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Upending the diversification strategy that spawned the company nearly 15 years ago, RJR Nabisco is splitting its food and tobacco units into two companies, and selling its international tobacco business to Japan Tobacco Inc. for $8 billion. The moves reflects pressure from shareholders, namely financier Carl Icahn, a 7.7% owner, who have argued that financial drains on the tobacco business have depressed the vitality of the company's cookies and crackers operations. RJR Nabisco will continue to exist as a holding company but will be renamed Nabisco Group Holdings. R.J. Reynolds Tobacco Co. will be left with $5.6 billion in domestic sales, No. 2 to Philip Morris Cos.

True North profits up; Leap reports loss

Two Chicago-based agency companies reported radically different financial results, with True North Communications announcing net income jumped 25.7%, excluding unusual items, in 1998 and Leap Group reporting a loss for fiscal '99. True North's net income hit $69.4 million. Despite Foote, Cone & Belding's resignation of the $240 million Mazda Motor of America account, precipitated by True North's acquisition of Chrysler agency Bozell Worldwide, the holding company's revenue for the full year increased 3.1% to $1.2 billion. Fourth-quarter net income, excluding unusual items, was $34.7 million, up 33.3% from the previous year, while revenue rose 3.8% to $356 million. Leap, for the year ended Jan. 31, had a net loss of $18.3 million vs. a net loss of $5.6 million for fiscal '98; revenue climbed 17.2% to $35.9 million. In the fourth quarter, Leap reported a net loss of $1.8 million, vs. net income of $133,000 a year ago. Consolidated revenue for the period fell 28.8% to $8.14 million. One bright spot in fiscal 1999 was Internet-related business, where Quantum Leap Communications saw revenue jump 69%.

Goodby cashes in with E*Trade's $60 mil acc't

E*Trade Group moved its $50 million to $60 million account to Goodby, Silverstein & Partners, San Francisco, as expected (AA, March 8). Incumbent Gotham, New York, chose not to develop new work; instead Gotham executives said they wanted their past E*Trade advertising to represent their submission. E*Trade, facing an ad onslaught from brokerage giants, said the move to Goodby will enable the company to move its marketing message beyond introducing its Web site and promoting low fees, to building a brand positioning. The account is the first pure e-commerce win for Goodby.

ShopKo's $12 mil acc't chased by 10 agencies

ShopKo Stores named 10 agencies for the first round of the review for its $12 million broadcast account. They are Chicago shops Cramer-Krasselt, Grant/Jacoby, Leap Partnership, Jack Levy Associates and Publicis & Hal Riney. Also in the hunt: Campbell-Ewald, Warren, Mich.; Colle & McVoy, Minneapolis; D'Arcy Masius Benton & Bowles, St. Louis; Hoffman York, Milwaukee; and Valentine Radford, Kansas City, Mo. Incumbent Bozell Worldwide, Chicago, isn't participating.

Colle, Karsh agencies getting new parents

Two agencies headed toward new parents last week. The board of Colle & McVoy, Minneapolis, unanimously agreed to recommend approving a merger agreement with MDC Communications Corp., Toronto. MDC would pay $19 million for an 80% stake in Colle & McVoy. Farther west, Integer Group, a Denver-based holding company for retail ad agencies, completed its acquisition of Karsh & Hagan. Karsh & Hagan will continue to operate separately.

NBC, GE Equity to buy stake in ValueVision

NBC and sibling company GE Equity agreed to purchase 19.9% of ValueVision, the nation's third-largest home shopping network. The deal is worth about $56 million. NBC and GE Equity have an option to increase their share to 39.9%. The companies said they will "seek to rebrand ValueVision's television home shopping network in conjunction with an Internet portal" over the next 12 months.

Ahold buys East Coast grocery chain Pathmark

Dutch-based Royal Ahold acquired for $1.7 billion the East Coast Pathmark supermarket chain, which has 12% of the tri-state market. The purchase of $3.7 billion Pathmark, with 132 stores in New York, New Jersey and Pennsylvania, adds to Ahold's already substantial East Coast holdings. Ahold has $30 billion in worldwide sales.

DiMaggio dies; parlayed sports fame into ads

Joe DiMaggio -- known as "Joltin' Joe" to a generation of baseball fans and "Mr. Coffee" to another generation of TV watchers -- died March 8 at age 84. The New York Yankees great broke new ground in the ad world by gaining prominence as an pitchman long after he had retired from sports. The Hall of Famer appeared in his first Mr. Coffee advertising in 1973, more than two decades after he had retired from baseball. A couple years later, Miller Brewing Co. turned to a slew of other retired athletes to carry its "Tastes great/Less filling" message for Lite beer. Mr. DiMaggio continued to appear in advertising for the coffeemaker into the mid-1980s. Ted Bates & Co. created Mr. Coffee advertising for North American Systems in the '70s; Sunbeam Corp. currently owns the brand. Mr. DiMaggio also appeared in advertising in the early '70s for New York's Bowery Savings Bank and later for Manufacturers Hanover Trust. In one unusual tribute to Mr. DiMaggio, Sony Pictures Entertainment's Game Show Network on March 14 ran a 1955 episode of "What's My Line?" featuring the "Yankee Clipper" as a mystery guest. The episode was part of the cable channel's "Black & White Sunday"

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