News Briefs
Mar 12 2001
WINTER CHILL
TAKE YOUR MEDICINE: February was the Nasdaq's third-worst month ever as the index hit a two-year low. Investors were dismayed by Fed Chairman Alan Greenspan's assessment that the economy is better than it was late last year, and therefore an interest cut before March 20 isn't likely. But Greenspan buoyed Republican spirits by once again endorsing tax cuts. To add to the general gloom, the Commerce Department revised estimates of GDP growth for the last quarter of 2000 to 1.1 percent, the slowest pace in five and a half years. Also slipping were consumer confidence and housing sales.
OTHER NEWS
ATT WINS, SELLS: As it battled AOL Time Warner on other fronts, AT&T and its rival won a joint legal victory when a U.S. appeals court reversed Federal Communications Commission rules that capped any one cable company's share of the U.S. market at 30 percent and limited the amount of affiliated programming companies can run. Meanwhile, as AT&T prepares to break itself in four pieces and pay down its $46 billion debt, the company agreed to telco and cable deals with Charter Communications and Mediacom Communications to bring in a combined $5.1 billion. ... Forced by regulators to sell its 25 percent stake in AOL's Time Warner Entertainment, AT&T is expected to sell the shares on the open market after refusing AOL's $9 billion buyback offer.
AFTER NAPSTER? Napster promised to start blocking unauthorized music from its service. The move, announced at a court hearing Friday, was an attempt to stave off a potential shutdown at the hands of Judge Marilyn Hall Patel. Her decision is not expected immediately. In preparation for a Napsterless universe, German media giant Bertelsmann admitted it has been secretly testing a file-sharing tool dubbed Snoopstar that could perform functions similar to Napster.
MY YAHOO, NOT YOURS: Yahoo 's board of directors said it has adopted a plan to prevent a hostile takeover as its stock price languishes around 10 percent of its all-time high of $237, which it reached in January 2000. The company emphasized that the plan was not a response to a specific takeover attempt, although merger rumors over the past several months have affected the company's stock price.
THE APPEAL BEGINS: A federal appeals court weighed U.S. District Judge Thomas Penfield Jackson's order to break up Microsoft for antitrust violations. The appellate judges strongly questioned his order and signaled their anger at Jackson for violating ethical rules by granting media interviews during the case. A ruling is expected within a few months.
BABY-SOFT LANDING: Health care products giant Johnson & Johnson agreed to buy BabyCenter from nearly bankrupt eToys for $10 million in cash. The deal gives J&J the family of BabyCenter content sites but not the BabyCenter store. J&J plans to keep BabyCenter employees and expand the unit in its San Francisco location.
BUSH'S BUDGET STUMP: President Bush pitched his $1.96 billion budget for 2002 to Congress and the American public. The administration is touting the plan's $1.6 trillion tax cut as a boost to the sagging economy. Preliminary details show the budget includes an increase in education, health and defense spending. Some high-tech programs and research could be rolled back or cut altogether.
OUT OF THE SKY: Northwest and KLM Royal Dutch airlines stopped paying commissions to Internet travel agents, a direct attack on the popular Travelocity and Expedia . Travelocity responded by adding a $10 service fee to all Northwest and KLM tickets. Meanwhile, Sens. John McCain and Ernest Hollings introduced a bill to grant the Department of Transportation more authority to review airline mergers and competition. The Justice Department is already reviewing the planned mergers of United Airlines with US Airways and American Airlines with TWA.
NOTED: Intel said it will not cut back plans to spend $12 billion on R&D and plant capacity this year, despite Wall Street speculation to the contrary. ... The FTC appointed former Federal Communications Commissioner Dale Hatfield to monitor compliance with conditions set when it approved the AOL-Time Warner merger. ... VeriSign will surrender control of the .net and .org domains in order to remain the top .com registrar until at least 2007.
Edited by Alex Lash.