"It's a long season. I've been knocked on the hardwood before." -- Ex-Knick Bill Bradley, on his loss in the Iowa Democratic Presidential caucusEdited by Robert McNattReturn to top
The New Geek in Town: GM
General Motors, a classic Rust Belt company, is seeking a California state of mind. Just weeks after announcing plans to open a design studio in North Hollywood, GM now wants office space in San Francisco for its online commerce unit, e-GM.
Mark Hogan, e-GM's president, says he wants the business near the pulse of Silicon Valley. In the past six months, GM has formed alliances with several Internet and software players, aggressively seeking to establish online relationships with vendors and dealers. Many of GM's new partners, such as B2B software concern Commerce One and Internet service provider NetZero, are in California. "You gotta be out there," says Hogan.
The California office will start with 20 to 50 employees and could grow to as many as 200 people, depending on business. GM Chairman John Smith Jr. says the company's forthcoming TradeXchange, an online parts trading system, could already be worth billions. Hogan adds that if GM can expand that business as planned, TradeXchange could be the world's largest B2B trading system, handling $500 billion worth of goods.
And there's nothing Rust Belt about that.By David Welch; Edited by Robert McNattReturn to top
Iridium Isn't Space Junk Yet
In a dramatic reversal, wireless pioneer Craig McCaw is returning to the negotiating table to cut a deal to buy the bankrupt satellite-telecommunications company Iridium. In December, the talks between Iridium and McCaw looked dead because he couldn't reach terms that made financial sense: Iridium has been generating only about $10 million in revenues while Motorola is supposed to be paid more than $400 million annually for maintaining and operating the system.
What has changed? According to sources close to McCaw, Motorola now is willing to slash its charges to $100 million per year for the work. Another scenario is that Motorola would run Iridium for nothing for a year or two, getting paid further down the road when Iridium is in the black.
Finding a solution is important because Motorola could face legal action from bondholders if Iridium goes down for good, since the company conceived of the system for global long-distance calling and helped raise the $5 billion to finance it.
How certain is a deal? A source close to the Seattle billionaire says that the chances of success are "about 75%." Motorola declined to comment.By Peter Elstrom; Edited by Robert McNattReturn to top
A Fact Factory for the New Economy
Two big names in the practice of management, the Sloan School of Management at the Massachusetts Institute of Technology and consultant Arthur Andersen, are going into the think-tank business together. They'll be forming a research center in Cambridge, Mass., dubbed the New Economy Value Research Lab. Its purpose? To study and come up with hard, quantitative valuations of the intangible assets Wall Street finds increasingly important in the New Economy.
Such assets as customer and supplier relationships, brands, and organizational structures are usually too fuzzy for economists to value. But putting a number on them, say the founders, is crucial to all business. "Even the Coca-Colas and Disneys of the world are actually creating most of their value from assets that don't appear on their balance sheets," says Richard Boulton, Lab co-chair and managing partner at Arthur Andersen.
Andersen will chip in $10 million; Sloan will provide the staff. But research won't be tilted toward Andersen's customers, says Donald Lessard, deputy dean at Sloan. "We're in the business of research and education. We're not in the business of servicing clients."By Joan Oleck; Edited by Robert McNattReturn to top