AOL Time Warner CEO to Add Chairman Title
Internet pioneer Steve Case, architect of the deeply troubled merger that created AOL Time Warner Inc., said he would step down as chairman because his leadership had become a "distraction" for the media giant. Case's resignation, which becomes effective in May, means the two executives who devised the combination have become casualties of the deal. Former AOL Time Warner Chief Executive Gerald M. Levin quit a year ago.
Later in the week, the company elected Chief Executive Richard Parsons to the additional post of chairman. The company's top ranks are swept clean of executives who came from America Online Inc. when it merged with Time Warner Inc. two years ago in a match that was supposed to reinvent the media world but quickly became a watchword for failed corporate ambitions.
CNN Chairman Leaving to Run Think Tank
Walter Isaacson abruptly resigned as chairman and chief executive of CNN News Group after just 18 months, a period during which he oversaw an overhaul of the cable news network but was unable to stop rival Fox News Channel from surpassing it in the ratings.
Isaacson, according to associates, seemed to be settling into his new role as a television executive. Isaacson is a former managing editor of Time magazine, which like CNN is part of AOL Time Warner Inc.
During a conference call with reporters, Isaacson said he "loved the journalism" but was less comfortable with the management responsibilities that accompanied his post. He said he was not pressured to leave.
Isaacson will become president and chief executive of the Aspen Institute, a Washington-based think tank focusing on environmental and economic issues.
His deputy, Jim Walton, a 22-year CNN veteran, will succeed him at CNN News Groups, overseeing CNN/U.S., CNN Headline News and international operations.
Supreme Court Upholds Copyright Extension
The Supreme Court gave Hollywood studios a big victory when it upheld a law that extends the copyrights of movies, songs and books.
The stakes for the film industry were huge. It could have lost an estimated $400 million a year in revenue, according to Justice Stephen G. Breyer.
It also could have lost control of thousands of old movies and films that now stand to have new lives via DVDs and other technology.
Under pressure from Hollywood, Congress repeatedly has extended the copyrights of creative works that were about to go into the public domain.
The most recent such law, the 11th in the last 40 years, was the Sonny Bono Copyright Term Extension Act of 1998, which added 20 years to all copyrights, both old and new.
Had Congress not acted, Walt Disney Co.'s cartoon characters, including Mickey Mouse and Donald Duck, classic movies such as "The Wizard of Oz" and "Gone With the Wind" and music such as George Gershwin's compositions all could have soon lost their copyright protection.
Kmart to Shut Down 326 Stores, Slash Jobs
Kmart Corp. said it would shutter 326 stores across the country, including 19 in California, as part of the company's plan to emerge from Chapter 11 bankruptcy protection as soon as April 30.
The closures will result in 37,000 job cuts and represent the second wave of retrenchment for the retailer, which filed for bankruptcy protection last January and shut down 283 stores soon after.
Kmart's latest cutbacks will eliminate 2,287 jobs in California, although the company still will operate 129 stores in the state.
The Troy, Mich.-based retailer has struggled in the last several years to find a niche in the discount store world that it helped create, battling Wal-Mart Stores Inc.'s image as the low-price leader and Target Corp.'s profile as the hipper discount store alternative.
Analysts also have said that poorly stocked shelves and messy stores have hurt Kmart's sales, and it didn't help that the holiday season was a poor one for most merchants.
FCC Chief Reassures Panel on Media Limits
The government's chief communications regulator told lawmakers that he shares their concerns about growing media consolidation and hinted that he's unlikely to eliminate broadcast ownership rules, as some have suggested he might.
Eager to show that he still has an open mind on the issue, Federal Communications Commission Chairman Michael K. Powell -- a past critic of the FCC's media ownership restrictions -- assured members of the Senate Commerce Committee that he wouldn't permit media giants to dominate local television and radio markets.
"I am concerned about media concentration, particularly in radio," Powell told the committee, which heard testimony from all five FCC commissioners for the first time in nearly five years. He acknowledged that his agency "has to start looking at the media marketplace through the eyes and ears of consumers."
Intel the Bright Spot in Tech Earnings
Intel Corp. reported stronger-than-expected fourth-quarter earnings amid increased semiconductor sales and signs of recovery in Asia and Europe.
The Santa Clara, Calif.-based firm said it gained market share in most of its businesses despite sluggish corporate spending. But executives took pains to emphasize that the surprising fourth-quarter pickup doesn't necessarily mean that the chip industry is on the rebound.
Just days after Intel's results, Sun Microsystems Inc. posted its largest net loss ever and Advanced Micro Devices Inc. reported its sixth consecutive quarterly loss. IBM Corp. was in the black, but its profit declined for the sixth quarter in a row.
President of MCA Records Resigns
Jay Boberg abruptly quit as president of Vivendi Universal's MCA Records, becoming a casualty of the music industry's deep sales slump.
Universal Music Group, the world's largest record conglomerate, also realigned its management structure, putting MCA under the direction of Jimmy Iovine, who heads the larger Interscope Geffen A&M; division.
The company said MCA promotion chief Craig Lambert will run the label and report to Iovine until Boberg is replaced.
The moves follow a difficult year at Santa Monica-based MCA, which had meager sales for such acts as pop-reggae star Shaggy and pop band A-Teens.
The label also releases albums by rock band Blink 182 and R&B; star Mary J. Blige.
Vivendi Universal's giant music operation has been under pressure to boost its bottom line even as album sales are dropping industrywide.
Microsoft to Pay a Modest Dividend
Microsoft Corp. said it would spread some of its $43-billion cash hoard through its first dividend, paying out a modest 16 cents a share starting next month.
Investors had pressed for a dividend, but the announcement failed to take the edge off Microsoft's warning that revenue for the next year and a half would be hurt by slowing sales growth for the money-losing Xbox home entertainment systems and the MSN Internet service.
The decision to pay a dividend was motivated more by pending resolutions of some of the biggest lawsuits against the company than by President Bush's proposed elimination of federal taxes on dividends, executives said.
The payout, which will net Microsoft Chairman and top shareowner Bill Gates an extra $100 million a year, is "a long-term commitment to shareholders" that could increase over time, the company said.
Ford Accused of Hiding Evidence on Rollovers
Ford Motor Co. faces legal sanctions for allegedly concealing evidence in lawsuits involving one of its most controversial vehicles -- the 15-passenger van that has been the subject of government safety warnings and numerous death and injury claims stemming from rollover wrecks.
Ford is being pressed to explain why it can't locate records of key handling tests it says it performed before marketing the vans.
The company says the test data probably were destroyed, a possibility that a federal judge called "very disturbing." Plaintiffs have been seeking the records to determine what the company knew about the vans' handling characteristics before it put them on sale.
Moreover, Ford lawyers and witnesses have been forced to retract statements made under oath in which they denied that Ford had conducted certain other tests of the vans' stability that plaintiffs say show the vehicles were rollover-prone.
Company attorneys say there was no intent to deceive or withhold information.
For a preview of this week's business news, please see Monday's business section.