Is This the Way?
Leave those kids alone

1. Nortel It on the Mountain

We understand the need for shameless self-promotion. But

Nortel's

(NT)

latest advertising may be too much, even for us.

The Canadian telecom gearmaker Monday launched what it calls a "global branding initiative," one with "sweeping changes to the company's look, feel and voice."

Granted, Nortel could use some of these sweeping changes. Certainly, over the last few months, not that many people have been impressed by the look and feel of the voices coming out of Nortel.

The problem, as you may recall, is the accounting scandal that evidently inflated Nortel's earnings by $300 million last year -- a surprising "turnaround" that also happened to inflate performance-based executive bonuses.

Late last month, the company once again delayed its release of restated results for 2003, saying it still hadn't gotten to the bottom of exactly How Things Went Wrong.

So in this context, we were much irritated to watch Monday's debut of Nortel's new ad campaign -- one that features a chorus of irritatingly British-accented kids singing the irritating children's song, "This Is the Way We Go to School."

"This is the way we sweep the floor," sing the kids, amid shots of people making money. "This is the way we butter our bread." Eventually, an authoritative-sounding voice comes on to say, "This is the way. This is Nortel."

Wow. At a company where executives are suspected of inflating results to get a pay raise, it takes an awful lot of guts to hold oneself up as a model of bread-buttering. At a place where the company still hasn't figured out what its financials look like for the past year and three quarters, it takes even more guts to hold yourself up as the place to go for "helping people solve the world's greatest challenges," as the company puts it.

Yes, if Nortel is the Way, you better show us the Way Out.

2. Bextra! Bextra! Read All About It!

The pharmaceutical industry is going through a painful learning process.

On second thought, though the process is painful, we're not sure what people are learning.

It all started Tuesday when a doctor at the American Heart Association meeting presented a study that linked

Pfizer's

(PFE) - Get Report

drug Bextra to increased risk of strokes and heart attacks.

Bextra, in case you don't know, is a type of painkiller called a COX-2 inhibitor. That makes it awfully similar to

Merck's

(MRK) - Get Report

Vioxx -- a COX-2 inhibitor painkiller that got pulled from the market in September after being linked to increased risk of heart attacks.

In the years, months and weeks leading up to the withdrawal, you may remember, Merck played hardball with Vioxx's critics. So just a month before Merck withdrew Vioxx -- and saw its stock drop 27% in a single day -- the pharmaceutical company was questioning the validity of an FDA-funded study that reflected badly on the drug.

"This retrospective analysis is based only on a database review. Observational analyses do not have the rigor of randomized, controlled clinical trials," a Merck researcher complained.

So what did Pfizer do after a

New York Times

reporter wrote up the new study reflecting badly on Bextra?

Why, Pfizer made similar accusations of bad science. The article, said Pfizer, "draws unsubstantiated conclusions about the cardiovascular safety of its COX-2 medicine Bextra and is based on information that has not been published in a medical journal or subject to independent scientific review."

Yes, hardball tactics will be a winning strategy, for sure. Just ask Merck.

3. But PeopleSoft, What Light Through Yonder Window Breaks?

Here's a question for

Oracle

(ORCL) - Get Report

and

PeopleSoft

(PSFT)

:

When will it end? When will it ever end?

Our patience is wearing thin here. For 17 months now, the companies have been locked in a battle: Will Larry Ellison's Oracle be able to take over the rival software firm, or won't it? The inconclusion is getting to be a bad running joke, along the lines of the old

Saturday Night Live

routine about Generalissimo Francisco Franco still struggling to remain dead.

Evidently, Ellison himself is getting sick of the whole deal. As

TheStreet.com's

ace software reporter Bill Snyder

wrote this week, Ellison says he'll walk away from the deal Nov. 19 if a majority of PeopleSoft shareholders don't accept his current tender offer.

So will that be the end of the ordeal? Of course not! If indeed Ellison gets a majority, PeopleSoft's co-president -- speaking for a board that has rejected Ellison's current $24-a-share offer -- says he'll fight the takeover through the company's shareholder meeting next spring.

Us? We think that's an optimistic schedule. By the time this matter is settled, we reckon, Bill Clinton will be in his second term as First Husband.

4. It's a Travelzoo Out There

Shares of online publisher

Travelzoo

(TZOO) - Get Report

closed above $100 for the first time Tuesday, and they traded even higher on Wednesday.

Yes, it's just another illustration of the responsibility that each and every American will demonstrate when put in charge of investing his Social Security money.

The Price Is Wild
Google this valuation

Thus, Travelzoo -- a company that had net income of $4.4 million on $23.2 million in sales in the first nine months of the year -- is trading at about 250 times estimated 2004 earnings. It enjoys a market capitalization of $1.7 billion.

How crazy is that? Well, for the $1.7 billion it would take to buy the Web site -- which lists cheap airfares and other travel bargains -- you could buy three actual airlines themselves.

Yes, you'd have enough money to buy

Continental

(CAL) - Get Report

,

Delta

(DAL) - Get Report

and

Independence

(FLYI)

. Not only that, you'd have enough money left over -- at least $100 million -- to pay Bill Gates an hourly wage to make your own travel-bargain Web site from scratch.

Frankly, doing that makes about as much sense as paying 250 times earnings for anything.

5. This is the Way We Wash Our Hands of Nortel

But back to Nortel, a company that just keeps on giving, as far as Dumb Things are concerned.

Still Showing Us How
There's no Nortelling when

On Thursday -- that's four days after the global branding initiative made sweeping changes to Nortel's look, feel and voice -- the company announced further delays in the previously delayed release of revised financial statements.

The company, which last said it would file its fixed-up financials by mid-November, says it now hopes to finish the job in 30 to 60 days.

You know how Nortel sweeps the floor, butters the bread and mends the fence? Very slowly.