Categorized | the roundup

The Roundup June 30

AIG building and sign
Boardroom or barroom?

Goodbye and thanks for all the fish.

AIG shareholders, a.k.a. U.S. taxpayers, ousted the majority of the company’s leadership at AIG’s annual shareholders meeting Tuesday, removing the overseers of one of the biggest corporate unravelings in American history. . . .

The new board includes former executives from American Express (AXP, Fortune 500), Boeing (BA, Fortune 500), KPMG, Delphi, Sears (SHLD, Fortune 500) and Northwest Airlines (DAL, Fortune 500). Liddy called them all “extremely talented,” and suggested they they were well suited to help oversee the company’s transition over the next several years.

(“‘Goodbye and good riddance’ AIG directors!,” CNN Money, June 30) Readers of this blog know that I advocate highly independent boards that are not staffed by “part-timers,” not beholden to management, and armed with independent auditing staff. While it’s good to see the lazy bums on the AIG board go, the government and shareholders of AIG missed a grand opportunity to fundamentally change the AIG board and start the wave rolling through corporate America. Bad news is this: if you look at the board, you’ve got executives from one company that’s had a tough go for the last few years (Boeing), one that’s skirted bankruptcy (NWA), and one that’s in bankruptcy (Delphi). Extremely talented, indeed.

Hyundai shows how it’s done.

With gas prices rising and car sales in the dumps, Hyundai is offering new car buyers gas at $1.49 a gallon for a year. . . .

As an alternative, buyers can take a $1,000 rebate instead of the gas incentive. Other cash rebates are still available whether or not the customer opts for the cheap gas.

(“Hyundai’s latest offer: Cheap gas,” CNN Money, June 30) Hyundai again scores with an offer that doesn’t necessarily mean giving away the store (although a $1,000 rebate is a pretty hefty fire sale). Hyundai is offering peace of mind more than money, but people put a higher value on security than just plain dollars. Do the math. The gas price guarantee covers the first 12,000 miles. At 25 mpg, that’s 480 gallons of (low grade) gas. Hyundai would have to pay $2.08 for each gallon of gas for this guarantee to be worth $1,000, the alternative offer. So gasoline has to average $3.57 per gallon. If, on the other hand, gasoline averages about $3.10 a gallon, which is most likely, the value of this offer is $772 for a 25 mpg car (for a 30 mpg car, it’s worth $672). Now, as the gas mileage increases on the car, the value of the deal falls. In essence, Hyundai is offering consumers a 400 gallon plus futures contract. If you’re expecting sky-high fuel prices, you win. Remember when we all cut back on our driving as well as budgeted back on other items when gas flew past $4.00 a gallon? That’s the security they’re offering and it’s worth far more than the $1,000 alternative.

Cisco hints at a Web apps future

[Cisco] Senior Vice President Doug Dennerline told Reuters today that his company may develop Web-based applications for creating, editing and sharing documents via its WebEx networking service.

Microsoft is developing a Web-based version of Office programs – such as Word, Excel and PowerPoint – as an answer to Google Apps, which offers similar alternatives. Microsoft’s product reportedly will be free to individuals but not to companies; Google’s pricing is similar. Adobe also has a similar product.

(“Cisco may join Web apps battle,” Seattle Post-Intelligencer) Now, if Cisco had real smarts, they’d release the WebEx API to outside developers to develop a custom suite of corporate productivity tools to be used with WebEx, a kind of WebEx store. “Examples gross as earth exhort me”: it continually amazes me that folks like Cisco can sit back and watch companies like Apple and Facebook make tons of money by letting other companies do the application development heavy lifting and marketplace survival of the fittest and still, with evidence of such mass and charge still opt to do it in-house and hope that they come up with a market leader. The great advantage of releasing the API is it allows the entire inventiveness of the entrepreneurial world come up with the best solution at the lowest cost while still making the WebEx platform indispensible. Not only that, these Web-based apps are already out there, finished, ready to be integrated into WebEx. Rather than spend all the time developing a Web-based word processor, just like ThinkOffice and NeoOffice and, yes, GoogleDocs just integrate their platform with WebEx. Go figure.

Just one more reason a credit-card owner’s best friend is a sharp pair of scissors.

Citigroup has sharply increased interest rates on up to 15m US credit card accounts just months before curbs on such rises come into effect, in a move that could fuel political anger at the treatment of consumers by bailed-out banks.

People close to the situation said that Citi, which is about to cede a 34 per cent stake to the US government as part of its latest rescue, had upped rates on between 13m and 15m credit cards it co-brands with retailers such as Sears.

(“Citi raises card rates on millions,” Financial Times, June 30) Yes, we’re talking about retail-branded cards, which are some of the riskiest credit cards in the business. But as I’ve said from the very beginning in this blog, credit cards are always your dead last choice for borrowing money.

And in troubling news for small-fry filmmakers . . .

Viacom’s Paramount Pictures studio is seeking to merge its home entertainment division with a rival and is in advanced talks with Sony Pictures and News Corporation’s Fox studio, signalling that Hollywood could soon see a wave of consolidation.

(“Paramount in home entertainment merger talks,” Financial Times, June 30) Believe it or not, the small-time, independent filmmaking world butters its bread with home entertainment sales. But DVD sales and rentals are way down for a variety of reasons, most notably the uncertainty about its replacement as either HD or Blu-Ray for oh those many months. Right now, Paramount is mainly looking to merge disc production capabilities and gain economies of scale. In the end, however, it’s entirely possible that we’ll see all-out mergers of the home entertainment divisions. If that happens, indie’s main conduit to the consumer market will be broken. That’s why the future of independent film is in digital downloads and video-on-demand.

Be Sociable, Share!

Leave a Reply

Shoestring Book Reviews

Shoestring Venture Reviews
Richard Hooker on Jim Blasingame

Shoestring Fans and Followers



Business Book: How to Start a Business

Shoestring Book

Shoestring Venture in iTunes Store

Shoestring Venture - Steve Monas & Richard Hooker

Shoestring Kindle Version # 1 for e-Commerce, # 1 for Small Business, # 1 for Startup 99 cents

Business Book – Shoestring Venture: The Startup Bible

Shoestring Book Reviews

Shoestring Venture Reviews

Invesp landing page optimization
Powered By Invesp
Wikio - Top Blogs - Business