"It's my whole personal life. I had no idea somebody was looking over my shoulder."—Thelma Arnold of Liliburn, Ga., aka AOL user No. 4417749, quoted in The New York Times, after AOL, to its regret, released search-query data on the Internet
Five years after the September 11 attacks, the U.S. intelligence community has so many outside contractors working for it that the government doesn't know the exact number. Nor does the top brass know exactly what all these companies are doing. (Such work can include everything from threat analysis to translation services.) This summer, staffers at the Office of the Director of National Intelligence, which briefs the President daily, began taking an inventory. "We're trying to identify those contractors who are doing core intelligence work," says a senior intelligence official. Up to now, he says, there wasn't "a good way of counting them or identifying what kind of work they're doing."
Officials say the results of the survey, to be collected from the various intelligence agencies by Labor Day, will help determine if these private contractors are wasting taxpayer dollars -- through duplication, improprieties, or by using high salaries to recruit top talent away from government, in effect forcing Washington to pay more for expertise. The headcount is long overdue, says Keith Ashdown, vice-president of Taxpayers for Common Sense. "It's just ridiculous," he says. "We should have known this years ago."
The trail mix set has been crunching numbers to prove it's big enough to take on Big Oil. In a study to be released on Aug. 11, the Outdoor Industry Assn. says outfitters and related companies generated $289 billion in retail sales last year, supporting more jobs than Wal-Mart Stores (WMT) does and contributing $730 billion to the economy.
The organization, whose members include apparel giant Columbia Sportswear (COLM), adventure gear retailer REI, and thousands of small outfitters, wants to leverage its economic clout with federal policymakers, who are increasingly requiring campers, hunters, and climbers to share wilderness areas with oil and gas drillers. The idea is to put an economic spin on the urgency of preserving these areas. "We hope to provide tangible evidence of how important these assets are to the business economy," says Sally Jewell, CEO of REI, based in Kent, Wash. It won't be a walk in the park. The trade group, based in Boulder, Colo., spent less than $300,000 lobbying last year, a far cry from the $28 million spent by oil and gas interests.
Fed up with the high prices urban kids pay for sneakers marketed by their basketball heroes, New York Knicks point guard Stephon Marbury is launching the Starbury One, a $14.98 sneaker he'll wear on the court. Discount retailer Steve & Barry's will make and sell the shoe, which is 1/12 the price of Nike's $180 Air Jordan XX1. "Two hundred to buy a pair of sneakers," Marbury says, "that's groceries for the week." He wants Starbury One's low price to show kids how little it costs to make a high-quality sneaker. "History is going to say Stephon Marbury changed the game," he says.
Mike McCue, co-founder of Tellme Networks, has been waiting a long time to help the masses navigate the Web via spoken words rather than with a PC and a browser. When he started Tellme in 1999, he called this idea DialTone 2.0. Then came the dot-com bust, and Tellme switched its focus to businesses. Today, when you call American Airlines (AMR) or Verizon (VZ), you hear Tellme's voice-automation system.
Now, thanks to mobile-phone technology, McCue's longheld idea may soon be a reality. Tellme is now working with Microsoft (MSFT) and Cingular Wireless, among others, to create mobile search services -- a way for folks in motion to find information on people, businesses, or other subjects.
A hungry traveler, for instance, might simply say "restaurants," "sushi," and "downtown" into his cell phone and quickly get a readout of listings, reviews, and maps. "We have a vast array of content. Tellme has great expertise in voice applications," says John DeVitis, product unit manager for Windows Live Mobile Search.
Industry analysts believe voice technology is ripe for these uses. Says Seamus McAteer of research firm M:Metrics: "Your voice can be the mouse of the mobile phone."
Corporate chiefs and economists don't toss around the word "recession" lightly -- bad for morale. But New York hot dog chain Gray's Papaya, the 24-hour eatery frequented by bag ladies and bankers alike, isn't bashful. Word is that the highly visible outpost on New York's Upper West Side is about to plaster a sign for its "recession special" in its huge front windows. The last time it did that was March, 2001, just as the economy was dipping into recession. The National Bureau of Economic Research, which officially calls business cycle turns, reported that March onset eight months later.
Already, perhaps seeing economic clouds (and an interior "recession special" sign left over from past downturns), more Gray's customers are asking for the dog deal ($2.75 for two franks and a drink, including tax). "People are getting more realistic and adjusting their expectations and budgets," says Jackie Schwimmer, a senior vice-president at one of the city's largest real estate brokers, in between chomps. She doesn't see an imminent full-blown recession but concedes a pinch in the housing market. Then there's the Wall Street guy who'd ventured uptown for his frank fix. Times are good in his neck of the woods, he admits, but he's feeling less inclined to drop $11 on a Financial District designer salad more than twice a week. And he'd gladly trade the savory bliss of Gray's recession special for added job security. "I love the dogs, and I love the deal," he says, "but I hope they're wrong."
WHY READ IT
Diego Rodriguez' design blog, Metacool, has everything most business blogs lack: wit, fresh insights, and, with a few well-disclosed exceptions, posts that promote his ideas instead of the company he works for (in this case, design firm IDEO).
Rodriguez, who also teaches at Stanford University's design school (and who has written for BusinessWeek.com), has been blogging of late on the meaning of authenticity in branding, on brainstorming, and on "unabashed gearhead gnarlyness," his design-geek ode to cool engines and cooler cars.
Tired of your little white or blue pills? The FDA recently ruled that drugmakers can start coating pills and tablets with pearlescent pigments similar to those used in cosmetics -- sparkly, metallic, or satiny finishes. Called Candurin Pearl Effect Colors, the pigments are made by EMD Chemicals, a unit of Germany's Merck KGaA (no relation to Merck & Co. (MRK)). EMD hopes pharma companies will use the pigments to distinguish their pills from generics.
The FDA approval has its critics. Those shiny colors are made by coating mica with titanium oxide or iron oxide. The concern is that the iron in the pigment could be toxic, especially for people who must limit their iron intake. But the agency concluded that the pigments, which cannot make up more than 3% of the weight of a drug, would have "no toxic potential" when ingested at that level. Similar pigments have long been used in contact lenses and titanium oxide is already allowed in drugs.
EMD will begin marketing the pigments shortly, raising the possibility that some drugs will look psychedelic, even when they're not.
It took considerable prodding to get DaimlerChrysler (DCX) CEO Dieter Zetsche to agree to the company's "Ask Dr. Z" ad campaign, which kicked off on July 1 to coincide with Chrysler's summer employee-pricing sale. He relented, Zetsche says, only because appearing in the TV, radio, print, and Internet ads seemed slightly more dignified than the alternative offered by Chrysler CEO Tom LaSorda and marketing chief Joe Eberhardt: representing him with just a disembodied graphic of his cookie-duster mustache. "I told them that I wasn't going to be reduced to a bit of hair," he recalls.
It's too soon to gauge the impact of the $100 million campaign, created by ad shop BBDO, which aims to show the benefits of a merger that made siblings of Mercedes-Benz and Chrysler. The askdrz.com Web site has had millions of hits, and visits to Chrysler, Jeep, and Dodge Web sites are up 10%, Chrysler says, with requests for information or a test drive up 30%. Overall July sales, including to rental fleets, are down 37% from last summer's levels (admittedly so high they make comparisons tough) and down 21% from this past June. But July retail sales were up 9% over June.
As a spokesman, Zetsche says he finds former Chrysler chairman Lee Iacocca a hard act to follow. But soon after arriving at Chrysler in 2001, he began to lose his Teutonic reserve, starring in the company's theatrical auto-show skits. (Last January he arrived onstage in a giant FedEx (FDX) package.)
The Dr. Z ads try to convey a lot of information, some of which can get lost in Zetsche's accent. In front of the camera, though, Zetsche is a natural. When the script for one of the TV spots called for him to "head" a soccer ball, the director glumly settled in for a day of do-overs. Zetsche, a longtime soccer fan, did it in one take. Maybe that graceful header has made him less believable as a CEO. According to CNW Marketing Research, which follows the auto industry, 80% of new car buyers think Dr. Z is a fictional character.
File this one under unintended consequences. Retailers, giddy at the prospect of lower labor costs, are adding self-checkout lanes at a rapid clip. Last year the number of these lanes, which let shoppers scan their own merchandise, grew by more than 35%. But there's a downside: Self-checkout counters are killing impulse buys.
In a survey by IHL Consulting Group, which specializes in retail technologies, respondents report what amounts to a 45% drop in impulse purchases at the do-it-yourself counters. It seems customers are so focused on the scanning process at the occasionally glitchy kiosks that they're immune to the lure of Slim Jims and the US Weekly with the latest Brangelina cover.
Sales of salty snacks and sodas fell most, each dropping 50% in the self-scan lines. The category that fared best, non-chocolate candies, still dropped 38.5%. And a note to publishers of diet magazines and baby-naming booklets: Women's purchases sank 50% in these lanes, compared with about 28% for men.