In Business This Week: Headliner
Douglas McCormick: A Way with the Ladies?
After years of sniping at each other, the two largest online women's sites are joining forces to try to survive the harsh Net environment. On Feb. 5, beleaguered iVillage announced a complicated merger with rival Women.com Networks in a $36 million deal.
Hearst, which owns 46% of flagging, money-losing Women.com, will invest $40 million in the combined company. "This will be a WNBA kind of slam-dunk for advertisers," says iVillage CEO and President Douglas McCormick. Both Net companies suffer from a double whammy of pessimism about dot-coms and declining online ad sales. Women.com is treading water at 70 cents, while iVillage is trading at $2.375. Merging with a rival is a scrappy move by McCormick, who took over in August from controversial founder Candice Carpenter. An Old Media veteran, he is applying his past experience as head of Lifetime Television to instill the basics: cutting costs and narrowing losses. From hanging by its fingertips, iVillage has moved to having a foot on the ledge.By Heather Green; Edited by Monica RomanReturn to top
Mexico Gets Muddier for Xerox
Xerox's Mexico scandal has been enormously costly: The company took $120 million in charges last year to cover bad debts and accounting lapses from a business with just $400 million in revenues. Having just concluded an independent investigation, Xerox now says that it has corrected any problems there, which it attributed to rogue managers who tried to "drive growth at any cost"--either by neglecting to write off bad debts or failing to classify transactions correctly as a sale, lease, or rental. While Xerox says it has fired managers and taken all appropriate actions, the Securities & Exchange Commission is not done investigating the matter. It notified Xerox in June that it had begun looking into accounting issues in Mexico, and Xerox now says that the SEC has widened its investigation beyond Mexico.Edited by Monica RomanReturn to top
The World Is in Rupert's Sights
Aiming to be the world's first global broadcaster, Rupert Murdoch is soon expected to announce a complex deal to merge GM Hughes's DirecTV unit with Murdoch-controlled satellites in Britain and Asia. The deal, long rumored, would require an estimated $5 billion cash infusion from software giant Microsoft and John Malone's Liberty Media, a major shareholder in Murdoch's News Corp. To resolve difficult negotiations about the value of the deal, GM is expected to spin off its Hughes Electronics unit, taking a 64% stake in the merged company. Murdoch, however, would retain control of the satellite operations.Edited by Monica RomanReturn to top
Say It Ain't So, Tokyo Joe
When it comes to stocks, speech isn't so free--even on the Net. One of the best-known gurus of the stock chat rooms, "Tokyo Joe," has reached a tentative settlement of fraud charges with the SEC. The commission says Joe--whose real name is Yun Soo Oh Park--took gifts from companies to promote their stocks in his e-mails and Web pages. He was also charged with "pump and dump"--buying shares, recommending the stock to his subscribers, and then selling as the price rose. Park's attorneys claimed his stock advice was constitutionally protected speech, but were rebuffed twice by appeals courts. Under the deal, Park will likely cough up $750,000 in trading profits.Edited by Monica RomanReturn to top