1. Google's Party Favors
The party's over at
The Mountain View, Calif., search giant tried to drop in this week on
sixth annual user get-together in Boston. eBay bills "eBay Live" as "the premier event for eBay users to come together, share their stories, learn new ways to buy and sell on the world's largest online marketplace, and most importantly, have fun!"
Google wasn't invited, but who doesn't like to have fun? So Google
scheduled some festivities of its own -- to promote its Google Checkout payment system, a
lagging rival to eBay's fast-growing PayPal.
"Join us for a celebration of user choice at the Google Checkout Freedom Party on Thursday night," Google urged Monday on its
checkout blog. "We'll use the same spot where revolutionaries launched the Boston Tea Party to celebrate freedom with free food, free drinks, free live music -- even free massages."
Freedom cuts both ways, though. On Monday night, eBay execs got wind of this "celebration of user choice" and made a choice of their own. They canceled all their advertising on Google.
Abashed, Google called off its "freedom" party to talk with eBay about getting the ads back. The sides were still talking Thursday, as Google tried to explain away its about-face.
"eBay Live attendees have plenty of activities to keep them busy this week in Boston," an updated post on the Google Checkout blog read Wednesday, "and we did not want to detract from that activity."
Sounds like Google's got a serious hangover.
Dumb-o-Meter score: 95. Way to toe the party line, guys.
2. Gross and Grosser
Bond guru Bill Gross has put his stamp on the market's June swoon.
Gross, the investment chief at giant bond-fund manager Pimco, grabbed headlines this past week by
belatedly predicting higher long-term interest rates.
After 25 years as a bond bull, Gross said he has "all of a sudden become a bear market manager." The shift came after investors suddenly started selling their long-term bonds, sending 10-year Treasury yields to multiyear highs.
skeptics were quick to note Gross' poor recent track record, which features numerous botched calls on
But perhaps Gross' biggest misstep came back in September 2002, when he predicted the
Dow Jones Industrial Average
would hit 5000. It didn't. Instead, the Dow bottomed a month later at 7181, on its way to a recent 13,500.
To be sure, Gross has done better in other venues. He raised $9 million for charity this past weekend by selling some of his rare-stamp collection at auction. Gross and his wife, Sue, donated proceeds to Doctors Without Borders, a group that aids disaster victims. Gross had bought the stamps for just $2.5 million.
The big gains prompted
to note that Gross' stamp portfolio has recently outperformed his $103 billion Pimco Total Return fund. This observation brought to mind a question Gross posed a few years back.
"OK, so what's a bond guy doing talking about the stock market again?" Gross asked in opening the
Dow 5000 piece. "Shouldn't he stick to his 'knitting?'"
No, he should stick to his "stamp collecting."
Dumb-o-Meter score: 90. "It's beyond my expectations," Gross said of the stamp auction. "It's four times profit. It's better than the stock market."
3. New Century Firing on All Cylinders
A new era has dawned at
The Irvine, Calif., mortgage lender said Tuesday that it fired CEO Brad Morrice. Holly Etlin, the AlixPartners exec who has been acting as New Century's restructuring chief, will take over.
Morrice's departure is just the latest twist in the New Century story. As recently as this spring, New Century was calling itself "a new shade of blue chip," boasting of its status as a top lender to homebuyers with poor credit histories.
But New Century stock plunged after defaults and delinquencies spiked among these subprime borrowers. The company forecast a big loss and admitted its accounting was wrong. New Century's lenders responded by cutting off funding, forcing the firm into Chapter 11 bankruptcy. New Century has since eliminated some 5,000 jobs, slashing its workforce by some 90%.
While New Century was collapsing under a mountain of bad loans and bad accounting, Morrice and other top execs were still raking in big bucks. Not only did Morrice manage to sell stock ahead of a rash of bad news in January and February: Filings show the company paid Morrice $295,724 just weeks before New Century's April 2 bankruptcy. A spokesman told
that the timing was just a coincidence.
Despite New Century's failure, the company makes a striking claim about Morrice. It says in a
Securities and Exchange Commission
filing that he was fired "without cause."
Just as he had been employed without cause.
Dumb-o-Meter score: 85. Morrice will get to collect some $11,000 in vacation pay, the Associated Press reports.
4. Sanofi Gets Slugged
is looking at lean times.
Shares of the French drugmaker
sank 4% Thursday after a Food and Drug Administration advisory panel weighed in against approval of its obesity drug.
The company pledged to "work closely with the FDA to address the committee's recommendations," but investors sold the stock as Wall Street predicted a long delay before U.S. sales eventually roll in.
Sanofi's weight-loss treatment is sold in 18 countries overseas as Acomplia. Sanofi has said it believes the drug, known in the U.S. as Zimulti, could pull in $3 billion in global peak-year annual sales. Given the growing heft of the U.S. population, it's easy to see the market opportunity.
But the drug has been stuck in the FDA approval process for more than two years, and Wall Street is beginning to wonder if it will ever get U.S. clearance. First-quarter worldwide sales were just 15 million euros ($20 million). Some doctors worry that Acomplia could
trigger suicidal thinking.
Negative thoughts don't seem to have penetrated Sanofi's executive suite, though. As recently as last month's annual meeting, execs were still calling U.S. approval of Zimulti a key event for 2007.
What's the lesson? Even for obesity drugs, approval is no
Dumb-o-Meter score: 80. Talk about a French twist.
5. Gimme Tax Shelter
is resorting to now.
The Bethesda, Md., lodging giant announced a plan to build 100 boutique hotels with hipster developer Ian Schrager. The company says the venture will open high-end hotels in places like New York, London, Paris, Beijing and Tokyo.
Conscious of its utilitarian image, Marriott said the agreement joins "players at opposite ends of
the hospitality industry." But in some regards it and Schrager aren't so different.
Schrager was a founder of New York's Studio 54 in the 1970s. He spent more than a year in jail back in the early 1980s after he and his business partner were convicted of evading income taxes.
Marriott is no stranger to tax troubles, either. Just last week, the company agreed to pay $220 million in a settlement with the Internal Revenue Service and the Labor Department over deductions it took on its employee stock ownership plan.
Marriott stressed that it paid no penalties in the case, which also "fully resolved all IRS issues pertaining to the audits of the company's 2000, 2001 and 2002 federal tax returns."
Now that that's all taken care of, the partners can get down to the business at hand.
The new brand, Marriott insists, "responds to new cultural and social imperatives that Mr. Schrager says have emerged."
Like keeping the tax man at bay.
Dumb-o-Meter score: 78. "Together Marriott and I have a new vision," Schrager said in the press release, "and plan to radically rethink and catapult the lifestyle boutique hotel into the present by capturing the spirit of the times."
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