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All the Internet Hype Remains Just That

In "The E-biz surprise" (Cover Story, May 12), you say that investors who had put $1,000 each into every e-tailing initial public offering would be up 35% today. That's only because of the extra-low IPO issue prices that investment banks imposed as part of the Wall Street graft machine, which led to the $1.4 billion settlement noted in the same issue ("Will it matter?" News: Analysis & Commentary, May 12). If you had bought new e-tailing issues one day after issue (like anyone who was not an insider), would your investment still be in the black?

Second, you note that B2B e-commerce is going strong, with businesses buying $3.9 trillion online this year. You fail to note that the bulk of this business is conducted by means of protocols, such as electronic data interchange, that substantially predate the Internet boom. For the bulk of firms, the much-hyped Internet-based B2B boom has not yet happened.

Edward Rigdon

Georgia State University

Atlanta The recent securities-firm settlement not only fails to punish those who made the decisions to shaft their clients and commit fraud, but also expediently fails to address the victims of the fraud ("Will it matter?" Analysis & Commentary, May 12). If you want to restore public trust, how about holding real people accountable for their actions? Place a few corporate executives in jail instead of fining their firms, and the next CEO will think twice, and then think again, before he permits nefarious deeds to occur.

Then, how about a federal bankruptcy law that places a cap on the value of the houses that escape financial penalties? Otherwise, why do you think so many tainted executives build $40 million homes in Florida and Texas, two states where there is no cap on the value of a home that can be kept when a person declares bankruptcy?

Until financial crime is taken seriously, it is doubtful that investors will retain confidence in a system that remains structured to favor dishonesty.

Gilbert Held

Macon, Ga.

As a retail investor, I am not looking to hit the lottery. I just want to make a fair profit to provide a little security for my family, a college education for my kids, and a comfortable retirement for my wife and myself. The rise in the number of pro-business thinkers and Republican voters has run a parallel course. Those same people can just as easily turn on Corporate America and the Republicans if they become convinced the game is rigged against them and those in charge do nothing. We now know the game has been rigged.

Will President Bush and the Republicans who control Congress do something about it, or will they do nothing? At least one attorney general barked -- and bit.

Eddie Edwards

Portsmouth, Ohio Toys 'R' Us Inc. (TOY) was presented in an extremely unfavorable light in "Cash: Burn, baby, burn" (Finance, Apr. 28). The "cash efficiency" trend analysis attempted is incomplete without an additional quarter of data, that is, the fourth quarter of 2002. Had the analysis included that data, the Toys 'R' Us score would have been +6% rather than -32%. Compared with other retailers you mentioned, Toys 'R' Us would have scored better than Wal-Mart Stores (WMT) on the "cash conversion efficiency" trend. In addition, our "risk factor" would have been 1 rather than 5, a significant improvement.

Louis Lipschitz

Executive Vice-President and

Chief Financial Officer

Toys 'R' Us Inc.

Montvale, N.J.

Editor's note: Mr. Lipschitz is right. The analysis for BusinessWeek by REL Consultancy Group Ltd. included eight quarters of data for all companies. In the case of Toys 'R' Us, the most recent was its fiscal third quarter through Oct. 31, 2002. Because of its highly seasonal business, the inclusion of its fiscal 4th quarter results would have improved the company's cash conversion score. Your article "B-schools: A failing grade on minorities" (Management, May 12) reflects my own MBA student life. In my experience, minorities have to team up with other minorities to survive. I am not saying that there is open rejection, but you as a minority easily can identify who wants to study with you and who does not. It is sad because the foreign minorities (like me) who are able to afford to pursue an MBA usually are very well-prepared professionals with international corporate experience. B-schools should consider minority students as a source of information (in an educational sense) about international business. We have a lot to show, to share, and also to learn.

Hector Arocha


If relatively few African-American children, compared with Caucasians, graduate from high school and college, naturally they are going to be underrepresented in both the management world and business schools. Believe me, as an MBA recruiter for Anderson University, we look hard for and welcome with open arms qualified blacks and other minorities. We make no qualification distinctions between minorities and whites. If any person is qualified, that's it. I know other schools feel the same. But the numbers just aren't there.

Until the root causes of those high dropout rates are addressed, not much is going to change. Business can help, but can do only so much. One possibility would be for a large company or division to "adopt" one or two public schools in nearby urban areas and provide not only some funding but also the time for employees to regularly go to the schools as volunteer reading, math, and science coaches, mentors, and role models. My day at my school is the highlight of my week. Retirees, give it a try! You can make a difference.

Charles Waldo

Professor of Marketing (retired)

Anderson University

Anderson, Ind.

As a university financial-aid counselor, I see students unable to attend for two main reasons. First, when prospective students hear people such as business-school Dean Thomas J. Campbell of the University of California at Berkeley talk about ending affirmative action, they don't feel comfortable applying to the schools. Next, the well-known public universities have lost their purpose in educating the people of their state at an affordable cost.

Some MBA programs have in-state tuition rates that are more than double the rate for other resident graduate students. The University of Michigan's graduate student tuition is $13,098 per year; for the MBA program, it's $27,686. The University of North Carolina at Chapel Hill's 2002-03 graduate student rate was $4,012 per year; the MBA program was $13,975. The University of Maryland's 2002-03 graduate student rate was around $5,700, while MBA tuition was over $13,000. These rates don't include books, health insurance, and living expenses. Imagine the sticker shock at private schools such as Stanford, Harvard, and Chicago. It's cheaper to get a master's in public administration, public health, education, or even a law degree than it is to get an MBA.

These schools want students from low-income families, who already struggled financially through undergraduate work, to wait two more years to start earning money. And then they are asked to weigh themselves down with more crushing debt to complete the MBA. They refuse, or simply can't do it.

P.J. Studevent

Greenbelt, Md. "Licenses to kill" (Legal Affairs, May 5) contains a statement that is terribly naive: "This idea [of establishing a national ID card with security features such as DNA biometrics or retinal scans] is politically dead, viewed by right and left as an intrusion on personal freedom -- a position that resonates with many Americans." Corporations have easily blocked all attempts to restrict the sharing of financial and medical information about Americans. The desire to have a large pool of easily exploitable illegals trumps all other considerations.

John D. Macdonald

Nanaimo, B.C.

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