Former Motorola (MOT) Chief Operating Officer Mike Zafirovski has long wanted to run his own company -- and now his wish has come true. On Oct. 17, Zafirovski, 51, was named CEO of beleaguered telecom equipment maker Nortel Networks (NT).
Zafirovski aims to return Nortel to its dot-com-era glory. That's a tall order. He takes over on Nov. 15 from William Owens, who struggled to steady Nortel as it reeled from an accounting scandal that led to years of financial restatements and the 2004 ouster of 10 executives, including then-CEO Frank Dunn. The crisis diverted resources and spooked some customers. Now Zafirovski is out to regain confidence and boost profits. He plans to cut procurement and other costs but may have to ax jobs and lagging businesses, such as the optical unit. And he has the tough task of finding new markets like next-generation wireless networks. Welcome to the CEO's seat, Mike.
Google's (GOOG) efforts to extend its tentacles into offline content are coming under increasing fire. Five major publishers -- BusinessWeek owner The McGraw-Hill Companies (MHP), John Wiley & Sons (JWA), Pearson Education (PSO), Penguin Group (USA), and Simon & Schuster (VIA) -- sued Google on Oct. 19 seeking to block the Internet titan's efforts to scan copyrighted works without their consent. The Authors Guild filed a similar suit in September. The Google Print initiative aims to scan and digitize millions of books to make them searchable on the Net. Google insists it isn't violating copyright law because it shows only snippets of works. And it argues that helping more people find texts will boost sales for copyright holders. Publishers, however, argue Google is trying to make millions by misusing copyrighted materials without their permission.
Harvard University tapped Pacific Investment Management managing director Mohamed El-Erian, 47, to replace its high-profile and highly paid money manager, Jack Meyer. El-Erian, who oversees more than $28 billion in emerging-markets debt, will begin managing Harvard's $25.9 billion endowment early next year. Meyer led Harvard Management to chart-topping returns, but critics blasted his salary, more than $7 million in 2004. Harvard wouldn't say what it's paying El-Erian, a close colleague of PIMCO bond chief William Gross. Meyer plans to open a hedge fund -- and already has lined up Harvard as an investor.
Biotech is giving Wall Street a shot in the arm. On Oct. 19, Amgen (AMGN) said its third-quarter profits quadrupled, to $967 million, from a year earlier, when the Thousand Oaks (Calif.) company was bogged down with acquisition costs. A 38% surge in sales of its anemia drug helped push up overall sales 19%, to $3 billion. And Genzyme (GENZ) of Cambridge, Mass., said on Oct. 18 that third-quarter profits rose 38%, to $160.5 million, before amortization and one-time charges. Sales rose 24%, to $708.1 million, because of high demand for its drugs to treat kidney disease, knee pain, and Fabry disease, a genetic disorder.
The Federal Reserve's march to raise interest rates was supposed to hammer profits for banks by squeezing their margins -- the gap between borrowing costs and the rate at which banks could invest or lend funds. Apparently, the banks never got that memo: On Oct. 19, JPMorgan Chase (JPM) said third-quarter profits rose 78%, due largely to a surge in trading and investment banking fees. And Merrill Lynch (MER) said profits for the same quarter rose 49%, to $1.4 billion, as underwriting and trading revenues soared. Among commercial banks without large trading or M&A desks, Bank of America (BAC) reported a 10% rise in third-quarter earnings on higher service fees and a rebound in mortgage banking income.
-- The Chicago Board of Trade raised $172 million in an Oct. 18 initial public offering.
-- Cisco Systems (CSCO) said it will invest $1 billion in India over the next three years.
-- JPMorgan President James Dimon will become CEO at yearend, earlier than expected.
Guidant (GDT) shares sank 11%, to $64.10, on Oct. 18 after Johnson & Johnson (JNJ) warned it may lower its $76-a-share bid in light of product recalls by the maker of implantable defibrillators and other devices. J&J agreed in late 2004 to buy Guidant for $25.4 billion in cash.