In Business This Week: Headliner
Leo Hindery Jr.: Hanging Up with No Hard Feelings
Mission accomplished. That was the parting message from Leo Hindery Jr. as he announced his resignation as head of AT&T's cable operations on Dec. 7. "It was my job to get the company running right and then sell it," says the former president of Cable giant TCI, which was acquired by AT&T earlier this year for $44 billion. Now the 52-year-old Hindery joins an AT&T competitor, long-distance upstart Global Crossing.
He'll be the new chief executive of the company's wholly owned GlobalCenter, which provides Internet switching services for Yahoo!, eToys, and the 300 largest Internet services. Hindery figures he can take the $200 million-a-year company public sometime in mid-2000.
As for AT&T, where he had frequent disagreements with company Chairman C. Michael Armstrong, Hindery professes not to have any hard feelings. "The guy who sells the company rarely is around to run it," he says. AT&T, says Hindery, just might end up being a GlobalCenter customer as well.By Ronald Grover in Los Angeles; Edited by Mark FrankelReturn to top
Taking Aim at Project Shootings
The Clinton Administration has the handgun industry in its sights. The White House and the Housing & Urban Development Dept. are preparing a class action against gunmakers. The suit claims that the industry, through negligent marketing, has contributed to deaths in public housing projects. The move has political merit: By focusing only on public housing violence, it contains the debate to urban areas, where support for gun control is strongest. It also preempts attempts by conservative state legislatures to block municipalities from suing the industry. But the case remains a gamble. Similar lawsuits filed by cities and counties so far have had mixed success, with many being tossed out of court.Edited by Mark FrankelReturn to top
From Murdoch, a Health Bulletin
In one of the biggest meldings of old and new media yet, Rupert Murdoch is pushing into online health programming and services. On Dec. 7, his News Corp. announced a $1 billion deal with Healtheon/WebMD. The company will acquire 10.8% of Healtheon. As part of the deal, Healtheon agrees to conduct its advertising and marketing through News Corp.'s international media assets, including the Fox network. News Corp. is also folding in 50% of its new cable channel, Health Network.Edited by Mark FrankelReturn to top
Cendant Settles--for Now
Cendant chief executive officer Henry Silverman wants to put his company's troubled past behind him. On Dec. 7, the company announced it had struck a $2.8 billion settlement of the class action brought by shareholders in the wake of the company's 1998 accounting blowup. In addition, the company will take steps to improve its corporate governance. The reforms include a move to have company directors face annual elections. Cendant's stock, now trading at 19 1/8, is so low, according to analysts, that the company could become takeover bait.Edited by Mark FrankelReturn to top
Falling PC Prices? No Longer
After years of seeing PC prices plummet, consumers could well see some increases now. In November, the average price of a PC sold in U.S. stores rose by $160, according to market researcher Allison Boswell Consulting. The reason: shortages and price hikes on parts, caused by the Sept. 21 Taiwan earthquake. That could reduce overall PC production in the quarter, limiting growth to 20% or so. To maximize profits, manufacturers have reduced production of sub-$600 computers to focus on more profitable models. Boswell says sub-$1,000 PCs were just 57.1% of units sold in November, down from 82.4% in October. And the slightly higher prices could hold steady for the next year.Edited by Mark FrankelReturn to top