One of the most coveted jobs on Madison Avenue, the post of chief marketing officer at Coca-Cola (KO), has been up for grabs three times since 1998, due to bad hires and strategy changes. And on June 22, it changed hands a fourth time: Coke's new chief executive, Neville Isdell, named respected Coke marketing veteran Charles "Chuck" Fruit to replace Dan Palumbo, who is leaving to pursue other opportunities.
Fruit joined the soda giant in 1991 after 15 years at Anheuser-Busch (BUD) and immediately helped develop Coke's long-running "Always" ad campaign. In recent years, he worked alongside Coke President Steven Heyer to freshen up Coke's stale marketing. Fruit also had a big hand in steering Coke away from the ubiquitous 30-second TV spots to newer marketing like Web sites and creating programming for TiVo (TIVO). Now, with Heyer leaving after being passed over for the CEO job, Isdell is betting that Fruit will prevent an exodus of the talented marketing staffers Heyer brought in.
The Securities & Exchange Commission has asked several brokers of so-called auction-rate bonds to examine their operations and provide written reports of any potentially deceptive practices. As BusinessWeek reported ("The SEC's Top Cop," BW, June 21), the agency, under Enforcement Chief Stephen Cutler, is probing whether some Wall Street firms' bond operations took bids from preferred customers after auction deadlines. Industry officials believe the SEC also suspects some brokers of colluding to set prices. Typically, investors buy long-term bonds and submit bids through brokers to set the coupon rate. The lowest bid becomes the rate at which the offering is sold. The Bond Market Assn. didn't comment.
Will the man who symbolizes the corporate-scandal wave, Kenneth Lay, soon be facing charges? The Justice Dept. isn't commenting. But the former Enron chairman's attorney, Houston-based Michael Ramsey, is worried enough about the prospect that on June 21 he made a public request for a last-ditch meeting with federal prosecutors to stave off an indictment. The government's case would probably mirror the one brought against former CEO Jeffrey Skilling and ex-chief accounting officer Richard Causey -- and is likely to focus on the months when Lay reassumed leadership of the company in the summer and fall of 2001.
SBC Communications (SBC) fired the latest salvo in the telecom wars with cable operators. On June 22, the Baby Bell said it plans to invest $4 billion to $6 billion beginning this summer to string fiber closer to millions of customers over the next five years. By laying fiber deeper into neighbor-hoods, SBC can introduce digital-TV service using a platform by Microsoft (MSFT), plus speedy Net and phone service over DSL connections. The move is designed to counter cable rivals who have been invading the Bells' turf with offers of TV packaged with broadband and new voice service over the Net. The investment is contingent on a regulatory rule change that will clarify what pieces of the network SBC can sell and at what prices.
The chemical industry is feeling the heat. Probes by the Justice Dept. and authorities from countries such as Canada into possible price-fixing in the chemical business have accelerated recently. The two-year-old inquiries, which originally focused on certain chemicals used to manufacture rubber, have expanded to include other products, including urethane chemicals. The investigations have been aided by amnesty deals struck in recent years with Middlebury (Conn.)-based Crompton (CK). While the company pleaded guilty in May to antitrust violations in rubber chemicals, it has struck amnesty deals with U.S. and international authorities concerning other businesses.
-- AT&T (T) will exit the home phone market in seven states.
-- The FTC approved R.J. Reynolds' (RJR)bid to acquire the U.S. assets of British American Tobacco (BTI).
-- eBay (EBAY) has acquired India's largest online auction site, Baazee.com.
For a day, at least, Salesforce.com (CRM)didn't have to do much selling. After its IPO was priced at $11, shares opened at $15 on June 23 and closed at $17.20 -- a gain of 56%. Investors are upbeat about Salesforce's Web-hosted customer-relations software.