In addition to Gateway's decision to lay off 25% of its global work force and close some facilities, the ailing PC marketer will significantly pare marketing activities heading into the fourth quarter, typically the most important sales period after the back-to-school shopping spree. Gateway will scale back national mass-market spending to focus on its role as a local provider of technology products and services, a spokesman said. Gateway creates advertising in-house.
President of Ziff Davis Internet unit resigns
Wenda Millard resigned as president of Ziff Davis Internet, the online arm of Ziff Davis Media. Her resignation was announced to staffers Aug. 28, though Ms. Millard had informed acting CEO Avy Stein of her decision Aug. 23. Reached at her home, Ms. Millard, 47, told AdAge.com that "I was hired to build a new company," but that Ziff Davis' plans for a stand-alone Internet arm fell prey to the tech downturn. The current management of Ziff Davis Media told the company it wishes to reintegrate the Internet operation with the rest of the company's infrastructure.
Primedia sued for failing to convert stock options
A lawsuit filed in a California District Court accuses Primedia of failing to fulfill a promise to convert stock options in Primedia Internet ventures into standard Primedia stock. The class-action suit, filed on behalf of one Primedia employee, accuses the publisher of violating Racketeer Influenced and Corrupt Organizations Act statutes, as well as breach of contract and promissory fraud. A Primedia spokesman called the lawsuit "completely frivolous and baseless" and said the RICO allegations were "particularly infuriating" and had "no basis in law or fact." On Aug. 30, Primedia stock closed at $5.05, just above the all-time low of $4.58 it hit Aug. 23.
Martin/Williams lays off 22 people, 7% of staff
Martin/Williams, Minneapolis, on Aug. 30 laid off 22 people-or 7% of its staff-due to the faltering economy. The cuts come across all lines of business and staff levels. Agency President Steve Collins said most clients had reduced spending and executives had hoped new business would forestall layoffs, but that had not been possible. This is the second layoff for the Omnicom Group shop; in April, 18 people were laid off.
Standard Media files for Chapter 11 bankruptcy
Capping one of the wildest rides in magazine-publishing history, Standard Media International, the publisher of the Industry Standard, filed for Chapter 11 bankruptcy protection in a California Bankruptcy Court Aug. 27. The company claimed liabilities of $10.4 million to its 20 largest creditors, and that overall assets and debts were in the $10 million to $50 million range, according to published reports. The Industry Standard, which last year led all magazines by running 7,440 ad pages, ceased publication in August.
CEO Bible poised to exit Philip Morris next year
Philip Morris Cos. announced Aug. 29 that Chairman-CEO Geoffrey Bible will retire next August at age 65. The move was expected, and analysts believe the parent of Philip Morris USA and Miller Brewing Co. and main owner of Kraft Foods will appoint a successor from inside the company. Possible candidates include Chief Financial Officer Louis Camilleri and Michael Szymanczyk, president-CEO of the tobacco unit.
Adobe narrows review for $20 mil account
Adobe Systems, San Jose, Calif., maker of PhotoShop and Acrobat, is considering four agencies in the review for its $20 million advertising account. They are incumbent WPP Group's Y&R Advertising, Omnicom's Goodby, Silverstein & Partners and Havas Advertising's Black Rocket Euro RSCG, all San Francisco, and Interpublic's Deutsch, Los Angeles. Select Resources International, West Hollywood, Calif., is handling the review.
Pepsi-Cola taps Euro RSCG unit for Europe, Africa
PepsiCo's Pepsi-Cola International tapped Euro RSCG Marketing Services' KLP Euro RSCG, London, to handle its $13 million account in Europe and sub-Saharan Africa. The agency will handle Pepsi, 7-Up and Mirinda in 44 countries. KLP Euro RSCG won the account after a review including incumbent Omnicom's Claydon Heeley Jones Mason and Billington Cartmell.
As expected, IBM Corp. on Aug. 28 said it consolidated direct and interactive marketing assignments at WPP's OgilvyOne and Wunderman, both New York (AA, Aug. 27). ... Dial Corp. announced it sold its specialty personal-care brands Sarah Michaels and Freeman Cosmetics to Hathi Group, a marketer of medical equipment and personal-care products. Terms of the deal were not disclosed. ... Kraft Foods announced it bought Borden Foods Corp.'s It's Pasta Anytime! meal line, as expected (AA, Aug. 13). The year-old line of pasta and sauce single-serving meals will become part of Kraft's Cheese, Meals & Enhancers group, based in Glenview, Ill. Terms of the deal were not disclosed. ... ING Americas, the U.S. unit of the Dutch financial-services company, awarded its $15 million creative account to Omnicom's DDB Worldwide, New York. The incumbent was Havas' Jordan McGrath Case & Partners.