"Most CEOs I talk to have put a little bit of caution on their optimism and termed it 'moderate growth."' -- John Chambers, CEO of Cisco Systems
Yahoo! (YHOO) is quick to paint itself as one of the Web's good guys. So on Aug. 4 it unveiled Anti-Spy, a free program that automatically hunts down nefarious software, including so-called adware -- eavesdropping programs that slip onto PCs and serve up a flurry of oft-annoying pop-up ads. But what CEO Terry Semel doesn't brag about: Yahoo also happens to be one of the adware industry's biggest financial backers.
Yahoo's partner is adware kingpin Claria, formerly known as Gator. Claria's pop-up ads pelt the computer screens of 43 million people worldwide, and they often contain links to Yahoo's search advertisers. Yahoo, which divvies up the advertising fees with Claria, is the only major search engine that has teamed up with an adware outfit. Last year, the deal generated $28 million, nearly one-third of Claria's sales, according to filings for its postponed initial public offering.
Yahoo says it has no intention of changing its dual approach and insists it's trying to improve customer choice. Deluged Web surfers may want to hold their applause.
Regulators are turning their eyes to the nonprofit world. On Aug. 10, the Internal Revenue Service announced a sweeping probe of 2,000 tax-exempt groups, looking into pay and insider deals. The IRS won't say who's on the list, but those with execs drawing more than $1 million could be audited.
Such sums are usually paid to the top execs at universities and hospitals, but a BusinessWeek analysis finds many other charities and nonprofits cross that threshold, too. For instance, according to tax filings, the CEO of Normative Services, a Sheridan (Wyo.) home for troubled youth, received $1.2 million in 2002. And in 2001, the vice-president of Good Companion Broadcasting, a Hagerstown (Md.) religious media outfit, took home $2.4 million. Neither group returned calls for comment.
Meanwhile, the Senate Finance Committee is probing the Statue of Liberty-Ellis Island Foundation for alleged abuses. Among them: consulting contracts received by its CEO and its fund-raising tactics. A spokesperson says policies are being "refined." IRS advisory board director Victoria Bjorklund says: "The public needs confidence in charities." It helps that the IRS has threatened stiff penalties, and, in extreme cases, removal of organizations' tax-exempt status.
Although Howard Dean won only one primary -- in Vermont, his home state -- he raised $21 million online, and used e-mail, Web logs, and Web-organized meetings to build grassroots support. Now, Washington upstarts EchoDitto and Blue State Digital -- founded by ex-Deaniacs -- aim to do the same for other Democratic candidates and causes.
EchoDitto's founder, former Webmaster Nicco Mele, 26, is using the Web to raise funds and create a blog for Barack Obama, the Senate hopeful from Illinois. And the Service Employees International Union tapped it to design a recruitment site.
Blue State Digital, started by four other Dean campaign tech staffers, did the redesign for Dean's Democracy for America site and an online organizing tool for the liberal 527 group America Coming Together.
Lessons from Dean's flameout aren't lost on the consultants. "The Internet by itself isn't going to win you an election," says Blue State co-founder Joe Rospars, 23. But come this November, Dean's campaign could have quite an impact after all.
It's not the stuff that lines your kitchen. A new wallpaper, made by British defense contractor BAE Systems, purports to keep companies' wireless networks secure. The "paper" -- made of thin sheets of copper and plastic -- blocks Wi-Fi signals from leaving buildings but lets cell-phone calls through. Previous measures -- aluminum-lined walls and signal-canceling glass in windows -- blocked cell phones. Thus, they held back the spread of Wi-Fi networks in large corporations. BAE hasn't started selling the wallpaper but says it will cost as little as $300 to screen one floor of an office building. A small price to keep out prying eyes.
The Iraq War drove Wall Street to drink, says Dr. Alden Cass. In a July 28 study, the president of consultancy Catalyst Strategies Group says that during and just after the war, 32% of his 151 respondents -- mostly brokers and analysts -- had six or more drinks on at least one occasion a week.
While traumatic events often lead to drinking problems, Cass says that bankers took to the bottle earlier than usual because of "open wounds" from September 11. It may be time to consider more healthful coping skills.
To Red Hat (RHAT) CEO Matthew Szulik, software is a lot like fly fishing. Years ago, says Szulik, who grew up in the fishing port of New Bedford, Mass., fly lures were made by hand and then strung with expensive bait. While some of those craftsmen still exist, they've been overrun by big companies that can produce more lures at far lower prices.
Szulik, 47, thinks Red Hat is a company that can drive similar commoditization in software. Red Hat is already the biggest distributor of Linux, the low-cost operating system that competes with Microsoft's Windows and Unix' software.
On Aug. 3, Szulik announced plans to try to commoditize a new market: so-called application servers, which enable big companies to run software programs through-out their computer networks. Red Hat says the application server will be as affordable as its Linux operating system. "The nature of this industry is changing," he says. He'll have time to ponder those changes when he takes his two sons fly fishing.
Crash! Bang! Pow! Look out, Asia. Here come the Powerpuff Girls, Astro Boy, and SpongeBob SquarePants. This year, four children's channels have appeared in the Asia-Pacific region -- Sony's (SNE) Animax and Playhouse Disney (DIS) across Asia, Viacom's Nick Jr. in Australia, and a new Time Warner (TWX) offering in India called Pogo. A fifth, Hungama, begins in India this month. Those join four kids' channels already broadcasting in six languages in the region.
Behind the explosion: Cable and satellite operators from Seoul to Surabaya are facing new competition. Five years ago, few of developing Asia's 190 million pay-TV subscribers had a choice of operator. Now most countries boast two or more providers, which has led operators to add niche programming. New digital networks -- which can handle three to four times as many channels as older analog systems -- are also driving the trend.
The next step is beefing up local offerings. This year, roughly 20% of kids' programs in Asia will be homemade, up from 10% four years ago. That trend should continue, although global giants will still dominate the business, as Nickelodeon, Disney, and others start hiring Asian production houses to create programming. For now, content providers are doing just fine supplying Asia with the likes of SpongeBob and Powerpuff Girls -- and Asian children are happy to watch.
This way to cheaper gas. A new service for cell phones will allow subscribers to zero in quickly on the cheapest gas around. Televigation, a Sunnyvale (Calif.) wireless company, plans to add a "fuel finder" feature to its $9.99 a month direction finder for Nextel (NXTL) phones.
The TeleNav fuel finder, slated to be available by the end of August, will locate the lowest gas prices in a desired radius and supply turn-by-turn directions to the cheapest station. Per-gallon gas prices around the U.S. are fed into the TeleNav GPS tracker each day, based on information supplied by the Oil Price Information Service, an oil pricing index, and Wright Express, a company that processes credit cards for corporate fleets of cars and trucks. Maybe with the money you save, you could start buying premium.