(FORTUNE Magazine) – A year ago, rookie CEO Durk Jager told FORTUNE he was bent on shaking up Procter & Gamble. "You have to create a revolution," he declared coming into the job. Facing six consecutive quarters of stagnant sales, Jager vowed to snap the 163-year-old, $38 billion behemoth out of its stupor. He would whip bastions of stodgy Proctoids into a sleek fighting force of nimble, entrepreneurial freethinkers--and bigger risk takers. "Everybody is always worried about taking risks, because nobody likes to fail," he avowed at the time. "But you have to celebrate failure." For a company with a long history of playing it safe, this promised to be a real imbroglio.

One year later Jager's revolution is in full swing. The company has overhauled its reporting lines. It started up an Internet beauty site in San Francisco. It bought a multibillion-dollar business, launched three new big product lines, and will introduce another five this year. All this from a place that hasn't delivered a blockbuster product since the introduction of Pampers--in 1961. A new P&G, for sure, is emerging. But the question is, is it improving?

The brazen new face of P&G debuted publicly last month when the company stepped into the fray of a $79 billion hostile takeover. P&G's challenge to Pfizer in its battle to acquire Warner-Lambert and American Home showcased its new personality. It was a bold, aggressive, and, yes, very risky move. If consummated, the deal would have transformed Procter into a $60-billion-a-year company and made it the second-largest pharmaceuticals outfit in the world. It also would have pushed the company into uncertain territory.

P&G's ability to run a drug business is a big question mark. Its track record running its present health-care division is mediocre. Indeed, when news of the deal talks leaked in mid-January, investors pummeled the stock, sending it down 18%, to $94. (It's now trading around $96.) In one week it lost $28 billion in market value. Embarrassed and exasperated, Procter slunk away from the deals. "This could have been a blockbuster," Jager said in a terse press release. "But [press] leaks created an environment in which we cannot continue meaningful discussions." The company was reportedly so furious with the press that it barred all reporters from its quarterly conference call the next day.

But this, by all accounts, is only a warm-up for what's to come. Undeterred by the Warner-Lambert episode, P&G is clearly on the prowl for its next big target. In last month's conference call (the one reporters were barred from), the company stated, "We will not shy away from the possibility of doing a major combination with another company." Already, in the past six months, P&G has snatched up Iams, a pet food business, for $2.6 billion, and Recovery Engineering, the maker of Pur water filters, for $300 million. Just before taking on Warner-Lambert, it reportedly approached (and was rebuffed by) Gillette. Street analysts say Gillette still could be a likely target (and would be received better than Warner-Lambert). Energizer--which Ralston Purina is expected to spin off--is also on the hit list.

A high-profile acquisition doesn't fully cure P&G's growth problem. Even a whopper like Warner-Lambert would have added only 1% to 2% gains to Procter's growth rate. In fact, some Street analysts say that instead of bulking up, P&G--with more than 300 brands--needs to shed dead weight. Product lines such as Max Factor and Cover Girl, which make up 19% of sales, have been in decline for years. Its cleaning division--Mr. Clean, Spic and Span--which makes up 12% of sales, has lost 40% of its market share over the past five years. Spinning them off, say some analysts, would make P&G more focused. Still, such a move is unlikely. "They want to be the 800-pound gorilla," says an analyst who asked not to be named.

So how else do you charge up a hulk like P&G? Come up with a new Tide. Over the past 12 months, under Jager's mandate, Procter has been on the hunt for its next billion-dollar brand. It has devoted $200 million--15% of its R&D budget--to developing entirely new product categories. Out of this has emerged P&G's new hopefuls: Febreze, a spray-on odor eliminator; Swiffer, a dry mop; Dryel, a home dry-cleaning product; Thermacare, a heat wrap; Fit, an antibacterial food spray; and Impress, a high-tech plastic wrap. (Swiffer and Febreze have done well, while Dryel has faltered.) The company promises to deliver 15 more over the next two years.

Jager's one-year report card is in. So far, he has indeed given sales a jump-start. Last month, thanks to its new acquisitions and product launches, P&G reported its biggest sales gain in two years: 7% for the quarter. Next quarter, sales are expected to be up another 9%. But big moves don't come cheap. Jager's aggressive plans have hit earnings hard. This quarter net income was down 1%. By contrast, a year ago it grew 11%. How does Jager feel about his results? He's not saying; he declined to talk to FORTUNE this time around. But the year 2000 will determine whether Jager is the Mr. Clean that P&G so desperately needs.

--Katrina Brooker