The Week

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New AOL chief to mend ad fences

With Jonathan Miller installed as chairman-CEO of America Online, the AOL Time Warner Internet unit is expected to focus on deepening its relationships with subscribers, repairing relations with advertisers and introducing services under a retooled business model. Mr. Miller, a former USA Interactive executive who has also held executive positions at Viacom's Nickelodeon and the National Basketball Association, was tapped last week to run the troubled unit. He likened the direct relationship AOL needs to have with its subscribers to the sponsorship model in the sports world. "The sponsorship model that exists in the sports world is relevant [to Internet media], you have an identification with properties. That kind of relationship, for an advertiser, is much more meaningful," Mr. Miller said. "Advertising on the Internet is still very much in its infancy and you have to articulate the value proposition to marketers," he added. QwikFIND aan86c

BMW taps next wave of directors

Bmw of North America will launch the second wave of its acclaimed online short-film series, "The Hire," in October. The automaker named the directors of its next three films: John Woo ("Windtalkers," "Mission Impossible II"); Tony Scott ("Top Gun"); and Joe Carnahan ("Narc"). All three films will center on the driver character, again played by British actor Clive Owen. One of the stars of the films is the BMW M5. The first series, estimated to have cost $15 million, started in April 2001 with five high-profile directors' short films. It was heralded as one of the year's most innovative ad ideas. BMW's agency, Publicis Groupe's Fallon Worldwide, Minneapolis, hatched the idea. QwikFIND aan85s

European snafu delays IPG earnings

Interpublic group of cos. expects to release second-quarter financial results Aug. 13-a week late. The agency company Aug. 5 said it postponed its Aug. 6 earnings announcement "to accommodate the audit committee of its board of directors" by giving the committee another week to review results. The stock crashed 24% on the news. Initially, it appeared management was caught off guard by committee members' move for the extended review. The stock at midweek regained ground (see The AdMarket, P. 8) after an alternative explanation circulated: that management learned at the 11th hour of a European accounting issue and recommended results be delayed a week to give management time to resolve the issue. That issue was said to involve transactions in select European offices that were not properly reconciled, such as a failure to recognize some receivables as distressed or uncollectible. An Interpublic spokesman declined to comment; audit-committee members declined to comment or didn't return calls. Analysts, meanwhile, are bracing for continued depressed operating results when Interpublic announces its financials. QwikFIND aan85r

Nestle pockets Chef America

Nestle is on an acquisition binge that is not expected to stop. The world's largest food company agreed to acquire Hot Pockets-maker Chef America for $2.6 billion in cash to add to its frozen food roster, which already includes Stouffer's and Lean Cuisine brands. The move follows a string of other deals waged to buoy Nestle's foothold in various food categories, such as the 2000 acquisition of Power Bar, last year's buy of Ralston Purina and the recently announced deal for Dreyer's Grand Ice Cream. According to Credit Suisse First Boston analyst Dave Nelson, the Chef America acquisition-expected to garner $720 million in sales this year-doesn't necessarily hinder Nestle's ability to go after the purchase of Hershey Foods and/or Pfizer's Adams, both currently on the block. QwikFIND aan85v

FTC and Microsoft settle over Passport

Privacy advocates are calling "extraordinary" the Federal Trade Commission's decision to take Microsoft to task for privacy issues surrounding its Passport service. Microsoft maintains it always wanted to raise the bar on privacy and its settlement of FTC issues does that. The FTC charged that Microsoft deceptively promoted its Passport service and related sites as being more secure and a better tool for parents concerned about privacy. The FTC also said Microsoft didn't employ enough "reasonable and appropriate" measures to ensure that its promises of security would be met, a charge that could impact other marketers. QwikFIND aan86z


Financially stressed tech publisher Ziff Davis Media last week said bondholders representing 95.1% of the debt it has been trying to restructure have "formally accepted" the terms of the company's restructuring plan. This brings the company to over the 95% hurdle it needed to clear to restructure the debt without a trip to a court for a "prepackaged" Chapter 11 bankruptcy plan. A Ziff Davis spokeswoman, though, said "the full process" had yet to be completed, and the company announced another deadline extension to its restructuring offer. QwikFIND aan86k ... The FTC announced settlements with Philips Electronic North America and with the president of now bankrupt Okie, with both accused of illegally delaying rebate checks for computer products for up to six months. Philips said the delay was due to problems switching fulfillment houses, but it settled charges that the delay was both deceptive and unfair. ...Hershey Foods realigned its agency assignments, awarding Ice Breakers to North Castle Partners, Stamford, Conn. WPP Group's Ogilvy & Mather gains Reese's FastBreak, formerly handled by Omnicom Group's DDB Worldwide, and DDB gains responsibility for Hershey's chocolate bars, Hershey's Miniatures and Hershey's Nuggets, formerly handled by Ogilvy. QwikFIND aan86y

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