101 Dumbest Moments in Business
Notorious former mental institutions being converted into high-end condos. Candy bars with curious names. And more stupidity. See our list of the year's most boneheaded blunders.
(Business 2.0) - GRAND PRIZE WINNER, DUMBEST MOMENT OF 2005
1 Bubble Trouble
"If you grew up in Danvers, and you remember it as the spooky place on the hill, it might not be the right place to live."
-- William McLaughlin, an executive with AvalonBay Communities, which is converting boarded-up Massachusetts mental institution Danvers State Hospital into a 497-unit complex of high-end apartments and condos. That sound you hear? Not the ghosts of mental patients, but loud hissing from the wildly inflated housing bubble, which tops our list this year with seven priceless moments of real estate insanity. First up: the nuthouse-to-yuppie-house trend currently sweeping North America, with such conversions also planned in Detroit, New York, Vancouver, and Columbia, S.C., where the centerpiece of the development is an original brick building with the word "asylum" chiseled into the facade.
2 Investment bank error in your favor. Collect an additional $1.43 billion.
The judge in billionaire Ronald Perelman's lawsuit against Morgan Stanley, exasperated by the latter's delays in handing over documents, instructs jurors to assume that the firm committed fraud. The bank insists it isn't stonewalling, just running into technology glitches. The jury awards Perelman--who had sued Morgan over its role in his sale of Coleman to Sunbeam for stock that became worthless after an accounting scandal led to bankruptcy--$1.45 billion in damages. Perelman had reportedly offered to settle for $20 million.
3 On the bright side, seeing-eye dogs are total chick magnets.
In May the FDA says it's received 40 reports of sudden blindness in men taking the impotence drugs Cialis, Levitra, and Viagra. Within six months, combined sales of the drugs plunge more than 10 percent from the previous year's levels.
4 Bollocks the yellow moons and green clovers. Get yer fat arse down and be givin' me 50 push-ups, boyo.
Amid a rising tide of child obesity, General Mills launches a campaign that touts the health benefits of not skipping breakfast--and opting for such famously healthy foods as Cocoa Puffs and Count Chocula. The company even enlists the Lucky Charms leprechaun, who normally sells "frosted oats and colored marshmallows," as part of a new "fitness squad" to explain how breakfast builds muscles and attention spans.
5 So that's why they call it a CrackBerry.
A study by the University of London's Institute of Psychiatry, commissioned by Hewlett-Packard, finds that "an average worker's functioning IQ falls 10 points when distracted by ringing telephones and incoming e-mails ... more than double the four-point drop seen following studies on the impact of smoking marijuana."
6 Pity. We already lined up Ike Turner to judge next year's event.
Radio station WQHT Hot 97 in New York City runs afoul of New York attorney general Eliot Spitzer with its "Smackfest" promotion, in which young female listeners are pitted against each other in a violent face-slapping contest to win concert tickets and cash prizes. Station owner Emmis Communications agrees to a settlement of $240,000, with $60,000 of the amount going to a local group promoting awareness of domestic violence.
7 C'mon, it's called Black Apron. Isn't that enough?
"The message conveyed how proud we are of this new coffee, but did not address our deep sadness and concern for the tremendous loss of life and devastation in the recent natural disaster in Southeast Asia."
-- From an e-mail sent to Starbucks customers in January, apologizing for a previous e-mail that touted its new Black Apron Exclusives Aged Sumatra Lot 523 coffee, released days after a tsunami killed tens of thousands on the Indonesian island.
8 Here's to you, Mr. Insult-Your-Customers Marketing Guy.
In January a new installment of Anheuser-Busch's "Real Men of Genius" ad campaign celebrates "Mr. Discount-Airline-Pilot Guy" for putting "the fly in fly-by-night." When the ad comes to the attention of executives at low-fare carrier AirTran Airways, director of marketing Tad Hutcheson calls the brewer to complain and is put on hold--where he hears not Muzak but a loop containing the offending ad. AirTran threatens to yank Budweiser from the airline's galleys.
9 After stealing $50 million, what's a few papers between friends?
Facing charges alleging that he looted his company of tens of millions of dollars, disgraced ex-CEO Conrad Black returns to Hollinger headquarters in Toronto and makes off with several cartons of files from his former office. A security camera captures the escapade on tape. Faced with a contempt-of-court charge, Black returns the files to Hollinger.
10 BUBBLE TROUBLE, PART 2
Three weeks later, Vail's Board of Realtors announces that it's moving back in with its mom.
Unable to buy office space in a community where the average home price recently headed north of $4 million, the Aspen Board of Realtors heads north too--to Basalt, Colo., a town of 3,000 residents 20 miles away.
11 To leave a message, press ... right ... there ... no, a little lower ... that's it ... ah-h-h-h-h.
In July, Gerald Martin, the founder of a physicians' answering service in Westchester County, N.Y., is charged with computer tampering after a competing service discovers that its system has been hacked. Patients trying to reach their doctors were instead greeted with busy signals or the sounds of sexual moaning.
12 You invited who over for a play date down in the basement?
Lionel, the largest U.S. manufacturer of model trains, settles a lawsuit with competitor K-Line in which Lionel alleged that K-Line had paid Lionel's chief engineer "to work surreptitiously ... and incorporate Lionel's current sound, speed control, and electrical transformers" into some K-Line products. Meanwhile, Lionel files for Chapter 11 while appealing a $40.8 million verdict won in 2004 by MTH Electric Trains--which claimed that Lionel and a subcontractor had stolen its trade secrets.
WINNER, DUMBEST MOMENT, DIGITAL RIGHTS MANAGEMENT
13 The furor dies down, but only after Sony says that the real intent was to prevent the spread of the malicious Celine Dion virus.
Sony BMG installs software on its CDs "to prevent unlimited copying and unauthorized redistribution," but the cure is worse than the disease: The software makes customers' PCs vulnerable to hackers and viruses. Software maker Internet Security Systems labels Sony's program malicious because it "actively attempts to hide its presence from users." Ultimately, Sony offers uninstall software and has to recall millions of albums, including The Invisible Invasion, by the Coral; Healthy in Paranoid Times, by Our Lady Peace; and On Ne Change Pas (One Does Not Change), by Celine Dion.
14 How 'bout you stop sending us those Celine Dion CDs?
"What do I have to do to get Audioslave on WKSS this week?!!? Whatever you can dream up, I can make it happen."
-- E-mail from an employee of Sony BMG's Epic label to a Hartford, Conn., radio station. In July the company pays a $10 million fine as part of a settlement in which it agrees to stop indirectly paying radio stations to play songs by its artists.
15 A perfectly good orgy of violence and mayhem, ruined.
In June a Dutch programmer releases software that lets players of Take-Two Interactive's Grand Theft Auto: San Andreas access sexually explicit content left in the game's source code by its developers. Already marked "Mature" for "blood and gore, intense violence, strong language, strong sexual content, and use of drugs," the game gets rerated "Adults Only," causing Target and Wal-Mart to pull it from stores. Take-Two's quarterly revenues fall $40 million short of projections.
16 It descends from the military-industrial complex. Not so ironically it unleashes grave embarrassment.
"We consider the ad offensive, regret its publication, and apologize to those who, like us, are dismayed with its contents."
-- Mary Foerster, spokeswoman for Boeing Integrated Defense Systems, about an ad in the Sept. 24 issue of National Journal that depicts the CV-22 Osprey in an assault on a mosque accompanied by copy that reads, "It descends from the heavens. Ironically it unleashes hell."
17 Say "cheesed."
Three and a half years after filing for Chapter 11, Polaroid is sold to Petters Group Worldwide for $426 million. Chairman Jacques Nasser and CEO J. Michael Pocock walk away with $12.8 million and $8.5 million, respectively. More than 4,000 retirees, meanwhile, receive one-time checks for $47 but lose their medical and life insurance benefits.
18 Perhaps they should change the motto to "Don't be stupid."
New Google employee Mark Jen adds a post to his blog in which he says he spent his first day in an HR presentation about "nothing in particular." Apparently, Jen snoozed through the company's strict disclosure rules. In a subsequent post, he reveals that the company expects unprecedented revenues and profit growth in 2005, projections that Google has yet to share with Wall Street. Jen soon receives another presentation from HR: a pink slip.
19 "Don't be stupid" keeps sounding better and better.
In July, Google informs CNET that it will prohibit company employees from talking to its reporters for a full year. Why the boycott? In an article about Google's privacy practices, CNET reporter Elinor Mills demonstrated the kind of personal information that can be found online by googling CEO Eric Schmidt, revealing his $1.5 billion net worth, details of his attendance at a $10,000-a-plate fund-raiser for Al Gore, and--gasp!--his passion for flying airplanes. In September, facing criticism for hypocrisy and overreaction, Schmidt cuts short the silent treatment and grants Mills an interview.
20 He's a perfect 10--a 1, plus 9 glasses of sparkling Lambrini!
Having barred alcohol marketing that associates drinking with sex, British regulators block an ad that shows women imbibing Lambrini sparkling wine while using a fishing pole to hook a hunky guy. The Advertising Standards Authority says the ad violates its guidelines because the guy "looks quite attractive and desirable to the girls." It would pass muster if only he were "overweight, middle-aged, balding, etc." The company then runs a version of the ad using a paunchy, chrome-domed model.
21 Sounds OK, so long as all the men are overweight, middle-aged, balding, etc.
Developers announce plans for the London Academy of Sex and Relationships, an $8.3 million sexual theme park. The project, a spokesperson says, is "committed to avoiding the sleazy image that the sex industry usually conjures .... Titillation is not the goal."
22 Ho, ho, ho, indeed.
During the run-up to Christmas, the North Shore Mall in Peabody, Mass., denies children access to Santa's lap unless their parents pony up $21 for a photo. Or at least that seems to be the rule until Maria Grigorian and her weeping child are turned away because the single mother can't afford to pay. After Grigorian tips off local TV reporters, the mall says it's always had a no-charge Santa policy and claims the incident was a simple misunderstanding.
23 New for 2006: gaunt, hollow-eyed Stalking You Bear.
In January the Vermont Teddy Bear Co. receives protests from the mental-health community over its Crazy for You Bear, a plush toy in a straitjacket that comes with commitment papers. The company agrees to discontinue the bear.
24 Damn those infernal computating hoochamagooches.
In November ex-MTV veejay Adam Curry logs on to Wikipedia and edits the entry about podcasting, playing up his role as an early pioneer and deleting mentions of other inventors. Caught by server logs that point to his involvement, Curry admits to the attempt but claims that--despite being smart enough to invent podcasting--he was befuddled by Wikipedia's interface and altered the entry by accident.
25 Who knew Adam Curry was such a potty-mouth?
Los Angeles Times opinion page editor Michael Kinsley introduces "wikitorials," inviting readers to log on and revise the newspaper's op-eds. "It may be a complete mess, but it's going to be interesting to try," Kinsley says. He's right. Readers contribute with abandon--and with profanity. The paper suspends the feature, and Kinsley resigns three months later.
26 And maybe the cops come three days later and find you stabbed to death on your kitchen floor.
"If there's a burglar in my home, maybe I send an e-mail or a text message to the police instead of making a call."
-- Skype co-founder Niklas Zennstrom, on his VOIP service's lack of 911 access.
27 Enron? Those guys were lame. We did the same thing, but it only took us two months.
In August, commodities brokerage Refco debuts on the New York Stock Exchange. Its stock rises 25 percent the first day. Nine weeks later, on Oct. 10, the company discloses that CEO Phillip Bennett had hidden $430 million in debt from its books. On Oct. 12, Bennett is arrested for securities fraud. On Oct. 13, trading in Refco is halted. On Oct. 17 the firm files for bankruptcy and starts selling off assets.
28 For speed, Refco's got you beat. But in terms of creativity ...
In September, two months after Connecticut-based hedge-fund firm Bayou Management closed its doors but assured investors that their money would be returned, founder Sam Israel III and CFO Daniel Marino plead guilty to fraud and conspiracy charges. SEC investigators say Bayou had burned through $300 million of the $450 million it had taken in since its founding in 1996, had siphoned off tens of millions by funneling trades through its own securities firm, and had even set up a sham accountancy to issue fake audits attesting to its phony results. Israel and Marino each face up to 30 years in prison.
WINNER, DUMBEST MOMENT, PUBLIC RELATIONS
29 Men, on the other hand, have a charming self-destructive quality.
Speaking at an ad industry event in Toronto, WPP Group's worldwide creative director, Neil French, says there aren't more female creative directors "because they're crap" and they eventually "wimp out" and "go off and suckle something." French speaks from a stage decorated as a hunting lodge while being served drinks by a woman in a skimpy maid's outfit, of whom he asks, "Could you lean over a bit more?" Two weeks later WPP accepts French's resignation.
30 BUBBLE TROUBLE, PART 3
Better get your offer in quick--rumor has it, Kate Moss is very interested.
A house in the Shepherds Bush area of London measuring less than 10 feet across at its widest goes on the market for $933,000. Listing agent Winkworths describes the anorexic structure as "utterly amazing and almost certainly unique."
31 Next up: the caramel crown of thorns.
In March, Russell Stover unveils its new Easter candy: 6-inch chocolate crucifixes. The Roman Catholic diocese in Bridgeport, Conn., denounces the confection, saying that an edible version of the cross on which Jesus Christ died is not an appropriate Easter-basket mate for marshmallow chicks and chocolate bunnies.
32 From the best stuff on earth ... to a sewer on 17th Street.
Snapple abandons an attempt to erect the world's largest popsicle when the 24-foot-tall, 35,000-pound frozen treat begins melting as it's being hoisted upright in New York's Union Square Park. Snapple attempts its stunt on an 80-degree day in June; the record remains a 21-footer erected in more temperate Holland.
33 It'll be even clearer when the accents are from Bangalore.
Several McDonald's outlets in the Pacific Northwest begin outsourcing drive-through functions to remote call centers staffed by "professional order-takers" with "very strong communication skills." Says CEO Jim Skinner, "If you're in L.A. and you hear a person with a North Dakota accent taking your order, you'll know what we're up to."
WINNER, DUMBEST MOMENT, ADVERTISING
34 Bummer. But we're still going ahead with the "Schindler's Shopping List" campaign, right?
Fighting a proposal that would limit superstores in Flagstaff, Ariz., Wal-Mart signs off on an ad in the Arizona Daily Sun that asks, "Should we let government tell us what we can read? Of course not ... So why should we allow local government to limit where we shop?" The ad is illustrated with a vintage photo of Nazi supporters throwing books into a bonfire. Wal-Mart later apologizes, saying it had not appreciated the photo's "historical context."
35 Meanwhile, in other news about Wal-Mart and Germans ...
In November, Wal-Mart loses an appeal of a ruling that its attempts to prohibit workplace romances among its 10,500 employees in Germany conflict with the country's laws. Wal-Mart had tried to introduce a 28-page ethical code that reportedly banned "lustful glances and ambiguous jokes" as well as "sexually meaningful communication of any type."`
36 We know why you fly ... JetBlue.
The winner of the American Airlines "We Know Why You Fly" contest, which promised to award 24 round-trip tickets to the traveler who submitted the best video about his airborne experiences, turns down the grand prize. Why? Because American fails to cover the winner's federal, state, and local income taxes, which amount to about $19,000, or $800 per ticket.
37 A miracle? That's not for us to say. But after the drapes caught fire, our house did keep burning for eight straight days.
In September, Continental Creations of New Bedford, Mass., recalls a line of $20 dog- and cat-festooned menorahs on which "the cups holding the candles could ignite, posing a fire hazard."
38 Jeez, it's just a little beeping noise. Don't go having a heart attack.
In June, Guidant recalls 50,000 heart defibrillators--about 38,600 of them already implanted in people's chests--that might, in rare cases, short-circuit when they're supposed to deliver vital electrical jolts. The recall comes after the devices were reported to have failed at least 45 times, including two instances in which the patients died. Guidant fixed the flaw in devices made after mid-2002 but neglected to inform doctors and continued to sell units produced before the fix. The recall advises patients that, should the device malfunction, it will emit a beeping noise, at which point they should contact their doctors or head to an emergency room.
39 That may be, but you don't have to rub it in.
"Jessica recognizes that she has a very broad fan base."
-- A spokesperson for Jessica Simpson, explaining the size-2 entertainer's introduction of a plus-size line of jeans in August.
40 Just google him. We hear it really ticks him off.
"F---ing Eric Schmidt is a f---ing pussy. I'm going to f---ing bury that guy, I have done it before and I will do it again. I'm going to f---ing kill Google."
-- Microsoft CEO Steve Ballmer, in response to the departure of Mark Lucovsky, a former Microsoft "distinguished engineer" who left last year to work at Google. The alleged aria, punctuated by the tossing of a chair, was cited in a sworn statement by Lucovsky that became public during court hearings over another Microsoft-to-Google defection in September. Microsoft denies Lucovsky's version of the incident.
41 If that's what you mean by f---ing killing someone, would you mind f---ing killing us next?
In February, Microsoft unveils a new version of MSN search, developed at a cost of $100 million, in an attempt to take market share from Google. MSN's share of Internet search traffic promptly drops by a full percentage point.
42 Nice job with that pirated DVD bonfire, Tenderfoot.
In May the Scout Association of Hong Kong launches the first merit badge program "focused on respect for and protection of intellectual property rights."
43 Good news, kids: You can flunk out of kindergarten and still grow up to become the CEO of a major tech company!
"We're grabbing that word and saying, of anybody, we own the word 'share.'"
-- Sun Microsystems CEO Scott McNealy, discussing his company's open-source strategy.
44 She went on to deny any involvement on the part of Neil French.
In July, Burger King launches an ad campaign for its new Chicken Fries featuring a faux heavy-metal band called CoqRoq. Coqroq.com initially features photos of female fans captioned "Groupies love the Coq." After the captions are removed, Burger King spokeswoman Edna Johnson tells Advertising Age that they were written and assigned randomly by computer software that has since been disabled.
WINNER, DUMBEST MOMENT, SECURITY
45 May I see my ID?
In February, ChoicePoint--the self-proclaimed "leading provider of identification and credential verification services"--admits that it sold the personal data of 145,000 people to a number of unauthorized recipients, including an identity-theft ring in Los Angeles. ChoicePoint thoughtfully offers the victims a free credit report--but still makes them pay to see the detailed information that was provided to the criminals. The incident kicks up an identity-theft furor serious enough to draw congressional hearings; the company later reports the incident cost it $21 million.
46 No, no. I said, "May I see my ID?"
New Jersey payroll services provider Automatic Data Processing sends postcards to more than 1,000 employees of Adecco Employment Services, a global human resources firm, printed with the employees' Social Security numbers and instructions for accessing their benefits information online.
47 Mmmm. Can't wait to belly up to the all-you-can-eat gruel buffet.
Developers in Chatham, England, announce plans for Dickens World, a $100 million theme park based on the life and times of Charles Dickens.
48 There's no exhaust pipe, but a rear-facing aromatherapy emitter now comes standard.
A carmakers' lobbying group runs an ad featuring a photo of a child in a car seat with copy that states, "Autos manufactured today are virtually emission-free." When called on the claim, the Alliance of Automobile Manufacturers says the ad refers to emissions classified as pollutants by the EPA, not greenhouse-gas emissions, which have risen more than 13 percent since 1990. The Union of Concerned Scientists counters with an ad that shows a buckled-in baby holding a cigarette and the headline: "If today's cars are 'virtually emission-free' ... then so is this cigarette."
49 BUBBLE TROUBLE, PART 4
The air we breathe is free? Says who?
In November, New York developers William and Arthur Zeckendorf agree to pay $37 million for the air rights above a church and an 88-year-old private club. The Zeckendorfs' purchase, part of a plan to build a 35-story apartment building that would tower over its neighbors on East 60th Street, comes out to a whopping $430 per square foot--two to four times the going rate for the skies above Manhattan.
50 Got a yen for J-Com shares?
In December, job recruiter J-Com's IPO in Tokyo goes awry when a trader for Mizuho Securities types in an order to sell 610,000 shares at 1 yen (less than a penny) per share instead of the intended 1 share at 610,000 yen (about $5,000). Though the order is for 41 times the number of outstanding shares, the Tokyo Stock Exchange insists that the order be processed as entered. Mizuho loses at least 27 billion yen ($225 million) on the typo, an amount nearly equal to its entire profit for the prior fiscal year.
51 How much extra does it cost to have the tele-marketers join our loved ones in the great beyond?
The Direct Marketing Association rolls out a Deceased Do-Not-Contact list to stop calls to dead relatives. The fee for preventing tele-marketers from reaching to the grave: $1 per person.
52 And how much to have the record labels not sue them?
In January, members of the Recording Industry Association of America sue Gertrude Walton, a Mount Hope, W.V., resident who had died nearly two months earlier. The lawsuit, Walton's daughter says, comes despite her having sent copies of the death certificate to the labels' lawyers.
In May, Infinity Broadcasting switches San Francisco radio station KYCY to an all-podcast format promoted as "KYOU Radio." Among the programming highlights: "My Daily Commute" (a guy mulling his mortality while driving to work), "Rock and Roll Jew Show" (the latest hits from Israel), and "The Worst Music You've Ever Heard" ('nuff said). Meanwhile, KYCY shows it's still fuzzy on the difference between podcasting and merely turning one's station over to amateurs: The "podcasts" are to be broadcast over the airwaves but are not made available for downloading.
54 Our new orange-glazed chicken is absolutely heavenly.
"It is difficult to conceive what consulting services a deceased individual might provide to Tyson."
-- From a lawsuit by Amalgamated Bank against Tyson Foods board members for breach of fiduciary duties. Among other complaints, the suit alleges the company has promised to pay consulting fees of $800,000 a year to retired CEO Don Tyson--and to keep paying the money to his survivors after he dies.
55 Thanks. Oh, wait, one last thing. Would you mind wearing these Mickey Mouse ears?
During its first week of operation in September, Hong Kong Disneyland finds itself coping not only with food-poisoning accusations but also with indignant city hygiene officers, who were ordered by park employees to remove their caps and epaulets before entering the park to investigate.
56 If all else fails, he can always find work as an inspector of Disneylands.
A Qantas Airways baggage handler is suspended after he's caught opening a passenger's luggage, discovering a camel costume, donning the head, and driving around the tarmac on a baggage cart at Sydney Airport. The incident is reported by the costume's owner, who spies the culprit through the window of the terminal.
57 Grand theft Nano.
In April the NYPD reports that, after a decade of steady declines, subway crime jumped 18 percent in the first quarter of 2005. The culprit? None other than Steve Jobs. According to the department's statistics, more than a third of the rise in felonies came as the result of iPods being swiped or stolen with the threat of violence.
58 Book burning? Next time try a memory-card burning instead.
In March a Minneapolis-area Wal-Mart sells customer Tina Ellison a digital camera. After she takes it home, her children begin playing with it and discover that the camera comes with free content--a video of a man violating himself, recorded on the supposedly new camera's memory card. The store replaces her camera and offers to provide her children with counseling.
59 He tried the want ads first, of course, but the job market for fashion gods just ain't what it used to be.
"If I can help people focus on preparedness ... then I hope I can help the country in some way."
-- Former FEMA director Michael Brown, just two months after he resigned in the wake of his agency's failed response to Hurricane Katrina, announcing plans to start his own disaster-preparedness consulting firm.
60 The Gambinos then suspend operations in the state, citing the rising cost of workers' comp.
In November a Virginia state appeals court rules that minor-league hockey player Ty A. Jones, who injured his shoulder in an on-ice fight, is entitled to workers' compensation. The court upholds an earlier ruling that Jones's injury arose as part of his employment as an "enforcer" for the Norfolk Admirals.
61 Farting shoes? What's not to like?
Florida-based Goosebumps Products, a maker of gel-filled shoe inserts, sues supplier Bell Chem Corp., claiming that, by delivering the wrong chemical, it had caused bubbles to form in the insoles that emit "a flatulence-like noise" with each step. Goosebumps is forced to dispose of at least 35,000 pairs and soon goes out of business.
62 "Can you hear us now? We're sor--"
Vodafone in New Zealand apologizes for cleaning out the prepaid accounts of customers who accessed its "absolutely free" service offering games, ringtones, and other downloads. The company declines to reveal how many customers were affected or how much money was involved in its hastily arranged reimbursement program.
63 "The Other White Meat Queen" probably wouldn't fit on the sash.
The Iowa Pork Producers Association announces that it may retire a contest used to promote its product--due to the lack of interest among young Iowa women in being designated "Pork Queen." These days, surprisingly, only a handful of hopefuls enter the porcine pageant, which started back in 1960.
WINNER, DUMBEST MOMENT, OUTSOURCING
64 Told you we shouldn't have rented that list from the Department of Homeland Security.
Blaming a mailing-list vendor for providing bad information, JPMorgan Chase apologizes for sending a form letter about its credit card services to an Arab American man in California addressed to "Palestinian Bomber."
65 Don't be so hard on yourself. There's the demise of mom-and-pop coffeehouses, the poverty and despair among Third World growers ...
"Every time I reach a Starbucks, I feel like I've accomplished something, when actually I have accomplished nothing."
-- Winter (yes, just Winter), a Houston man who, since 1997, has been on a quest to buy a something-ccino at each of the world's 6,000 corporately owned Starbucks.
66 No late fees. Honest. Sort of.
In January, Blockbuster kicks off a "no late fees" policy. The catch? If customers keep their movies more than a week past the due date, their credit cards are charged for the full purchase price; when they return the items, their refund comes minus a "restocking fee." By March the company settles with 47 states for $630,000 and agrees to pay refunds to consumers who felt misled.
67 BUBBLE TROUBLE, PART 5
Can't keep up with the Joneses? Heck, it's bad enough just trying to keep up with the appreciation on their dilapidated Victorians.
In March the median price of a single-family detached home in the San Francisco Bay Area rises more than $1,000 per day. By month's end, it swells to $106,000 above the previous year's median--43 percent more than the area's estimated average household income of about $74,000.
68 The pen is mightier than the sword.
Boeing CEO Harry Stonecipher, brought out of retirement to restore the company's image in the wake of ethical lapses by predecessor Phil Condit--including allegations of affairs with female employees--is forced to resign for having an affair with a female employee. Though the relationship was consensual, Boeing's board determined that Stonecipher had violated the company's code of conduct--a document that all 160,000 Boeing employees have been required to sign annually since it was put into place by Stonecipher in 2003.
WINNER, DUMBEST MOMENT, ACCOUNTING
69 The irony is rich. Shareholders, alas, are not.
In June, H&R Block announces a review of its recent financial statements, estimating it will find discrepancies in its favor of about $19 million. Two months later it reveals that the review found $77 million in errors--in the other direction. The company explains that it had "insufficient resources" to identify and report complex transactions in its corporate tax accounting.
70 Good mourning.
"They should be a bit subdued, but still elegant."
-- Staffan Preutz, CEO of Swedish eyewear maker Polaris Optic, on his company's launch of a new collection designed for women attending funerals.
71 Phantom menace.
In October the board of Infinium Labs reveals that chairman Timothy Roberts is under investigation by the SEC for allegedly sending junk faxes touting penny stocks--including shares of Infinium, maker of the little-known Phantom game console. The board also announces that financial reports prepared by Roberts, the company's CEO before he resigned in August, should not be relied on. A month later the company's new CEO, Kevin Bachus, also resigns. The board--which still includes Roberts--manages to tempt consultant Greg Koler into the CEO hot seat with the tantalizing prize of 4 million shares of Infinium stock, currently worth $68,000.
72 How you know your city has an image problem: A) It's being mocked by Sacramento ...
Prior to their home opener against the Pistons, as Detroit's starting lineup is being introduced, the NBA's Sacramento Kings flash images from the Motor City on the scoreboard: abandoned buildings, burned-out cars, piles of rubble, etc. Three days later, the Kings' owners take out a full-page ad in the Detroit Free Press acknowledging "the incredibly positive impact the Motor City has made over the course of our country's history."
73 Oxymoron alert: Erotic City/Boise.
The proprietors of the Erotic City strip club in Boise, Idaho, attempt to circumvent a local law banning nudity except for performances of "serious artistic merit" by distributing sketch pads and pencils to customers for twice-weekly G-string-free "art" nights. Local police raid the club, issuing misdemeanor citations.
74 Neil French, meet Bernie Ecclestone.
"Women should be all dressed in white, like all other domestic appliances."
-- Formula One chief Bernie Ecclestone, on Danica Patrick's fourth-place finish at the Indy 500, the best showing ever by a woman in the race.
75 And the slots? It's just cherry-cherry-cherry all night long.
The Bluffs Run Casino in Council Bluffs, Iowa, fires Judith Roederer-Dillard for accidentally stocking a bill-changing machine with $100s instead of $20s. Happy gamblers play the machine for almost six hours, extracting about $46,000 in "winnings" before the casino shuts it down.
76 Our listeners--what a bunch of fools.
On April 1, radio station KBDS in Los Angeles pranks a contest winner who is expecting a new Hummer H2. Instead, Shannon Castillo receives a radio-controlled toy version of the H2. Castillo had hired a babysitter so she could go collect the prize, but when she sues the station, it's not for the child-care expenses--it's for the $60,000 value of an actual Hummer.
77 Our listeners--they're even more gullible than KBDS's!
On May 25, radio host D.J. Slick of WLTO in Lexington, Ky., runs an on-air contest to "win 100 grand." Norreasha Gill, the lucky 10th caller, tells her three children that winning $100,000 means the family's finally going to be able to afford a house with a backyard. The following day the station informs Gill that she actually won a Nestlé's 100 Grand candy bar. The irate Gill, after turning down a $5,000 settlement from the station, sues for the full prize.
78 But they only look like roadkill. It's the Velveeta Shells & Cheese that tastes like roadkill.
After complaints from animal-rights activists, Kraft Foods deletes an online animation for its Trolli Road Kill Gummi Candy that features animals amusingly caught in car headlights. The fruit-flavored Trolli candy, which comes in the shapes of squished snakes, squirrels, and chickens, is later discontinued.
WINNER, DUMBEST MOMENT, T & E
79 Let's see, that's 752 rum-and-Cokes, 363 orders of buffalo wings, 2,000 lap dances ...
In October, American Express sues Savvis CEO Robert McCormick for $241,000 in charges he racked up on a visit to New York strip club Scores. Savvis places McCormick on unpaid leave after he admits to the visit but claims that he charged less than $20,000. He later resigns, accepting more than $600,000 in severance but forfeiting almost $3 million in preferred stock.
80 Or even more if Bob McCormick shows up looking to party.
"For every 2 inches up there, it's another $50,000."
-- Sales consultant William Fried, speaking to eighth-graders on Career Day at a middle school in Palo Alto. Fried lists "stripper" and "exotic dancer" among potential occupations and reportedly tells students that the profession can garner them annual salaries of $250,000--a figure that can easily be augmented along with their bust size.
81 Here's mud in your digital eye.
British startup Sprayonmud begins selling genuine "Shropshire mud" in spray bottles, presumably for giving your SUV that rugged off-road look. Many British drivers find a better use for it, however--obscuring license plates to avoid being snagged by the many U.K. traffic cameras.
82 Go d thi g we h te A pha-B ts, anyw y.
Attempting to reformulate Alpha-Bits into a healthier cereal made with 75 percent whole grains and no sugar, Kraft Foods runs into "letter integrity" issues: The whole-oat flour yields an edible alphabet that's too chunky to read, while the elimination of the sugar coating causes the floating font to break apart more readily. Adding insult to injury, a dining reporter for the New York Times soon weighs in, saying the less-legible cereal "tastes like wet cardboard."
83 The guy is falling! The guy is falling!
In November, parents and children attending a showing of Chicken Little at AMC's Empire 25 in Manhattan instead get treated to Andrea, a Spanish film that opens with a young man hanging himself from a tree. Managers give audience members a refund or a coupon for a free movie.
84 And now, 15 words from our sponsors.
In July, Nascar holds an event at Colorado's Pikes Peak International Raceway. Its official name: ITT Industries, Systems Division, & Goulds Pump Salute to the Troops 250 presented by Dodge.
85 Don't worry. They'll make it back when they sell their J-Com shares.
The posh Lanesborough Hotel in London drops a zero from an online listing of its room rates, prompting a flood of reservations at 35 pounds per night. The hotel's damage-control effort initially consists of offering to rebook the rooms at full price; with the PR situation deteriorating, the Lanesborough strikes a compromise, agreeing to honor the cheap rate for a maximum of three nights.
86 CEO Wile E. Coyote declined comment.
In Connecticut, Acme Rent-a-Car installs GPS receivers in its vehicles to detect speeding customers, and then charges $150 to their credit cards for excessive wear and tear on vehicles. After an investigator pegs the actual wear-and-tear figure at about 37 cents per incident, the state Supreme Court orders Acme to cease and desist.
87 No interview, no cry.
On the heels of a popular documentary about the Queen rock anthem "Bohemian Rhapsody," BBC television decides its next subject will be the Bob Marley classic "No Woman, No Cry." An e-mail is duly dispatched to the Bob Marley Foundation, requesting an interview with the reggae star, since the documentary "would only work with some participation from Bob Marley himself." The e-mail also says producers would like for Marley to spend "one or two days with us" at his convenience: "Our schedule is flexible." Marley is less flexible. He died in 1981.
88 Lemon rinds are groovy, baby!
The BBC issues an on-air apology for a segment on Smart Spenders in which the host recommended rubbing lemon rinds on one's teeth as an alternative to expensive whitening treatments. The British Dental Health Foundation had informed the network that lemons, in fact, are harmful to tooth enamel.
89 White noise? Awesome. When are we playing Phoenix?
Yamaha of America recalls 1,100 S90 ES musical synthesizers, which retail for $2,600 each. The instruments can cause hearing loss by emitting a loud "white noise" when turned off and then on again under high temperature conditions.
90 BUBBLE TROUBLE, PART 6
See? Our plan to turn it into a bastion of American-style capitalism is working just fine.
"Before, in Iraq, the houses were cheap. Now the houses are expensive, but the lives are cheap."
-- A real estate agent in Baghdad, to Knight Ridder reporter Matthew Schofield, about the red-hot market in the Iraqi capital, where prices have soared as much as 1,000 percent in the past three years. The increases are fueled by foreign investment, pent-up demand after Saddam Hussein's strict property regulations, and even reinvested gains from looting.
91 If by "not giant" you actually mean "huge," then, OK, we'll buy it.
"The effect of Disney and Pixar guessing wrong on this was actually not giant."
-- Pixar CEO Steve Jobs, defending overly optimistic DVD sales forecasts. The animated-film studio sees second-quarter earnings drop 66 percent.
92 I'll take care of the beer and chips if you bring the Ritalin.
In September, DirecTV starts offering a "SuperFan" package that allows viewers to watch eight NFL games simultaneously on a single screen. In completely unrelated news, a study by Medco Health Solutions finds that use of prescription drugs to treat attention deficit hyperactivity disorder is rising faster among adults than kids. Spending on ADHD medication has quadrupled in four years to $3.1 billion annually.
WINNER, DUMBEST MOMENT, MARKETING
93 No joke here. Just suffice it to say that the literal translation of the Spanish word cajeta is "little box."
With the help of Latin pop sensation Thalia Sodi, Hershey introduces Cajeta Elegancita, a new candy bar for the Hispanic market. Though the wrapper features a picture of Sodi, apparently she neglects to fill her Yanqui partners in on a subtlety of Spanish: In Mexico, "cajeta" can be used to mean "nougat." Elsewhere in the Spanish-speaking world, however, it's slang for female anatomy.
94 Thus giving a whole new meaning to "crash-test dummies."
After a live demonstration of the radar-powered automatic braking system in Mercedes-Benz's new S-Class sedans turns into a nationally televised three-car pileup, the company claims that the steel walls of the safety center where the test took place interfered with the radar and confounded the system. An investigation by the Stern TV network, however, shows that the demonstration was staged (albeit poorly). Mercedes later admits it knew all along that the system would not work inside the safety center and had enlisted the vehicle's driver to "simulate" the experience.
95 That really smarts.
In its January/February issue, Business 2.0 honors OfficeMax in its first annual Smart List. Two weeks after the issue hits newsstands, OfficeMax announces the resignation of CEO Christopher Milliken amid an accounting scandal and says it will be forced to restate its 2004 results.
96 Which also explains why they use Sportscreme instead of Bengay.
"I know there are issues with homophobia in the NFL, but it never occurred to me the thing would come to this."
-- Louisiana State University drama professor Leigh Clemons, after attempting to buy a jersey personalized with the last name of former student and New England Patriots defensive back Randall Gay from NFL.com. Upon entering Gay's name in the requisite text box, the league's website informs her that the field should not contain a "naughty word."
WINNER, DUMBEST MOMENT, INVESTOR RELATIONS
97 We find your lack of faith disturbing.
Over the course of 2005, Overstock.com CEO Patrick Byrne issues increasingly shrill pronouncements about nefarious short-sellers driving the company's stock into the ground. After listening to an Overstock conference call with investors in August, Dallas Mavericks owner Mark Cuban posts to his blog a list of the topics Byrne covered: "Miscreants; an unnamed Sith Lord he hopes the feds will bury under a prison; gay bath houses; whether he is gay, does cocaine, both, or neither; phone taps; phone lines misdirected to Mexico; arrested reporters; payoffs; conspiracies; crooks; egomaniacs; fools; paranoia; which newspapers are shills and for who; money laundering; his Irish temper; false identities; threats; intimidation; and private investigators. All in 61 minutes." Cuban then short-sells 10,000 shares of Overstock.
98 Call it a merger of equals.
A few weeks after eZiba.com sends out its winter catalog, the call center's pin-drop silence begins to worry execs. As it turns out, a bug in a program designed to identify the best prospects on eZiba's mailing list led to the catalog instead being sent to those deemed least likely to respond. "Sadly, our probability estimates were correct," says eZiba founder Dick Sabot. On Jan. 14, eZiba suspends operations while seeking new investors to cover its cash shortfall. Overstock.com later buys the retailer's assets for $500,000.
99 Hey, when did ethics become part of the B-school curriculum?
In March, Harvard Business School announces that it will reject 119 applicants who "hacked" into a website to learn their admission status. The hack in question involved modifying part of a Web address to take advantage of the site's lack of security.
100 BUBBLE TROUBLE, PART 7
Bubble? What bubble? Oh ... that bubble.
In May an Experian-Gallup national survey finds that 65 percent of Americans haven't heard anything about a possible "housing bubble." Another 12 percent have heard "only a little." Indeed, 70 percent expect home prices to keep rising, while only 5 percent think they'll slip. However, when the facets of a housing bubble are described to them, about 40 percent go on to say that the scenario is likely to occur in their area in the next three years.