Hits AND NOW FOR SOMETHING COMPLETELY DIFFERENT: THE EIGHT SMARTEST BUSINESS MOVES OF 2003.
By Michael V. Copeland and Owen Thomas

(Business 2.0) – [HIT] Supersize earnings. By early 2003, McDonald's stock had fallen to an eight-year low of $12. Then, in April, CEO Jim Cantalupo announced his turnaround plan, which included new menu items like "premium" salads and a renewed focus on the basics--improving training, simplifying menus, keeping restaurants clean. In October, U.S. same-store sales leapt 15 percent, the best showing in five years. The stock is up 79 percent since Cantalupo unveiled his makeover.

[HIT] Cadillac in the pink. To woo younger buyers, Cadillac ditched golf and yachting sponsorships in favor of tie-ins with Hollywood films like Bad Boys II and The Matrix: Reloaded. The move helped the new XLR sports car to sell out at dealerships and boosted sales by 43 percent in November. By year's end, the brand was on track to sell 200,000 units--a level not seen since 1994.

[HIT] Put your money where Larry's mouth is. After Larry Ellison launched his bid for PeopleSoft and announced plans to kill off its product line, PeopleSoft countered by offering customers up to five times their money back if any future acquirer discontinued support for products they'd bought. Wall Street approved, sending the company's stock up 34 percent. For the coup de grâce, PeopleSoft's board authorized a stock buyback in September, paying $21.19 per share--almost $2 higher than Oracle's best offer.

[HIT] Music wants to be ... 99 cents? Few analysts expected Apple's iTunes Music Store to have much impact on the bottom line. Then it sold a million songs within a week of its April launch. In October, when Apple opened the service to Windows users, weekly sales zoomed to 1.5 million songs. Analysts now believe iTunes will boost Apple's profits by $100 million a year--not from downloads, but from the accompanying bump in iPod sales.

[HIT] Speed kills (the competition). Cut-rate Internet service provider United Online has been gaining ground in the dial-up market, adding 2.7 million users in the last three years. Still, the specter of broadband looms. In April, United met the threat head-on with its "dial-up accelerator" software, which allows customers to surf the Web at near-DSL speeds for about half the price. More than 400,000 customers signed up in six months, boosting United's margins by 72 percent.

[HIT] Scoring big with the major metros. In July, Bravo debuted Queer Eye for the Straight Guy. The low-budget show smashed records for cable viewership, propelled the previously sleepy channel to No. 1 on cable, and even helped it beat CBS in certain key demographics. To top it off, the show won over another vital audience: Cable systems that hadn't previously carried Bravo added it to their lineups, boosting the channel's reach 10 percent to 75 million households.

[HIT] Why it pays to play hard to get. Yes, we promised you the smartest moves of 2003. But we're adding Google to the list for not making a move--namely, for its decision to delay an IPO until 2004. Every time Google has coyly denied that it's about to go public, estimates of its value have risen; these days Silicon Valley's favorite pastime is to debate whether Google will be valued at $5 billion or $25 billion. Whatever the eventual number, Google has done a masterful job of whipping potential investors into a frenzy, setting the stage for a big payday in 2004.

[HIT] Nothing but net. When Nike signed LeBron James to a seven-year, $90 million endorsement deal in May, the company was taking a flier. James, after all, was coming to the NBA straight from high school. By December, however, the move looked like genius: The 19-year-old phenom led all rookies in scoring and was packing arenas nationwide. His replica No. 23 jersey is already the NBA's best-seller, and retailers expect Nike's new $110 LeBron-model sneakers to be its hottest launch since the Air Jordan in 1985.