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In this era of the big agency holding companies, Saatchi & Saatchi and Cordiant Communications Group, the former sibling agencies of the house that Charles & Maurice Saatchi built, are celebrating their first anniversary of life apart. And life has been good, though challenges are lurking over the horizon.

In their first year of independent operations, each reported this month that new-business billings and net profits were up over the year-earlier period. It's a nice comeuppance for those who predicted one or both companies would have to acquire or be acquired-and soon-if they were to have much of a future.

Despite uneven world economic conditions, Saatchi and Cordiant are riding the same wave of continued advertiser confidence that has swollen the account ledgers at the giants of the agency business-Omnicom Group, Interpublic Group of Cos. and WPP Group. The stocks of all five companies were trading at or near their 52-week highs last week as the Dow Jones Industrial Average flirted with the symbolic 10,000 level.

It's hard to think of agencies the size of Saatchi & Saatchi and Cordiant's Bates Worldwide as "mid-sized," yet their initial success augurs well for those companies unlikely to challenge the Omnicom-IPG-WPP trio in the race to be "the biggest." One year does not make a success story, of course. The truer test ahead for Saatchi and Cordiant will be how they fare if and when economies slow