The former head of graphic services at Grey Global Group's Grey Worldwide, Mitch Mosallem, 59, pleaded guilty last week to 11 counts of antitrust, fraud and tax evasion in U.S. District Court in Manhattan as part of a plea agreement. Prosecutors from the Justice Department's antitrust division, which worked with the Internal Revenue Service's criminal investigation unit, recommended he receive a prison sentence between 63 and 78 months. Sentencing is scheduled for July 10. Rebecca Meiklejohn, U.S. attorney for the Southern District of New York, said Mr. Mosallem received from 1996 to 1999 unreported income from kickbacks totaling $1.3 million. AdAge.com QwikFIND aao58g
Wall Street analysts happy with Yahoo!
Yahoo! shares perked up after the company posted a strong quarterly report, beating analysts' estimates by 2¢. The company posted $46.7 million in net income for the first quarter, up from a loss of $53.6 million a year ago; after factoring out $64.1 million in charges due to accounting changes, net income would have totaled $10.5 million in 2002. Revenues grew 47%, to $282.9 million, from $192.7 million in 2002. The results validate the strategy to decrease its reliance on ad revenue by launching premium services including personals, job listings and e-mail management. Revenues from premium services grew 61% and listings revenues grew 89% for the quarter, driven mainly by the Feb. 2002 acquisition of employment site HotJobs. While some analysts balked at the company's stock price, saying it is overpriced, Yahoo! hit a two-year high last week of $25.25.
BellSouth plan has the answers
Bellsouth, Atlanta, touts a new bundled services package-unlimited local and long distance, wireless and Internet service-all on one bill in the "Half-Town" campaign. The effort promotes the BellSouth Answers plan and suggests that customers shouldn't have to settle for half of the services they need. The TV, print, direct mail and radio push, created by Grey Worldwide, Atlanta and New York, targets consumers and small businesses in nine southern states. Two TV spots break on April 16. Print ads break on April 21 in local newspapers and regional editions of Gannett Co.'s USA Today. BellSouth spent $134 million in measured media in the U.S. in 2002, according to Taylor Nelson Sofres' CMR.
Jim Beam's CMO leaves
The senior global marketing executive for spirits maker Fortune Brands resigned after just 14 months to take the chief marketing officer's post at Hershey Foods Corp. Thomas K. Hernquist joins Hershey on April 28. Mr. Hernquist was leading a hotly contested agency review for Fortune's $19 million Jim Beam portfolio. A spokeswoman said the company is delaying its review finals until July as it considers internal and external candidates. The company advanced five agencies to the final round for a July decision. Contenders are WPP's Y&R Advertising, Chicago, the incumbent; Omnicom's BBDO Worldwide and Element 79 Partners, both Chicago; Interpublic's Carmichael Lynch, Minneapolis; and Publicis' Fallon Worldwide, Minneapolis. AdAge.com QwikFIND aao58r
Fitch:Worldwide buys out Cordiant
Executives at Fitch:Worldwide, Ann Arbor, Mich., bought the assets of the ad agency from London-based conglomerate Cordiant Communications Group and have taken the business private, Crain's Detroit Business reported. The agency is now called re:group. President-CEO Janet Muhleman said that after several years of ownership and management changes at Fitch, it made sense to buy back the local business. "We didn't really fit where they wanted to go," she said. Ms. Muhleman is the majority owner, while a handful of other senior staff members have a stake in the agency as well, she said. The terms of the deal were not disclosed. AdAge.com QwikFIND aao58y
Media buying for Gap up for grabs
Gap inc., hoping to "make sure we're getting the best value," is talking with four media agencies in the review for its U.S. TV media buying account for its three chains, Gap, Old Navy and Banana Republic, said company spokeswoman Rebecca Weill. They are incumbent Omnicom's PHD/Corinthian; Publicis Groupe's Starcom; Grey Worldwide's MediaCom and Havas' MediaPlanning Group. Gap, which reported 2002 advertising expenditures as $495 million, has had several marketing changes under new President-CEO Paul Pressler, including a brand segmentation study about to be concluded by Publicis Groupe's Leo Burnett, Chicago. The media review is expected to be completed in May. AdAge.com QwikFIND aao58k
Sony Corp. is in final negotiations with independent Wieden & Kennedy, London, for the estimated $50 million global account for its new youth-oriented Aiwa division, the company said. Other contenders in the global pitch included Team Omnicom, Strawberry Frog and Publicis Groupe's Fallon Worldwide, New York. Sony is about to launch a second review for Aiwa U.S. co-op advertising.