Cash-Rich Tech Companies Avoid M&A Path

Financial Times

 

 

A handful of the largest US technology companies have increased their cash mountains by 40 per cent over the past year, taking their reserves to nearly a quarter of a trillion dollars, according to figures released in recent days.

Conservative balance sheet management in the face of economic uncertainty and the failure of an anticipated wave of mergers and acquisitions to materialise have resulted in a massive build-up of liquidity among a small group of leading companies.

The 10 largest tech companies added more than $65bn to their reserves since the depths of the slump a year ago, according to a Financial Times analysis. That has come in spite of declining revenues over that period at companies such as Microsoft, Cisco Systems and IBM.

Rising competition in some big tech markets, such as mobile computing, has also led the largest companies to hoard reserves, led by Apple, now the richest tech group with nearly $42bn in cash and investments.

Tech executives such as John Chambers, chief executive of Cisco, had predicted that last year’s slump would lead to a shake-out in the industry with financially stronger companies looking to do deals.

Few companies were prepared to sell as share prices hit their lows, however, and the speed of the turnround in tech stocks has now made big deals less attractive.

Paul Jacobs, chief executive of Qualcomm, the world’s largest maker of wireless chips, said last week that his company had stepped up the number of small deals it carried out as it looked to acquire new technologies. But he added that bigger potential acquisitions looked too expensive.

Other groups, such as Google, have increased the pace of their dealmaking in recent months to strengthen their technological capabilities as they seek to extend their reach into new parts of the tech landscape.

IBM said last week that it had pulled off $1bn of acquisitions in the first quarter, mostly for cash, in a deliberate pick-up in purchases of smaller companies.

Overall, however, M&A in tech receded during the slump. The value of global tech deals announced in 2009, at some $125bn, was down nearly a fifth from the year before, according to figures from Thomson Reuters. Even an increase in the first quarter this year still left the level of dealmaking at barely half its level of two years ago, before the recession.

The cash build-up has led some groups to promise a return to larger share buy-backs.

U.S. Steps up Probe of Tech Hiring Practices

The Wall Street Journal

Probe seeks to uncover antitrust violations and gentleman's agreements

The Justice Department is stepping up its investigation into hiring practices at some of America's biggest companies, including Google Inc., Intel Corp., International Business Machines Corp., Apple Inc. and IAC/InterActiveCorp., people familiar with the matter said.

The inquiry is focused on whether companies, particularly in the technology sector, have agreed not to recruit each others' employees in ways that violate antitrust law. Specifically, the probe is looking into whether the companies' hiring practices are costing skilled computer engineers and other workers opportunities to change jobs for higher pay or better benefits.

After a probe that began more than a year ago, Justice Department investigators have concluded that such agreements do raise significant competitive concerns, according to the people familiar with the matter.

But the leadership of the antitrust division hasn't yet decided whether—or how—to challenge the hiring practices, these people said. About a dozen companies are meeting with top antitrust officials at the Justice Department this week and next, some to defend their practices, others to provide information.

Antitrust experts say the Justice Department could argue that an agreement between competitors that holds down labor costs is as much a violation of antitrust laws as an agreement to fix prices.

Such agreements are "very close to the line," said Melissa Maxman, an antitrust lawyer at the law firm Cozen O'Connor. "They're not agreeing on price, but they're kind of agreeing on costs." Skilled computer scientists with some management responsibilities, for instance, often make base salaries of $180,000 to $210,000. Compensation for the most sought-after workers typically soars far above that and includes bundles of stock options and bonuses.

The Justice Department hasn't confirmed the existence of the investigation, and a spokeswoman declined to comment Friday. But several companies said they have received requests for information on the way they hire employees.

"IBM is one of many companies that have been contacted by government officials in a broad-ranging inquiry of technology and nontechnology companies regarding hiring practices," said company spokesman Edward Barbini. "We are collaborating with the government's inquiry."

Some companies are defending their recruiting practices. "Since investigations of this nature are confidential, we will not comment on what the Department of Justice may or may not be doing," said Intel spokesman Chuck Mulloy. "However," he said, "we believe our hiring practices are lawful and don't harm competition."

Google declined to comment. Apple and IAC didn't immediately respond to requests for comment.

Behind the scenes, technology companies are making the case that agreements among companies are not anticompetitive and don't affect employees' salaries or the availability of jobs. They say such agreements are commonplace, used by companies to maintain good relationships with business partners.

Some tech companies also say the agreements under investigation only stop them from cold calling each other's employees, not from hiring them.

The technology industry makes the case that it would be harder to enter into collaborative ventures with other companies if they fear losing valuable employees.

But Justice Department lawyers could respond that such agreements distort the labor market, theoretically harming the economy by cutting incentives for other people to enter such fields.

"In the long run, this is going to distort and depress the incentives for people to actually develop the talents and skills that are useful in this market," said Salil Mehra, a Temple University law professor who formerly worked in the Justice Department's antitrust division.

Policing the labor markets hasn't been a central focus of antitrust enforcers in recent years. But the Justice Department did act against what it saw as efforts to manipulate the labor market. It brought a civil case against a group of hospitals in Utah in 1994, alleging that they had illegally conspired to hold down nurses' wages by exchanging information about their pay.

A year later, it took action against the American Bar Association for allegedly using its accreditation process to force universities to raise law-school salaries. Both cases were settled.

The current investigation is the latest by antitrust enforcers to take aim at the often close-knit relations between tech companies, particularly in Silicon Valley.

The Federal Trade Commission's ongoing investigation into interlocking boards of tech companies forced Google's CEO, Eric Schmidt, to resign from the board of Apple.

Another casualty of the FTC probe was Genentech CEO Arthur Levinson, who stepped down from Google's board. He had been doing double duty as a director for Apple and Google until the FTC started asking questions.

More recently, the decision by legendary venture-capital investor John Doerr to resign from Amazon.com's board was influenced by the FTC investigation, according to a person familiar with the matter. Mr. Doerr—who recently declined to comment — is also on the board of Google.

Why Tech Continues To Bow To Best Buy

Business Week

As the last major electronics retailer standing, the chain has unparalleled clout. And CEO Brian Dunn means to use it, shaping technologies and helping to develop products

For the past four years, employees at Best Buy (BBY) have taken regular tours of what the company called its "retail hospital." A group of about a dozen would don white lab coats, walk a row of real hospital beds, and scan charts describing the maladies afflicting each of the giant retailer's major competitors. But this fall, Best Buy staffers made their last trip to the darkened room on the company's Richfield (Minn.) campus. The retail hospital is closing because all of Best Buy's major rivals have succumbed to terminal illness. "It's kind of like ultimate fighting," says Barry Judge, the company's chief marketing officer. "One retailer goes down, and then who's next?"

At least for now, Best Buy stands as uncontested champ. It's the last major consumer electronics retailer in the country this holiday season, after the liquidation of Circuit City earlier this year. But Brian J. Dunn, who became Best Buy's chief executive officer in June, isn't taking success for granted, especially with rising competition from nontraditional rivals such as Wal-Mart Stores (WMT) and Amazon.com (AMZN). So Dunn has ambitious plans to take advantage of Best Buy's newfound clout: He wants to go beyond the typical big-box retailer role of selling commodity products such as televisions and personal computers and become a central player in determining which products come to market and how big-spending customers choose the latest gear.

Best Buy plans to launch its own advertising business early next year. The company will let movie studios, PC makers, and other companies run trailers, songs, or commercials on the thousands of televisions, PCs, and cell phones within its stores.

The plan is already under way. Rather than waiting for electronics makers to ship Best Buy the same products that its rivals get, Dunn's lieutenants are walking factory floors with executives from companies such as Hewlett-Packard (HPQ) and Toshiba, influencing product development and design. The retailer is pushing suppliers to use standardized software and digital services so consumers can listen to music or watch movies on any device. And Best Buy has set up its own venture capital fund to pour millions of dollars into startups from Silicon Valley to Asia. The goal is to shape development of new technologies in promising fields such as green vehicles, digital health, and home monitoring. "We are talking to players deep into engineering the future," says Dunn. "It leads us nicely to a space where we can make a real difference to consumers."

"AVANTE GARDE"

Shoppers wandering Best Buy aisles this holiday season will see the difference. Along with the latest flat-screen TVs, digital camcorders, and computer games, the company's shelves are stocked with exclusive items. Among them: the thinnest laptop on the market, a motorcycle that runs solely on electricity, and a watch-like gadget you attach to your wrist to monitor daily activity and sleep patterns. "We want to become a digital playground where people come in, experience it, try it, and find out how all these things can work together around their life," says Dunn.

The strategy, for all its ambition, could backfire. As Best Buy broadens its focus, it risks clashing with crucial partners. The company is already selling certain products in competition with suppliers, and will likely push other products off store shelves to make room for gear it's developing. Best Buy's new role makes it a kingmaker for companies that play along and a serious threat for those that refuse. "Best Buy is avant-garde in its thinking," says Eugene Fram, a retail expert and professor emeritus at the Rochester Institute of Technology's College of Business. "The big question is whether they can succeed without alienating their partners."

Executives at several major consumer electronics companies worry privately about Best Buy's growing influence.

They're concerned that Dunn and his team could block them from getting innovative products in front of customers or favor Best Buy-backed goods over their own. "We used to call them the 800-pound gorilla," says the executive of one company that sells televisions and other products to Best Buy. "Now with a lot of competition gone, they're the 1,000-pound gorilla."

One example of the rising sensitivity is Best Buy's recent move into digital services, including music and movies. The company acquired the online music service Napster a year ago and then took a stake in CinemaNow, Sonic Solution's (SNIC) movie-streaming service, in November. Now the retailer is giving prominent play to Dell (DELL) computers loaded with Napster, beginning with a free year of the music service, and plans similar promotions with CinemaNow through participating partners. Hardware makers, which usually get paid bounties to load such software on their PCs, may find it tougher to get payments from rival services such as Netflix (NFLX) or Rhapsody if they want a piece of the $300 billion digital services market.

Apple (AAPL), Sony (SNE), and other manufacturers could retaliate if they feel Best Buy is getting too heavy-handed, although they would think long and hard before doing so. They could pull products out of the retailer's stores or forge closer relationships with rivals such as Wal-Mart. Michael Fasulo, Sony Electronics' chief marketing officer, says that so far his company and Best Buy have avoided serious rifts in part because their executives talk every week and the discussions tend to be more cooperative than adversarial. "They are so focused on the customer experience, and they give us great insights into how to translate technology for customer needs," he says. "We are both pretty aligned with that."

Dunn is clear about why he's pushing for change. He wants to give Best Buy a strategic edge over other retailers. Slugging it out on price with Wal-Mart, Amazon, and Costco is a brutal business, especially as strapped consumers grow hesitant to buy new televisions and home theater gear. If he can make Best Buy the go-to store to test out the latest gear or get exclusive goodies, he can insulate the company from some of the competition.

SAFE BET

Investors appear optimistic. The company's stock is up more than 80% over the past year, to 44, compared with a 20% increase for the Standard & Poor's 500-stock index. Analysts expect revenues for fiscal year 2010, ending in February, to rise 7.8%, to $48.5 billion, even as profit margins hold steady, according to consensus estimates from Bloomberg. Analyst Thomas Kurey of Gardner Lewis Asset Management, which held about 2 million shares in Best Buy at the end of September, says the company has a very secure position in the tech industry. "The thing about Best Buy is you're not betting on a single technology. Best Buy is going to be there regardless of where technology is," he says. "There's a big swath of customers that are going to want to get a little advice and to touch and feel that new gadget. Best Buy will continue to play an important role in that."

Dunn, now 49, seemed an unlikely future leader when he joined the company in 1985. At 24, he was working off and on and living at home with his mother, Ethel, who prodded him to find a permanent job. She was employed in accounting at Best Buy, which had a dozen stores at the time, and helped him land a position selling VCRs at one Minnesota outlet. The New Jersey native proved a quick study in learning from the best salespeople and managers. He worked his way up and became heir apparent in 2006.

Brad Anderson, the previous CEO, says he wanted to stay in the job "until I found a leader who would take the organization farther than I could."

On a recent weekday in New York City, the burly Dunn strolled into a store in Union Square to check out the company's new "discovery zones." In the Best Buy Mobile zone, for instance, dozens of customers were checking out how Motorola's (MOT) new Droid smartphone stacks up against Apple's iPhone. Although it's too early to tell whether the strategy that lets users try out multiple brands in one place will goose sales and create a more loyal following, Dunn nods approvingly. "What we're able to do is show how all these things can work together," he says. "Convergence is actually here now, and all those roads will lead through the center of our store."

Best Buy isn't the first to try rewriting the rules of tech retailing. Since Apple started opening retail outlets in 2001, the company has turned its sleek stores into magnets for anyone who wants to test-drive an iPod, iPhone, or Mac. Amazon is trying to make up for its lack of physical stores by offering same-day delivery in several big cities.

BEYOND RETAIL

Still, Best Buy's strategic position is unique. It has more than 1,000 stores, compared with Apple's 280, and sells a wide range of competing products, while Steve Jobs' company doesn't. Best Buy has 155,000 people working in its stores, and its 20,000-strong Geek Squad is in the field every day, helping customers set up home electronics or fixing products on the fritz. Through its Reward Zone program, a sort of frequent flier card for shoppers, the retailer has built up a list of more than 2.5 million customers who shell out thousands of dollars every year for the latest tech gear. "Users come into Best Buy for reasonably good answers and solutions to the question of what's the right gadget to buy," says Manish Rathi, co-founder of Retrevo, an online product-tracking and review company. "Wal-Mart can't solve that today. Neither can Amazon."

The job of knowing just how far Best Buy can push before manufacturing partners push back falls in large part to Kal Patel, executive vice-president for emerging business. Former CEO Anderson hired Patel away from the consulting firm Strategos in 2003 to direct the retailer's strategy, and Dunn has given him broad leeway to transform Best Buy into a technology company. Patel suggests, unapologetically, that Best Buy and its partners will have to get used to a new relationship. "If you're in the technology business, we're going to have to learn to deal with constant conflict," he says.

Over the past two years, Patel has virtually lived on planes and in hotel rooms in an attempt to guide the company's technology push by learning from established giants and startups. On a recent trip to California, he huddled with executives at Cisco Systems (CSCO) to discuss partnerships aimed at connecting more consumers to more devices. While prepared for conflict, Patel also found plenty of collaboration.

In late 2007, Craig Bramscher, chief executive of Brammo, started searching for an investor and retail partner for the Enertia powercycle, a full-size motorcycle that drives like an electric scooter, with no clutch, gears, or transmission. He thought Best Buy was a natural fit, since the company already has service bays for car stereo installations. A few months later, while munching on hors d'oeuvres at a dinner party with a longtime friend, he discovered the friend knew Patel, and the two got in touch. "I thought they were the only company innovative enough to take a risk on us," Bramscher says.

Within weeks, 30 Best Buy employees were in Brammo's Ashland, Ore., headquarters to vet the Enertia. The team spent two days in the skunkworks lab, tearing apart the powercycle and grilling Bramscher's team to determine whether it fit into their growth strategy. They ultimately were convinced, and in August 2008, Best Buy invested $10 million in the company.

As the retailer began lining up approvals in the test markets of California and Oregon to be licensed as motorcycle dealerships, Dunn sent Bramscher a brief note over Twitter. "We're exercising muscles we didn't know we had," he wrote. Best Buy is now pushing to expand the availability of the Enertia to other states.

Dunn and his team, meanwhile, are working on a variety of similar deals. One key area is health and wellness. Earlier this month, the company launched new fitness zones in 40 stores across the nation that include devices such as a Bluetooth-enabled scale that sends weight information to a computer for charting. Next year the company will introduce a toothbrush that wirelessly reports to a PC the number of brushstrokes that a child uses. "We're scouring the world over, bringing in new talent to help us in a particular space," says Dunn.

The entrepreneurial spirit is filtering down to established businesses. Jason Bonfig, vice-president of the computing division at Best Buy, works closely with Toshiba and other PC makers to create notebooks under the Best Buy-exclusive Blue Label and Next Class brands. Based on customer feedback, the designs include perks such as backlit keyboards, bigger batteries, and custom chassis colors. It used to take weeks for color samples or material choices to make their way from Taiwan to the PC maker, then on to Bonfig in Minnesota. Fed up, Bonfig began joining the manufacturers on trips every six months to set road maps with their subcontractors.

BROADER FOOTPRINT

The cozier relations helped on the eve of the Oct. 22 Windows 7 launch, when HP offered to put together an exclusive bundle for Best Buy that included a desktop PC, monitor, laptop, netbook, and wireless router for $1,199.99. Best Buy also got the exclusive on Dell's sleek new $1,799 Adamo XPS notebook, in part because of its early involvement in the manufacturing process. "When you work closely together, there's more time to innovate elsewhere," Bonfig says.

Conflict still happens. Some top PC makers are upset about Best Buy's recent expansion of a service that lets customers reduce the amount of third-party software installed on new computers. Software companies pay HP, Dell, and others hundreds of millions of dollars a year to install trial versions of their programs for virus protection, photo-editing, business VoIP services and the like on new computers; PC makers get another check if buyers sign up to keep using them. Best Buy lets customers select just one antivirus program, say, and removes alternative products. The retailer's executives say they are simply responding to customer complaints that their new machines are overloaded and sluggish. But PC makers are concerned the retailer is trying to grab more of their scant profit pool.

They may be right. One unusual deal Best Buy has struck is with the antivirus company Kaspersky Lab. The Moscow-based company agreed to let Best Buy manage its software and subscription program in exchange for more prominent placement in stores, says Randy Drawas, Kaspersky's chief marketing officer. "We get a broader footprint within Best Buy and are seen as a premium brand," he says. Best Buy salesmen promote Kaspersky's software, and the retailer gets a slice of the revenues when customers use it. PC makers, though, may lose out on revenues as software from rivals such as McAfee are stripped off machines.

Although it is exerting more influence over the types of software installed on devices, Best Buy says it will continue to sell products from companies that opt out of its programs, such as the one aimed at reducing software clutter. That approach may help Best Buy skirt antitrust issues, even as its share of the U. S. consumer electronics market expands from the current 25%. "I hope we're not seen as picking winners and losers," says Dunn. "What we stand for is choice."

In another move, Bloomberg BusinessWeek has learned, Best Buy plans to launch its own advertising business early next year. The company will let movie studios, PC makers, and other companies run trailers, songs, or commercials on the thousands of televisions, PCs, and cell phones within its stores. Sony, Toshiba, and Samsung have already signed on to advertise. Still, the effort could prove controversial since rivals may end up advertising on each other's devices. Dunn won't reveal revenue projections but says the business will "grow into a big piece of what we do."

Dunn clearly relishes this kind of experimentation. As customers drop into stores around the globe this shopping season, they might run into kiosks where they can swap used games or movies, or DJ booths where would-be disc jockeys can pick up digital turntables, headphones, and lighting. Best Buy is testing out different logos and store layouts, even stocking solar panels in a few markets. Many of the tests won't pay off, but Dunn figures the retailer can learn and make adjustments for the future. "The easiest changes are when you are backed up against the corner and it's sort of 'change or perish,'" he says. "Now we're trying to change at a time when we are very, very successful."

How Well Do You Know High Tech's Leaders?

The world of high-tech companies is home to larger-than-life personalities.

Entrepreneurial executives like Bill Gates, frequently the world's richest man, Steve Jobs, one of the few businessmen to become a cult hero, and Craig Newmark, a populist who refuses to maximize the value of his Craigslist, have all changed the world to one degree or another.

Leaders one year are sometimes goners the next, while other onetime heroes face indictment or exile. How well do you know the leaders of high tech?

1) What high-tech veteran left his operating role recently?

A. Bill Gates, chief software architect, Microsoft Corp.
B. Sam Palmisano, CEO, International Business Machines Corp.
C. Larry Ellison, CEO, Oracle Corp.
D. John Chambers, CEO, Cisco Systems Inc.

ANSWER: A. In June, Mr. Gates ended his daily operating role at the company he started, although he remains chairman of the board. He stepped down as chief executive in 2000, but he has remained prominent in helping shape the software giant's technical direction. The 52-year-old Mr. Gates plans to concentrate on his philanthropic endeavors.

2) What activist investor who has profited by taking big stakes in companies and pushing corporate change is struggling with some high-tech bets?

A. Warren Buffett
B. Carl Icahn
C. T. Boone Pickens
D. Henry Kravis

ANSWER: B. Mr. Icahn acquired stakes in Yahoo Inc. and Motorola Inc., among others, and has pushed for strategic change to boost the value of the companies. His 5% stake in Yahoo, acquired this year with the goal of forcing it to sell out to Microsoft, has resulted in his election to the board. But the stock price languishes below his cost of $25 a share. Mr. Icahn invested $2 billion in Motorola and joined its board earlier this year. It has agreed to split the company in two, a move he advocated. But Motorola stock remains well below his cost of up to $18.53 a share.

3) Craig Newmark, founder of Craigslist Inc., and Jim Buckmaster, its chief executive, were sued by which online company that is both a rival and a partial owner of the largely free online classified-ad service?

A. Google Inc.
B. eBay Inc.
C. Yahoo Inc.
D. Amazon.com Inc.

ANSWER: B. EBay acquired a minority stake in Craigslist in 2004. But in April, eBay said in a suit in Delaware's Court of Chancery that the Craigslist leaders have tried to dilute its stake. In a countersuit in California, Craigslist charged that eBay unfairly interfered with its business when eBay started a rival classified-ad service called Kijiji last year.

4) Pick the party affiliation of these high-tech luminaries who are supporting campaigns this year or plotting runs for 2010.

A. Carly Fiorina, ex-CEO, Hewlett-Packard Co.
B. Rob Glaser, CEO, RealNetworks Inc.
C. Mitch Kapor, founder, Lotus Development Corp.
D. Steve Poizner, ex-CEO, SnapTrack Inc.
E. John Thompson, CEO, Symantec Corp.
F. Meg Whitman, ex-CEO, eBay Inc.

ANSWER: A, D and F are Republicans. Ms. Fiorina has been advising Sen. John McCain in his presidential campaign. Ms. Whitman, a McCain fund-raiser, reportedly is considering running for governor of California in 2010. If she does, she's likely to face the state insurance commissioner, Mr. Poizner, who reportedly made nearly $1 billion when he sold SnapTrack, a company that developed GPS tracking technology, to Qualcomm Inc. in 2000. B, C and E are Democrats. Mr. Glaser posted an effusive video blog from a Barack Obama rally in February. Mr. Thompson hosted a Silicon Valley fund-raiser for Sen. Obama. Mr. Kapor has praised Sen. Obama's plans to appoint a chief technology officer for the government and reform the patent system.

5) What high-tech company CEO was briefly strengthened last month by an electoral miscount?

A. John Swainson, CA Inc.
B. Joe Tucci, EMC Corp.
C. Jerry Yang, Yahoo Inc.
D. Antonio Perez, Eastman Kodak Co.

ANSWER: C. Mr. Yang was initially reported to have received 85% of the votes cast at Yahoo's annual meeting in his bid for re-election to the company's board. But, after questioning by major institutional investors, Yahoo investigated and discovered that one investor's vote withholding support hadn't been tabulated because of a glitch by vote processor Broadridge Financial Solutions Inc. When the votes were recounted, it turned out Mr. Yang was re-elected with just 66% of the votes cast. The muted endorsement could serve as ammunition for critics who seek strategic changes at the Sunnyvale, Calif., company.

6) Which of these high-tech chief executives from The Wall Street Journal's 2007 "Women to Watch" list hasn't lost her leadership post?

A. Anne Mulcahy, Xerox Corp.
B. Meg Whitman, eBay Inc.
C. Patricia Russo, Alcatel-Lucent SA
D. Diane Greene, VMware Inc.
ANSWER: A. Ms. Mulcahy remains on the job. Ms. Whitman retired in March to pursue other interests. Ms. Russo was replaced as chief executive at the beginning of September. And Ms. Greene was ousted by the board in July, just before the company publicly announced slowing growth.

7) What Japanese consumer-electronics executive recently saw his company's market value vault to No. 4 on the Tokyo Stock Exchange?

A. Fujio Mitarai, Canon Inc.
B. Satoru Iwata, Nintendo Co.
C. Howard Stringer, Sony Corp.
D. Masayoshi Son, Softbank Corp.

ANSWER: B. At the end of July, Nintendo, benefiting from soaring sales of the Wii videogame console, was ranked No. 4, behind Toyota Motor Corp., Mitsubishi UFJ Financial Group Inc. and mobile-telecommunications provider NTT DoCoMo Inc., all of which have much larger annual revenue. Nintendo had climbed even higher in the past: It briefly hit No. 2 behind only Toyota last year. At the end of July, printer and camera maker Canon ranked sixth; Sony ranked 14th and Internet and cellphone company Softbank ranked 40th.

8) In what country is Jacob "Kobi" Alexander, former chief executive of Comverse Technology Inc., fighting extradition to the U.S. to face charges of backdating stock options?

A. Namibia
B. Bermuda
C. Jamaica
D. Moldova

ANSWER: A. Namibia, a small African nation that doesn't have an extradition treaty with the U.S., is where Mr. Alexander fled in 2006. He is living in a guarded, gated community alongside a golf course. In March, he hosted a party for his son's bar mitzvah, which was attended by more than 200 guests, including some from his son's school in New York, and an Israeli hip-hop artist with an 11-piece backup band.

9) Major companies that buy or build online units often find they come with challenges. Match the executive and his or her company's online subsidiary, all of which face business problems.

A. Jeff Bewkes
B. Katharine Weymouth
C. Steve Ballmer
D. Les Moonves

1. Washingtonpost.com
2. MSN
3. AOL
4. CNET


ANSWERS: A-3. Mr. Bewkes, in his first year as CEO of Time Warner Inc., needs to straighten out or sell the AOL unit, which is losing subscribers rapidly. B-1. Ms. Weymouth, the new publisher of the Washington Post, is committed to eliminating the separation between the paper and online versions of the publication. C-2. Microsoft's CEO, having failed to acquire Yahoo, needs to figure out a strategy to help MSN compete with Google. D-4. Mr. Moonves, CEO of CBS Corp., has to boost revenue and profit growth at CNET to justify the $1.8 billion cash CBS paid for the technology-oriented online news service in an acquisition completed June 30.

By: William Bulkeley
Wall Street Journal; September 29, 2008