In Business This Week: Headliner
Donald Keough: Now Things May Go Better
Call it the second coming of Donald Keough. After retiring from a legendary 43-year career at Coca-Cola in 1993, Keough was treated as persona non grata by M. Douglas Ivester, who succeeded him as president and later became CEO. When Keough sent Ivester a memo last October offering advice on how to handle the contamination scare in Europe and a discrimination suit back home, Ivester sent a curt thank-you note.
Ivester is gone, but his successor, Douglas Daft, has no problem tapping Keough's wisdom. Daft has long sought Keough's advice, but on Oct. 23, he made the relationship official by naming Keough as a special adviser to the board of the Atlanta behemoth.
Daft's gesture should also play well with Coke's star-studded board, which had grown weary of Ivester's go-it-alone style of management. Keough, 74, was a childhood friend of fellow Omaha native Warren Buffett and serves as chairman of Herbert Allen's New York investment bank. Both Buffett and Allen sit on the Coke board.By Dean Foust in Atlanta; Edited by Monica RomanReturn to top
Amazon's Ebbing Tide of Red Ink
Is the worst over for Amazon.com? Surprising skeptics, the e-tail giant on Oct. 24 reported higher-than-expected third-quarter sales of $638 million and a smaller operating loss of $68 million. The reasons: growing sales of new products such as consumer electronics, coupled with reduced inventories and better deals from suppliers. CEO Jeffrey Bezos also promised operating losses would dip below 5% of an expected $4 billion in sales next year. Investors bid Amazon shares up 8%, to 31 7/8, the next day. But with consumer spending on the wane and Amazon.com still refusing to predict when it will turn profitable, investors are waiting for the critical fourth quarter.Edited by Monica RomanReturn to top
Microsoft Puts Out One Fire
The Justice Dept. isn't the only federal regulator breathing down Microsoft's neck. The Federal Trade Commission is getting its licks in, too. On Oct. 25, the FTC settled deceptive advertising claims with WebTV Networks, a Microsoft service.
The agency accused WebTV of misleading consumers with ads that promised full Internet access and failing to adequately disclose possible long-distance phone charges users might run up. To settle the case, WebTV agreed to run accurate ads, set up a consumer education program, and reimburse customers who canceled the service because of unexpected long-distance charges. "We're willing to be reasonable and get the matter behind us," says Microsoft spokesman Vivek Varma. Now if Microsoft could only shake that other dispute with trustbusters.Edited by Monica RomanReturn to top
Will This Revamp Help Focus Kodak?
Eastman Kodak announced management changes aimed at boosting flagging growth. On Oct. 16, CEO Dan Carp combined seven business units into two and gave responsibility for the company's shrinking professional and commercial imaging business to Martin Coyne, who had run Kodak's health-imaging business. Analysts say the changes are welcome, but won't quickly address Kodak's problems. Its stock tumbled nearly 40% last month after the company reported a sharp slowdown in third-quarter film sales, along with widening losses from sales of digital products.Edited by Monica RomanReturn to top