Hits & Misses
(Business 2.0) – [HIT] Truth in advertising. Most tourist destinations have been hit by the double whammy of recession and security fears. But not Las Vegas, thanks in part to a $60 million ad campaign that makes hay of its anything-goes reputation. The bawdy "What happens here, stays here" spots have attained pop-culture status with references on The Tonight Show and Saturday Night Live. What really seems to be staying in Vegas is money: Convention attendance rose 11 percent in 2003, and the resulting revenues--independent of gambling and other don't-tell-the-spouse activities--rose 10 percent to $6.5 billion.
[MISS] Careful what you pay for. To prove that its cholesterol drug Pravachol is as effective as Pfizer's Lipitor, Bristol Myers-Squibb funded a two-year study that ended up proving the opposite: Lipitor, in fact, was more effective at preventing heart attacks. After the results were published in March, a survey showed patients' intent to request Lipitor from their doctors jumped 37 percent.
[MISS] There's a wrong way to take a company public ... It was the Teutonic equivalent of Google's hotly anticipated IPO. When X-Fab Semiconductor filed to become the first German firm to go public since 2002, pundits said it would jump-start the country's moribund stock market. The only hitch was X-Fab itself. The first sign of trouble came when one of the deal's underwriters pulled out in a dispute over the initial share price. Then the not-yet-profitable company missed a deadline to provide investors with its prospectus. On March 17, the offering was shelved.
[HIT] ... and a right way. Meanwhile, the real Google of Europe turned out to be in Norway, where Opera Software executed a successful IPO on March 11. Opera, whose browser is installed on 4 million wireless devices worldwide, had been positioning itself to go public since 2000, but wisely held out until market conditions improved. The wait was worth it: Opera executives could point to a modest profit of $215,000 in 2003 and a sizzling market for mobile browsers. The $17.7 million offering was 20 times oversubscribed, with most of the action coming from foreign investors.
[HIT] Have you driven a Prius clone lately? First Toyota displaced Ford as the world's No. 2 carmaker. Now Ford has conceded its rival's tech lead as well. In advance of its launch of a gas-electric Escape SUV, Ford licensed 20 of Toyota's hybrid-car patents. Ford says it merely wants to avoid litigation, but the deal is nevertheless a coup for Toyota, which spent about $1 billion to develop the technology. Now it hopes to sell it to other carmakers: Nissan, for one, has already licensed Toyota's technology for a hybrid Altima.
[MISS] Don't go where you ought to, Mr. Roboto. If this was a glimpse of the future, watch out for shrapnel. The Pentagon-sponsored Grand Challenge, a robot race through the Mojave Desert, flamed out when none of the 15 contestants was able to get within 134 miles of the finish line. The race stemmed from a congressional mandate that a third of all government vehicles be self-driving by 2015. The "winner," a $3 million converted Hummer created by a team from Carnegie Mellon University, made it just 7 miles before hitting a rock and scorching two of its tires.
[HIT] Added bonus: A hot lead on a new insurance customer. That Metlife flipped the Sears Tower for a $90 million profit after owning it less than a year was impressive enough. More surprising was who it reportedly got to buy the 110-story building, often cited as a prime terrorist target: a group of New York real-estate bigwigs who'd been major investors in the World Trade Center. Ironically, they might not have had much choice. The move was likely an attempt to defer taxes on money recouped from the WTC by sinking it into a similar property--a maneuver known as a 1031 exchange.