Job No. 1: improving Fidelity's mutual funds, a unit with $907 billion under management. In 1999, Fidelity's U.S. diversified equity funds ranked a poor eighth among the top 10 fund families, and they ranked fifth last year, according to Morningstar Inc.
To get Fidelity back in shape, Johnson, a former stock analyst and manager of several Fidelity funds, may have to close some big funds while giving key fund managers more flexibility on where they can invest. She isn't giving out any specifics, but she vows: "I'll have my own mark that I leave on things, for sure." Jetblue Airways, one of the most successful startups in airline history, is spreading its wings. The 15-month-old carrier, with a hub at New York's John F. Kennedy International Airport, will create a new base for its low-fare service from Long Beach Airport near Los Angeles. JetBlue hopes to copy its successful New York strategy: serve a heavily populated area and gain a foothold at an underused airport. JetBlue received the 27 remaining open slots at Long Beach and has two years to use them. On Aug. 29, it will start service from Long Beach to JFK twice a day, with one-way fares ranging from $129 to $299, or more than 70% less than existing fares in the market. The airline, backed in part by financier George Soros, plans to expand Long Beach service to as many as 15 cities over the next two years. "You've got a price hike" was America Online's (AOL
) morning greeting to around 20 million U.S. subscribers on May 22. In a widely expected move, AOL Time Warner's flagship online service said it was raising its standard monthly Internet access fee by $1.95, to $23.90, starting in July. It was the online service's first price increase in three years. The news buoyed AOL Time Warner's stock price on analyst forecasts that the move will add $500 million in revenues the first year. Other Internet service providers are expected to follow market leader AOL's fee hike. Procter & Gamble (PG
), seeking to rev up sales, disclosed on May 21 that it would buy Bristol-Myers Squibb's (BMY
) Clairol hair-care business for $4.95 billion. P&G outbid Kao of Japan to enter the fast-growing market for hair-color products, where Clairol ranks No. 2. P&G would also get big shampoo brand Herbal Essences. But the company's shares fell 3% on the news, reflecting skepticism about the deal. While the acquisition would boost P&G's sales by 4%, it also would dilute earnings for at least a year. Will he or won't he? Charles Ergen, the wily chairman of TV satellite company EchoStar, is hinting he will disrupt News Corp.'s (NWS
) bid to buy General Motors' (GM
) DirecTV service with an offer of his own. On May 22, Ergen said he would borrow $1 billion to buy satellites and make "strategic investments and acquisitions." Ergen says a merger with DirecTV would be a "better fit," but skeptics think he just wants to force Rupert Murdoch to overpay for DirecTV's 11.2 million U.S. and Latin American subscribers. If a GM deal went through, Murdoch would merge DirecTV with News Corp. satellite holdings in Europe, Latin America, and Asia. It started nearly a year ago as a probe into an accounting scandal at Xerox' (XRX
) Mexico unit, and now the Securities & Exchange Commission is scrutinizing accounting practices at the copier giant's worldwide operations. The latest allegations come from a former assistant treasurer, James Bingham, who earlier sued Xerox for wrongful termination. Bingham has told the SEC that Xerox in 1999 sold future rental income to Citibank, netting revenues of $142 million. That would equal 7% of Xerox' profits in the second and third quarters of 1999, when the transactions allegedly took place. A Xerox spokeswoman says Xerox did not publicly report them because they were "not at a level that required disclosure." -- Goldman Sachs (GS
) is letting go of 150 investment bankers.
-- Citigroup (C
) is dropping the name Salomon from its brokerage and investment banking units.
-- Trendy shoemaker Steve Madden pleaded guilty to stock fraud charges. Medtronic Inc. (MDT
) shares fell 6% on May 23, after it said its cardiac-defibrillator business had slowed. It made the disclosure in its fiscal fourth-quarter results, noting that annual sales growth of the devices, which treat fast heartbeats, had eased to 6%, down from more than 20% a year ago. Medtronic blamed a work backlog among doctors who install the devices. That has some analysts convinced that growth could pick up later this year.