Down on Pop-Ups
Moving to rekindle the loyalty of subscribers and fend off competition, America Online agreed to stop taking those unpopular ad displays that pop up on computer screens unannounced and uninvited. The move will cost AOL about $30 million a year and is the latest evidence that the Internet is moving to a business model in which companies collect money for the services that users value rather than relying on advertising and other indirect sources of revenue. For the moment, Microsoft MSN, AOL's closest rival, is sticking with pop-ups, although it is seeking to limit their frequency.
With its economy faltering and its central bank determined to do nothing about it, Europe is reverting to old ways and looking to prop up some of its ailing corporate giants. France is contemplating pouring money into recently privatized France Telecom in exchange for a larger stake, while Germany has already lent $50 million to its own financially strapped telecom company, MobilCom. Meanwhile, a million workers went on strike in Italy on Friday in an effort to force the government to buy into Fiat, the money-losing automaker, to forestall layoffs of 8,000 workers.
A Family Affair
ImClone Systems founder Samuel Waksal pleaded guilty to federal charges connected with insider trading. The plea was meant to avert prosecution of his daughter and father, who both sold shares in the biotech company just before it announced the government's rejection of a clinical trial of its new cancer drug. Waksal told the court he advised his daughter to sell her shares but never told her the reason -- then lied about it all to investigators. Prosecutors are still investigating ImClone stock sales by a "close friend" of Waksal, thought to be lifestyle maven Martha Stewart.
As Congress left town last week, the list of high-profile economic business left undone after nine months of grueling deliberation is truly impressive. It includes all but two of the 13 appropriations bills for the federal budget year that began Oct. 1, an energy bill, legislation closing down offshore tax havens, a terrorism insurance bill, elimination of illegal export subsidies, a post-Enron pension protection bill, bankruptcy reform and an extension of unemployment insurance. The lame-duck session begins in mid-November.
Former Global Crossing chief executive Leo Hindery took his place last week in the CEO Chutzpah Hall of Fame, alongside newly inducted members Linda Wachner of Warnaco and Tyco International's L. Dennis Kozlowski. Hindery demanded that the bankruptcy court award him $708,000 in consulting fees he claims he's owed under a contract signed before the company's Chapter 11 filing, plus $100,000 to cover the rent on his apartment at the Waldorf-Astoria. Global Crossing creditors oppose the payments.