For onetime poker hustler Charles Ergen, it is a no-lose hand. Even if Ergen's EchoStar Communications (DISH) satellite service doesn't win DirecTV, his $28.8 billion bid is sure to delay General Motors' (GM) eventual sale of the satellite service to Rupert Murdoch's News Corp. (NWS)
Analysts believe that may be Ergen's real aim. He faces long odds to get antitrust approval to combine the No. 1 and No. 2 satellite outfits, and many believe he will have difficulty raising the $6 billion in cash that GM wants. But the longer a News Corp. deal is stalled, the more subscribers Ergen's EchoStar's DISH Network gains. Industry leader DirecTV, with 10 million subscribers, has been losing market share; it has added only 515,000 new subscribers this year. That has been good for the 6.1 million-subscriber Echostar, which has pumped its tally by 710,000 over the same period.
Still, Ergen says he would put up cash if GM wants, and Swiss equipment maker Kudelski Group has said it would put up $1 billion. GM said it will continue to negotiate with News Corp. while it reviews the Echostar bid. Although its fortunes have already been badly tarnished this year, Cisco Systems (CSCO) is still being battered. On Aug. 7, the giant maker of equipment that routs traffic over the Internet and corporate networks reported that net income for its 2001 fourth quarter plunged 99%, to just $7 million. It posted $4.3 billion in fourth-quarter sales, down 25% from a year ago. Even though demand for networking gear from U.S. corporations may finally be leveling off, Cisco's global sales to telecommunications companies were down more than 10% from the previous quarter. Cisco's markets in Europe, Japan, and other parts of Asia remain particularly tough. "While we would like to say the bottom has been reachedwe don't think we're there yet," says CEO John Chambers. "We hope to be there in the next quarter or two." Cisco's shares dropped 4% one day later, to $18.50. Finally, some good news for Ford Motor (F). After a year of bad press over its involvement in rollover accidents, Consumer Reports rated Ford's new 2002 Explorer sport utility the best among six midsize SUVs. Ford's bestseller beat out the GMC Envoy, Toyota 4Runner, Jeep Grand Cherokee, Dodge Durango SLT, and Nissan Pathfinder. The accolade should help restore consumers' faith in the vehicle's safety--and provide a much-needed sales boost. Although the Explorer boasted strong sales of 36,000 vehicles in July--just 3,000 shy of a record--analysts caution that Ford achieved that with incentives that averaged more than $3,000 per SUV. The chairman of popular net search company Google, Eric Schmidt, 46, added CEO to his title on Aug. 6. The ex-CEO of Novell (NOVL) will guide the company, now one of the 15 most-visited Web sites, through some pivotal business milestones. The three-year-old, privately held online company is targeting this year's third quarter to reach profitability. It's a lofty goal, since Google gleans over half of its revenues from Internet advertising--a business model that has faltered for many other Internet firms. The rest of Google's sales come from selling its search technology to other companies--something that could have more appeal to investors as the search firm eyes an initial public offering in 2002. The Beanie Baby collectors who got eBay rolling can now buy a home on the site to store all those critters. On Aug. 7, the online marketplace said it will buy privately held HomesDirect, a Web site based in Pasadena, Calif., that auctions off foreclosed properties. Although the acquisition will have little impact on revenues this year, it fills a gap for eBay: Even on its home turf of California, it currently lists fewer than 120 home auctions--not nearly enough to fulfill its goal of becoming a mainstay in the lucrative real estate market. Beset by falling demand for personal computers, Gateway (GTW) will close its manufacturing-and-sales operations in Britain and Ireland. It may also stop selling PCs in Europe and Asia. The move is the latest in a series of cost-cutting efforts undertaken by the San Diego-based PC maker. Last quarter, Gateway posted a net loss of $20.8 million, down from a profit of $118.2 million in the same period last year. In general, Gateway's overseas performance has been miserable, with unit sales down 46% in Europe alone. Earlier this year, the company bailed out of Germany and Sweden. -- China agreed to buy 36 Boeing 737 jets worth some $2 billion.
-- Consumer Product Safety Commission chairwoman Ann Brown will resign by Nov. 1.
-- BMW's net income more than doubled on sales increases in the U.S. The bloom is off the rose at Conseco a year after ex-GE star Gary Wendt took over. Over two days, shares of the Carmel (Ind.) financial-services outfit crashed 23%, to $11. Citing weak loan quality and slower annuity sales, Conseco reported on Aug. 6 a $25.7 million second-quarter loss and lowered its forecast for 2001.