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The job of building a larger and more loyal audience for CNN falls to a veteran print journalist who got his start covering the cops in his native New Orleans. Walter Isaacson, Time Inc.'s editorial director, was promoted July 9 to CEO of the CNN News Group (AOL
). Isaacson, 49, succeeds Tom Johnson, who retired. Isaacson's challenges include winning back viewers who have been snagged by aggressive competitors such as Fox News, MSNBC, and CNBC. He also inherits a staff whose morale was damaged by parent AOL Time Warner's decision earlier this year to cut more than 10% of CNN's 4,000-person workforce.
To attract viewers Isaacson will put together an hour-long, prime-time news show whose content will sometimes draw on Time Inc.'s magazines. And he will relaunch CNN's Headline News, giving it "much more urgency." To further cut costs, he's also considering an alliance with CBS News. "CNN won't just be content. It'll be about good reporting," Isaacson says. But will viewers stay tuned without constant crises? Merrill Lynch (MER
), the country's largest retail broker, took a step to restore investors' faith in Wall Street's stock recommendations. On July 10, the firm prohibited its analysts from purchasing shares in companies they cover. If the analysts already own stock in the industries they rate, they must either sell the securities, transfer them to a managed account, or abide by stricter disclosure rules. Last month, Merrill began to disclose on the front page of all its research reports that the firm "has or may have" investment banking relationships with the companies that its analysts are ranking. Credit Suisse First Boston, Citigroup (C
), J.P. Morgan Chase (JPM
), and Goldman Sachs (GS
) all say that they too are reviewing policies regarding the stock ownership of their analysts. Siar Capital head Jack Silver was fined $50,000 by the Securities & Exchange Commission on July 5. According to the SEC's complaint, not only was Silver late in registering his holdings in printing-technology outfit TransAct Technologies, which were above 5%, but he also neglected to notify the SEC in a timely manner when he sold the shares, between August and late October, 1997. Silver was quoted in BusinessWeek's Sept. 22, 1997, "Inside Wall Street" column, when he cited TransAct Technologies as a takeover candidate. The SEC alleges that Silver sold TransAct stock at about the time the BusinessWeek story appeared, knowing that no takeover would occur. Silver did not admit or deny the SEC's allegations. Although the SEC said the BusinessWeek interviews took place months prior to publication, they actually occurred within the previous week, according to columnist Gene Marcial. On July 10, New York-based Amerada Hess (AHC
), an integrated oil company and one of the East Coast's biggest gasoline retailers, agreed to buy Dallas-based Triton Energy (OIL
) for $3.2 billion in cash and debt. The $45-a-share offer represents a 50% premium to Triton's shareholders and underscores how far the oil exploration and production company has come since 1998, when it lacked funds to develop oil fields. Triton regained its footing, thanks to new leadership, a massive oil discovery in Equatorial Guinea, and strong crude oil prices. Sears Roebuck (S
) CEO Alan Lacy made his boldest move yet. On July 10, the retailer said it would exit the cosmetics and skin care business and scrap its joint venture with Avon Products. Sears' $45 million in annual beauty-care sales mostly came from its Circle of Beauty brand. Started by Lacy predecessor Arthur Martinez, the brand was unprofitable, according to analysts. The move is a setback for Avon (AVP
), which last year trumpeted its plan to launch BeComing, a new brand, through Sears and J.C. Penney. Bankers have long groused that the Federal Reserve Board didn't have anyone with nitty-gritty financial-regulation expertise. On July 10, however, President Bush nominated former American Bankers Assn. President Mark Olson, 58, to the seven-person board. Having most recently served as a staffer on a Senate Banking subcommittee on securities, Olson is the second banker recently nominated. On June 8, Bush tapped Susan Schmidt Bies, executive vice-president of First Tennessee National in Nashville. Their expertise could be crucial to the Fed's new role as "umbrella supervisor" for the financial industry. -- Compaq Computer (CPQ
) lowered second-quarter profit figures.
-- Troubled Xerox (XRX
) eliminated its dividend.
-- The FDA delayed approval of Genentech's asthma drug.
-- California and power companies failed to reach a compromise on outstanding bills. The record earnings run of wireless-software maker Comverse Technology (CMVT
) stopped July 11. Shares fell 33%, to $25.97, after it warned that earnings will drop 22% this year. Previously the company posted annual sales jumps of about 35%. While management says earnings will resume growth next year, analysts say there's no guarantee until customers start spending again.