"If you don't have inheritance taxes, Bill Gates's family -- in 50 or 75 years -- is going to own the whole country." -- Ted Turner explaining his support for the estate tax
How serious is Morgan Stanley's (MWD) brain drain? By BusinessWeek's count, at least 50 bankers, traders, and brokers have exited -- from Hong Kong to New York -- since Mar. 28. That's when CEO Philip Purcell selected Zoe Cruz and Stephen Crawford as co-presidents -- passing over Vikram Pandit, chief of its institutional securities unit. Among the departed are 24 managing directors.
That number may not be unusual: 75% of those leaving investment banks in any year do so by June -- after bonuses. What's worrisome is who's walking. "The people leaving are not underperformers," says Richard Lipstein of Boyden Global Executive Search. Morgan's management committee has lost five of the 14 members it had as of Mar. 28. (Morgan says it has since boosted the number of people on the committee to 15.)
Many dropouts are in key areas like investment banking and commodities trading. And they are defecting to JP Morgan Chase (JPM), Merrill Lynch (LEH), and Deutsche Bank (DB). As always on Wall Street, money talks, or people walk.
In addition to being the world's richest man and a computing pioneer, Bill Gates has another notch on his belt: best-selling author. His first book, The Road Ahead, sold 2.5 million copies in 1995, putting it in the lofty company of other best-sellers that year, such as Howard Stern's Miss America and Deepak Chopra's The Seven Spiritual Laws of Success.
BusinessWeek has learned that the Microsoft (MSFT) co-founder is in the preliminary stages of writing a new book a decade after his first. He is also close to a deal with a co-author, whom the company declined to name. And Gates's representatives have begun meeting with book execs to gauge their interest. The software giant won't say when Gates hopes to see something in print.
Like The Road Ahead, this book will predict how technology will transform the way people communicate, work, and entertain themselves. It will explain how technology can address issues central to Gates's philanthropy: world health and education. Says spokesman John Pinette: "It's going to talk about where the next technical breakthroughs are coming from and the impact they'll have." It won't pad Gates's bank account, though -- his proceeds will once again go to charity.
Genentech (DNA) CEO Arthur Levinson is having a very good year. His company's three leading cancer drugs grabbed headlines at a big conference in early May, with studies showing that all three improve survival. Levinson, 55, says they beat even his expectations. Now he's trying to keep Genentech from resting on its laurels.
Pressure for bigger results is sure to come from investors and the cancer-care community. But Levinson insists he'll stick to his goal of investing in long-term shareholder value. "I will never trade off our drug pipeline to improve next year's earnings," he says.
Genentech has always set out to prove its cancer drugs can extend life and not just shrink tumors. "We are asking patients to pay a lot for these drugs," Levinson says. "We don't want them to pay for an incremental benefit." Since some of the drugs can cost $40,000 for a course of treat-ment, patients will likely agree.
What do Paris Hilton's cell phone and ChoicePoint (CPS) have in common? They've both been hacked, proving once again that no private data are guaranteed to be secure. But while privacy paranoia has some consumers scrambling to keep a tighter rein on precious personal info, younger adults and teens are headed in the other direction. They're revealing more and more of themselves in cyberspace, divulging substantial private details through databases from social networking sites to personal Web logs.
At Thefacebook.com, a site launched by a Harvard University undergrad in 2004 that has blossomed into a campus phenomenon, more than 2.5 million users from 650 schools post stats ranging from their full names and hometowns to class schedules. In fact 35% of members even list their cell numbers, which thieves increasingly use in lieu of Social Security IDs to tap into personal records. At networking site Friendster.com -- which has 16 million users, up from 1 million two years ago -- profiles include anything from birthdays to previous employers, blogs, and uploaded photo albums.
Officials at TheFacebook and Friendster say they adhere to strict privacy guidelines, and users can limit who accesses profiles. But ChoicePoint also had tight restrictions. Experts warn that simply by loading so much into a database, members of virtual communities expose themselves to identity theft, credit fraud, and future embarrassment (when info pops up 20 years down the road). Still, that may not be enough to dissuade a generation that grew up online. Expect ever more specialized sites -- and juicy revelations -- as these users age.
Facing the prospect of bankruptcy, Delta Air Lines (DAL) is out scrounging for every penny. Its latest move: demanding that Wichita rescind $2.5 million in subsidies to rival AirTran Airways (AAI) or cough up the same for Delta. Delta enlisted the help of the FAA, which ruled on Apr. 6 that the cash paid to AirTran for serving the local airport is discriminatory.
"We are saying to the city either eliminate the subsidy or give it to everyone," says Delta spokeswoman Benet Wilson.
In a scathing response to the FAA on May 16, Wichita says Delta didn't cut its "monopo-listic airfares" until AirTran arrived in 2002. Telling the city to subsidize Delta, the letter says, "is like telling the shepherd that he must feed the wolf." The FAA is planning a response. Meanwhile, Wichita is learning how uncomfortable it can be to get caught between an ailing airline and a pile of cash.
Is Diebold (DBD), the ATM giant, using its clout to stymie competitors? That's the claim of a trade group for outfits that service the money machines. On Apr. 18, the Financial & Security Products Assn. (FSPA) filed a motion in U.S. District Court in San Francisco seeking relief. FSPA claims Diebold illegally cuts competition by limiting access to technology needed to service roughly half of U.S. ATMs. The North Canton (Ohio) company denies the charge.
There's a ton of cash at stake. An ATM generates service fees of $1,500 to $3,000 a year, say analysts; Diebold's service revenues came to $883 million in 2004. Outside firms used to handle everything from routine maintenance to parts replacement. Then in 2003, Visa and MasterCard demanded a new data-encryption standard. Diebold refused to sell upgrade kits to outsiders, saying it worried that thieves might swipe enhanced security keypads. Diebold says this changed after the FSPA complained, but FSPA members who tried ordering from Diebold say the parts never materialized. Maybe they're using the wrong PIN number.
Will the "SEMA girls" get ticketed? The curvy gals in skintight minis and outfits skimpy enough to make a showgirl blush have been a popular tradition at the annual Las Vegas convention of the Specialty Equipment Market Assn., representing the $29 billion auto accessories industry. But SEMA brass wants to bring dignity to the November event by banning barely-there apparel like lingerie. With 10,000 booths, exhibitors look for anything to draw attention to their wheels, truck-bed liners, and other add-ons. Show regulars are outraged. Gripes blogger Peter DeLorenzo at autoextremist.com: "The SEMA show without the scantily clad babes would be like the Kentucky Derby without mint juleps or big hats."
Text messaging may be the latest in written communication. But it's not the fastest. A 93-year-old telegraph operator recently whipped a teenaged texter in a speed contest at Sydney's Powerhouse Museum. Gordon Hill took 90 seconds to dot-dot-dash the line: "Hey, girlfriend, you can text all your best pals to tell them where you are going and what you are wearing." Brittany Devlin, 13, was 28 seconds behind with her cell phone, despite using slang like "u" and "wot." Telegraphy might be the next big thing -- if only it could send smiley faces.