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B&E This Fortnight
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B&E This Fortnight

Issue Date - 17/03/2011

Time Inc.’s CEO – Fired!

After six months on the job, Jack Griffin, who took charge as CEO of the world’s largest magazine publisher Time Inc. last August, has been shown the door. Meanwhile, the division will be temporarily run by an interim management committee comprising three Time Inc. executives – Editor-in-chief John Huey, General Counsel Maurice Edelson and CFO Howard Averill – until a new CEO is hired. This is what Jeffrey Bewkes, CEO of Time Inc.’s parent company (Time Warner) conveyed to Time Inc.’s employees through an email. Griffin’s short tenure and untimely departure comes as a shock to most, including the sacked CEO. Despite his reputation of being an extremely accomplished veteran in the industry, the company claims that his leadership style and approach at work did not gel well with the culture in place. There are rumours doing the rounds that Griffin was axed because Edelson and Averill wanted him out for personal reasons (they were apparently unhappy of having been left out of an executive summit planned for March 2011), it is no secret that this former President of Meredith Corp.’s national media group, had failed to gain the trust of his employees and the top management at Time Inc. in the many months that he had spent at the company. Therefore, his exit was perhaps necessary to prevent other key executives from leaving the company.

AMAZON’s free deal?
Amazon, in an open war with Netfix (which offers online streaming service) unveiled its “free”, instant movie and TV show streaming option for those who are willing to pay (or are already paying) for its $79 Amazon Prime service. The company announced this on February 22, 2011. When news of this became public, shares of its competitor – Netflix, dropped by nearly 6%. Interestingly, even investors of the Amazon stock did not find the news too amusing as its shares fell by 3.2%. The move puts Amazon on a collision course with Netflix, which aims to dominate the online streaming market. The giant has claimed that it will make 5,000 films and TV shows available for “free”, just 25% in count of that offered by Netflix. Also, Amazon’s claims are not finding many buyers as its “free” selection is only a mere proportion of the 90,000 titles and shows that are mentioned in its catalog. Sample this: Actually, Amazon currently offers five of this year’s 10 Best Picture Oscar nominees, but none are included in the free offer. So, if you want to watch The Social Network, it will still cost you $3.99 for a 24-hour rental or $14.99 to buy permanent viewing rights, whether you are subscribed to its Prime service or not.

Sanofi’s $20 bn bet
French drug giant Sanofi-Aventis announced on February 16, 2011, that it is all set to buy the $4.5 billion-a-year profit-making Genzyme in an all-cash deal worth $20.1 billion. This represents a premium of 4.4% on the share price of the target (as on October 4, 2010, the first day of offer). This second biggest deal in the biotech space will give Sanofi a foothold in the market of diseases with small patient populations. Genzyme, which produces expensive medicines for disorders such as Fabry, Gaucher, and Pompe diseases, will help Sanofi compensate for declining revenue from drugs that it is set to lose patent rights.

RBS’ £1.13bn loss
Hard times are not yet over for RBS. The sign – a loss of £1.13 billion in FY2010. The good news however is that its revenues in 2010 rose 10% to just under £33 billion, on the back of solid growth in the bank’s core retail and commercial operations. With the process of the recovery of bad debts in place, CEO Stephen Hester feels that the performance is nothing but ‘solid progress’ for RBS. Talk about optimism!


Gate’s foundation on the greener side
Amid global unrest over food security, the Bill & Melinda Gates Foundation announced on February 27, 2011, that it is forging a new effort to support agricultural research projects in Africa and Asia. The intention: To help small farmers increase crop yields and farm incomes. With a long history in the field of agricultural development in Africa, the Foundation further plans to donate $70 million to new ventures that will focus on issues that are leading to threaten food production in the developing world. These include crop diseases, pests, poor soils and harsh weather. The foundation will also spend $2 billion for similar projects across other developing nations. With a contribution of $32 million over the next five years, UK’s Department for International Development will be the biggest benefactors of this operation.


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