force. Gays and lesbians are twice as likely to have incomes over $60,000 than heterosexuals and together spend nearly $450 billion a year, said Harris Interactive and Witeck-Combs Communications.Edited by Anne NewmanReturn to top
Nortel's New Help Line
Customer support isn't Nortel's forte. Building fiber-optic networks is. So the high-flying, Brampton (Ont.) company turned its computer-support services over to Computer Sciences on Aug. 2. Nortel, the world's No. 2 network-equipment supplier, said it expects to move 2,000 employees to the El Segundo (Calif.) company by Oct. 1 as part of a seven-year, $3 billion deal. Nortel, which agreed to pay $7.2 billion for Alteon WebSystems on July 28, has made nine acquisitions in the past year in its drive to dominate optical networking. Execs say outsourcing computer services will help Nortel save money--perhaps adding more cash to its war chest for big deals.Edited by Anne NewmanReturn to top