|Google and the Sun Don't Shine |
You can Google this software
1. SunburnSun Microsystems ( SUNW) was red-hot this week over its date with Google ( GOOG).
The struggling software outfit teased investors Monday morning by hinting at a
The breathing only got heavier Tuesday morning, as Sun stormed out of the gate to a morning intraday high of $4.56 -- a level it hadn't seen since Jan. 13 -- and volume tripled its daily average by noon. The plainspoken buy-and-hold investors who frequent the message boards
2. Case Closed
Apparently one revolution wasn't enough for Steve Case.
|In Good Company |
With friends like these
The former America Online chief this week announced that his new health care company, Revolution Health, had completed a series of acquisitions that would put it on track to roll out consumer services next year.
"With these initial investments, we are on our way to building a company that puts patients back in control of their health care decisions," Case said in a midweek press release. "The work has just begun on what is a long-term project that will take years to reach its full potential."
Case knows a thing or two about potential. He built AOL into a power that made millionaires of early shareholders. The Dulles, Va., company rode the so-called Internet revolution to such fame that it even managed to acquire a much bigger old media rival, Time Warner ( TWX). That's when Case's luck turned, of course. The 2001 AOL-Time Warner deal is now viewed as a monument to Internet bubble-era folly, memorialized in Time Warner's plunging stock price and its pricey legal settlements over AOL's shoddy bookkeeping. Since then, AOL has lost subscribers by the millions to nimbler rivals like Yahoo! ( YHOO) and Google. Case was pushed out of Time Warner in 2003, though he remains on the board. Apparently he remains unscarred by AOL's decline. Revolution Health counts a number of AOL alums, including Netscape co-founder Jim Barksdale and venture capitalist Miles Gilburne, as directors. Inexplicably, Case also named former Fannie Mae chief Frank Raines, former Hewlett-Packard CEO Carly Fiorina and ex-Oxford Health chairman Steve Wiggins to the board. Of course, Raines was forced out at Fannie after regulators took issue with the mortgage giant's accounting. Fiorina was ousted after Hewlett failed to show signs of life under her big-talking regime. Wiggins left Oxford after regulators forced it to bolster its medical claims reserves, sending the stock plunging. "It reminds me of 20 years ago when we were starting AOL," Case told USA Today in July about Revolution Health's startup plans. "Half the people told me, 'You're crazy.' But we believed that someday, people would embrace interactive services. I look at the health care situation, and it feels like deja vu all over again." Considering the all-star lineup on Revolution's board, let's hope not. Dumb-o-Meter score: 88. Fortunately there's no sign that Case's partner in that sorry merger, ex-Time Warner chief Gerald Levin, is running a big health care company right now.
|Gaseous Matter |
Good one, Goodyear
3. Taking FlightGoodyear ( GT) was huffing and puffing a bit this week.
The Akron, Ohio, tire company said it would launch a new blimp next year to replace one that's being taken out of service. Goodyear, which has been flying blimps since 1925, says it has stepped up airship marketing activities in the past two years in a bid to gain exposure for the company and its products.
That may not sound like news to you, but Goodyear says the move underscores its commitment to shareholder value. "Goodyear's two other U.S.-based airships, the Spirit of Goodyear, located near Akron, and the Carson, California-based Spirit of America, recently were in New York City to support the company's meeting with financial analysts and investors," the company said Wednesday afternoon. "As part of that meeting, with the airships hovering over the Manhattan skyline carrying hurricane relief support messages, Goodyear Chairman and CEO Robert J. Keegan opened the meeting referring to the airships overhead as highly visible evidence of the company's stepped up efforts to become a more market-driven company." We can only imagine what a powerful image that was. But just to make sure you get the picture, Goodyear also quotes Jon Rich, president of its North American Tire unit, to the same effect. "The Goodyear blimps are celebrating their 80th anniversary as a company and American icon, and are a key part of our marketing strategy," said Rich. "Our customers love the blimps. When you think of Goodyear, you think of tires, blimps and racing." Speak for yourself. When we think of Goodyear, we think of hot air. To view Colin Barr's humorous video take on Goodyear's latest hot air project,
4. PunchbowlDelta ( DAL) really knows how to throw a party. On Thursday, the air carrier launched nonstop service to Israel with an event at the Carter Center arena in its hometown of Atlanta. "Delta customers will be part of history when the airline starts the only nonstop service between the U.S. Southeast and Israel," the company said in an accompanying press release. But hold the streamers. After raising the roof with his big Tel Aviv service plans, CEO Gerald Grinstein turned once more to his favorite subject: cost-cutting. He said Delta is prepared to use bankruptcy court to get $325 million worth of givebacks from its pilots, the AP reported. Of course, this isn't the first talk of pay cuts from Grinstein. Delta's pilots have already taken a 32% hack, in a deal arranged last fall as Delta was struggling to stay afloat. That agreement saved the airline $1 billion in annual costs but couldn't keep Delta out of bankruptcy. Delta filed for Chapter 11 protection on Sept. 15, pledging to sharply cut back its operations and emerge as a sleeker player in just two years. Even before Grinstein's latest threat, the pilots were feeling the pain. "The bottom line is that our original contract has already been cut by half, from $2 billion annual value to $1 billion," one Delta pilot wrote last month in response to this column's kudos to Grinstein for cutting his own pay. "Who should really be given the credit for having given?" That said, even after last year's cutbacks, the pilots' numbers may just be too big for an ax-swinger like Grinstein to overlook. "Just three months before the Sept. 11, 2001, terrorist attacks, Delta signed a five-year labor contract with its pilots -- boosting them to the top of the industry," the Atlanta Journal-Constitution reported in June 2004. "The pilot pay gap widened further after American, United and US Airways, which also filed Chapter 11, won deep cuts from most of their workers." Sounds like festive times ahead for everyone. Dumb-o-Meter score: 75. Even if Delta's turnaround doesn't work, we see a promising career for Grinstein in party planning.