"In some ways, we are in competition [with Nike], but I think that's the best competition you can have--competing with your brother rather than an enemy."
--Michael Jordan at the launch of the Jordan brand, a sub-brand of Nike Inc. to be marketed separatelyEDITED BY PAT WECHSLERReturn to top
YOU'RE FLYING COACH, SMEDLEY
BRACE YOURSELVES, ROAD warriors. A forecast of 1998 business travel costs by American Express predicts prices for plane tickets and rental cars will rise as much as 6%. Hotel rates will be close behind, up 4% to 5%.
That's on top of 1997's steep cost runup, estimated at 9%--the greatest annual increase in the past decade. "Corporate travel managers are beginning to pull their hair out," says Victoria Linssen, senior manager of American Express' corporate services consulting group.
The result? Employees are facing less generous travel policies. And frequent flyers are enjoying fewer frills on the road. Two months ago, for example, investment bank Merrill Lynch deleted luxury hotels from a list of approved places to stay. Now, it's Hyatt, Westin, or Marriott. Says Gail Geraughty, corporate travel manager at Hartford-based insurer Aetna: "Even our CEO flies coach."
Some executives are cutting costs by finding travel alternatives, such as videoconferencing. At executive search firm Christian & Timbers in Cleveland, CEO Jeff Christian says recruiters have cut travel days from three per week to two. But, he admits: "We still need to look a client in the eye at some point."EDITED BY PAT WECHSLER Lisa SandersReturn to top
EVEN A TYCOON CAN'T GET GOOD HELP
FINANCIER GEORGE SOROS took a long, hard look at the outside money managers he hires on a contract basis to handle the portfolio for his $2.5 billion Quasar International fund and decided a radical change was needed. So, in the past few weeks, a flurry of "Dear John" letters were sent to the managers across the country ordering them to liquidate their Soros holdings by the end of October. The letters noted that the liquidation should be done "as soon as is practical without jeopardizing the value of our assets."
What's the beef? Lousy performance. With so many outsiders managing a piece of the six-year-old fund, the portfolio's strategy was a hodgepodge of investment styles. Quasar lagged other offshore funds and some of Soros' own funds, including the $2.9 billion Quantum Industrial Holdings. Year to date, Quasar was up 12% and Quantum Industrial up 22%. Quasar will now be managed in-house like QIH is.
Meyer Berman of M.A. Berman Co. in Boca Raton, Fla., was one of the unlucky few to get nearly $100 million pulled. Berman invested the money mostly by shorting stocks--betting the market would drop. "This gives me time to concentrate on my tennis game," Berman shrugs.EDITED BY PAT WECHSLER Debra SparksReturn to top
MICROSOFT TO PIRATES: PRETTY PLEASE?
WHEN BILL CLINTON VISITS Brazil next month, his entourage won't be the only Yankees practicing the fine art of diplomacy. During the President's stay, Microsoft is set to announce a deal worth $10 million to supply PC software to 300,000 Brazilian public schools. In return, the government will tell teachers to use only legal software. But more broadly, in a country where an estimated 68% of the software in use last year was pirated, Microsoft hopes this public gesture of paying for software--albeit at rock-bottom prices--will set a trend.
The Brazil deal is part of an international initiative by a software industry weary of losing an estimated $11 billion a year to pirates. No longer are companies relying on threatened trade sanctions. Instead, agreements--similar to the Brazilian sale--have been forged by various software makers with countries as far-flung as Egypt, China, and Mexico. "In the past, you'd have a bunch of cowboys going around the world threatening people," says Orlando Ayala, Microsoft's vice-president of international operations. "That's not the way to do it."
The new approach seems to be paying off: Microsoft figures that it booked an extra $100 million in 1997 internationally thanks to its antipiracy efforts.EDITED BY PAT WECHSLER Steve HammReturn to top