(FORTUNE Magazine) – WHAT? NO CARLY AT NO. 1? IT'S TRUE. FOR THE first time since we introduced our 50 Most Powerful Women in Business list way back in 1998, Hewlett-Packard CEO Carly Fiorina doesn't top the list. 2004 belongs to Meg Whitman. Here's just one reason: The $60 billion market value of eBay, the company she runs, has surged past that of HP. (For more, see previous story.)

As in past years, we ranked these women on four major criteria: the size and importance of the woman's business in the global marketplace; her clout inside her company; her career trajectory; and in certain cases her cultural and social impact.

Seven new women managed to elbow their way to the table, and three women returned after falling off the list in previous years. Zoe Cruz, our highest-ranking newcomer, has made her mark with some of the toughest critics on Wall Street: her fellow bond traders. Claire Watts, as head of Wal-Mart's apparel and home merchandising division, buys $37 billion worth of stuff every year--and commands the attention of suppliers all over the world. Among the returnees is Heidi Miller, who resurfaced at the new J.P. Morgan Chase.

And who are the fallen? There are ten. Betsy Holden was demoted from her job as co-CEO of Kraft Foods; Betsy Bernard, AT&T's former president, quit; and Dina Dublon lost out as power shifted at J.P. Morgan Chase. Others were simply displaced by a fast-rising crop of stars whom you'll likely see in the headlines for years to come.

If there is one thing that connects these women, it's that they don't just run things--they build them. These are women whom headhunters adore and whose phone calls you want to return. You should get to know them.

1

Meg Whitman

President and CEO

eBay

2003 rank 2 • Age 48

Whitman has built the world's largest online marketplace, the world's most valuable Internet brand--and the fastest-growing company in history. Take that, Bill Gates!

2

Carly Fiorina

Chairman and CEO

Hewlett-Packard

2003 rank 1 • Age 50

Yes, she still runs the 11th-largest corporation in the U.S., with $73 billion in revenues. But Carly has fallen out of the top spot thanks to a power surge by Whitman. It didn't help that this CEO has missed earnings targets--execution has been problematic. And she's still getting crunched between competitors IBM and Dell.

3

Andrea Jung

Chairman and CEO

Avon Products

2003 rank 3 • Age 46

Since Jung took the helm in 1999, Avon's stock has risen 174% and its sales have grown 30%, reaching $6.8 billion last year. With two-thirds of the company's revenues generated outside the U.S., Avon's 4.4 million sales representatives are peddling a truly global brand. The company's next big market: China.

4

Anne Mulcahy

Chairman and CEO

Xerox

2003 rank 4 • Age 51

Mulcahy is the hottest turnaround act since Lou Gerstner. The company's profits have rebounded, although revenues remain flat ($16 billion in '03). New high-end products like half-million-dollar digital presses are spurring sales.

5

Marjorie Magner

Chairman and CEO, Global Consumer Group,

Citigroup

2003 rank 5 • Age 55

Magner has been delivering great results on a grand scale. She runs the biggest chunk--$41 billion in revenues and $9.6 billion in profits--of the world's largest financial services company. And the recent streamlining of international operations puts more influence in her lap.

6

Oprah Winfrey

Chairman

Harpo

2003 rank 7 • Age 50

Circulation of her magazine, O, rose 14% last year, to 2.6 million; O at Home made its debut in May; and she has half a million people in her book club. Oprah's talk show entered its 19th season ranked at No. 1. Her closest competition? Dr. Phil, whose TV program she launched from her Harpo production company.

7

Sallie Krawcheck

CFO (as of Nov. 5)

Citigroup

2003 rank 14 • Age 39

Krawcheck just snagged a promotion: Next month she becomes CFO and head of strategy at Citi, a clear indication that she is being groomed for a shot at CEO someday. As head of Smith Barney, her current job, she surprised critics by increasing profits and productivity.

8

Abigail Johnson

President, Fidelity Management & Research

2003 rank 11 • Age 42

Fidelity's heir apparent controls the firm's $1 trillion investment management arm. She's getting vocal too: Last year she lobbied for electronic trading at the New York Stock Exchange and said her scandal-plagued competitors did "stupid things." Fidelity has added $29 billion in net assets since the fund scandals broke last year.

9

Pat Woertz

EVP, Global Downstream

ChevronTexaco

2003 rank 9 • Age 51

Soaring oil prices helped Woertz, who runs refining and marketing, rack up more than $1 billion in profits and increase margins in 2003. This year looks even better--profits at her unit are $1.7 billion in the first six months alone.

10

Karen Katen

EVP; President, Global Pharm., Pfizer

2003 rank 6 • Age 55

Viagra may be down to three-quarters of the U.S. market, but Katen still oversees nine billion-dollar blockbusters as well as $39.6 billion in sales last year. With drugmakers under attack, Katen introduced a program to provide Pfizer medicines at a discount--and placate critics.

11

Judy McGrath

Chairman and CEO

MTV Networks, Viacom

2003 rank 15 • Age 51

Her recent promotion gives her even more cultural influence. MTV Networks is Viacom's most profitable division, with a projected $5 billion in revenues and $2 billion in profits in 2004.

12

Indra Nooyi

President and CFO PepsiCo

2003 rank 8 • Age 48

As Coke flounders, Pepsi's earnings are up 13% this year. Nooyi's performance has been solid: She has kept the company's balance sheet healthy. Unfortunately, the next key career step--an operating job--still eludes her.

13

Ann Moore

Chairman and CEO Time Inc., Time Warner

2003 rank 13 • Age 54

Despite a still-sluggish ad market, Moore kept the world's largest magazine publisher (and FORTUNE's parent) humming along. This year she launched five major new titles and gained responsibility for the book publishing unit.

14

Pat Russo

Chairman and CEO Lucent Technologies

2003 rank 21 • Age 52

Russo brought Lucent back to profitability this year, a milestone for the struggling $8.5 billion telecom giant. In fact, it just had its most profitable quarter in more than four years. Another triumph: She landed a $5 billion contract from Verizon this summer.

15

Christine Poon

Worldwide Chair., Medicines and Nutritionals Johnson & Johnson

2003 rank 27 • Age 52

Poon manages the fastest-growing business in Big Pharma, which accounts for about half of Johnson & Johnson's $42 billion in sales. Last year she picked up responsibility for the $2 billion nutritionals segment.

16

Zoe Cruz

Worldwide Head, Fixed Income, For. Ex., & Commod., Morgan Stanley

NEW • Age 49

Cruz runs one of the largest trading desks on Wall Street. In 2003, a record year in trading, she brought home $5.4 billion in revenues and a bigger paycheck than CEO Phil Purcell.

17

Doreen Toben

EVP and CFO Verizon

2003 rank 17 • Age 54

Profits at the nation's largest telecom were down last year, largely because of a massive employee buyout. But Toben's cost-cutting measures have slashed nearly $20 billion in debt from the company's balance sheet and increased cash flow.

18

Anne Sweeney

Co-Chair., Disney Media; Pres., Disney- ABC Television, Walt Disney

2003 rank 35 • Age 46

Sweeney turned the Disney Channel into a gold mine. Now she has a tougher TV gig: heading up all of Disney's nonsports cable channels, plus the struggling ABC broadcast network. Can she lift ABC from fourth place?

19

Amy Woods Brinkley

Chief Risk Officer Bank of America

2003 rank 22 • Age 48

Brinkley's job is bigger and harder since BofA's merger with Fleet, which brought total assets to more than $1 trillion. Though she's had some cleanup to do on the Parmalat ordeal, Brinkley has brought problem business loans down 59% from their peak in 2002.

20

Susan Arnold Vice Chair., Global Beauty Care Procter & Gamble

2003 rank 31 • Age 50

Arnold was promoted this year to run a $15 billion business, more than a quarter of the company's revenues. Insiders say she has a shot at succeeding CEO A.G. Lafley.

21

Amy Pascal

Vice Chairman; Chairman of Motion Picture Group, Sony

2003 rank 38 • Age 46

While most major studios were dodging box- office bombs, Pascal's Spider-Man 2 won big, scoring $771 million worldwide and adding to Sony's string of hits. It's a banner year vs. 2003, when operating profits fell 40%.

22

Ann Livermore

EVP, Technology Solutions Group Hewlett-Packard

2003 rank 24 • Age 46

Fiorina's trusted lieutenant doubled the size of her business in May when she added servers, storage, and software to her $12 billion services division. But now she has to fix servers and storage, which were responsible for last quarter's earnings shortfall.

23

Myrtle Potter

President, Commercial Operations

Genentech

2003 rank 29 • Age 46

Potter has helped keep the biotech sizzling, overseeing three product launches in nine months, including the colon cancer drug Avastin. Promoted this year along with Susan Desmond-Hellmann (No. 24), Potter also joined the board of Amazon.com.

24

Susan Desmond-Hellmann

President, Product Development Genentech

2003 rank 30 • Age 47

She develops the drugs that her colleague Potter sells. An oncologist by training, Desmond-Hellmann's promotion has given her more say over Genentech's expanding pipeline. Some 30 drugs are in late-stage development. Next up for FDA approval: Tarceva, a lung cancer drug.

25

Gail Berman

President, Entertainment, Fox Broadcasting Co., News Corp.

2003 rank 25 • Age 48

Berman was promoted to run all of Fox's entertainment programming this year for good reason. Last season American Idol, which she developed, owned its time slots, raked in $260 million in profit, and fueled countless water-cooler conversations across the country. Early buzz on the fall season has been lukewarm, and other networks have complained of copycatting with shows like The Next Great Champ. But Berman still has a deep bench with hits like The O.C. and The Simple Life.

26

Shelly Lazarus

Chairman and CEO, Ogilvy & Mather Worldwide, WPP

2003 rank 16 • Age 57

Like most of its advertising competitors, O&M has struggled to keep pace in an increasingly fragmented media market. No major new account wins and a shrinking business with existing clients may keep O&M's revenues flat this year. In 2003 Lazarus generated an estimated $700 million in revenues.

27

Sherry Lansing

Chairman, Motion Picture Group, Paramount, Viacom

2003 rank 20 • Age 60

Paramount has been an underperformer in recent years, in part because of the tight purse strings of its parent. This year was no different. (Bright spots: Mean Girls and the well-received The Manchurian Candidate. Critical and commercial flop: The Stepford Wives.) Still, a management shakeup in June left Lansing the sole head of the studio with promises of a bigger budget and more creative freedom, a strong vote of confidence from Viacom chief Sumner Redstone.

28

Stacey Snider

Chairman, Universal Pictures

General Electric

2003 rank 18 • Age 43

It's been a so-so year for Snider. She's had a handful of $100-million-plus-grossing films worldwide (The Bourne Supremacy, Along Came Polly, Dawn of the Dead) and a few expensive bombs (most notably Chronicles of Riddick, which grossed more than $100 million around the globe and still lost money). But the studio remains profitable, and that's something.

29

Heidi Miller

CEO, Treasury and Securities Svcs.

J.P. Morgan Chase

RETURN • Age 50

She runs a boring-sounding business: a $6 billion custody, transaction-processing, and clearing operation. But Miller's power stems from her long association with the big bank's CEO-in-waiting (and fellow Citigroup alum) Jamie Dimon. She helped Dimon turn around Bank One, where she was CFO. Now that it has been acquired by J.P. Morgan Chase, watch her to co-star when Dimon runs the show.

30

Cathleen Black

President

Hearst Magazines

2003 rank 26 • Age 60

Ad sales at the world's third-largest magazine publisher are still sluggish, up 3% in 2004. But total revenues have grown 9% this year and last. Black has had huge success with Oprah's magazine O. She stumbled, however, with Lifetime, a title based on the cable channel, which folded a year and a half after its debut.

31

Irene Rosenfeld

Chairman and CEO, Frito-Lay

PepsiCo

NEW • Age 51

Kraft Foods veteran Rosenfeld snagged the top spot this year at PepsiCo's most profitable division. With $9 billion in sales last year, Frito-Lay was responsible for 34% of the company's revenue and generated $2.4 billion in profit. Her main challenge now is to keep business growing in a low-carb nation.

32

Linda Dillman

EVP and CIO

Wal-Mart Stores

2003 rank 28 • Age 48

This is the woman who leads Wal-Mart's transition to a new inventory tracking technology called radio-frequency identification (RFID). Dillman has exercised her company's unmatched muscle by insisting that Wal-Mart's suppliers foot the bill for the tracking tags, which will be slapped on pallets of everything from fish to footwear. With Wal-Mart responsible for 9% of U.S. retail spending, it's no surprise that there hasn't been major dissent, even from big suppliers like Procter & Gamble.

33

Mary Sammons

President and CEO

Rite Aid

2003 rank 37 • Age 58

While Rite Aid's former CEO cools his jets in jail for the fraud that nearly ruined the company in 1999, Sammons's turnaround effort is accelerating. Revenues last year hit nearly $17 billion, and the company made a profit after six years of losses. However, with an anemic market cap of $2.3 billion and same-store sales growth hovering in the single digits, the company is still far from getting a clean bill of health.

34

Janet Robinson

EVP and COO

New York Times Co.

2003 rank 48 • Age 54

Next year Robinson, who currently runs the company's newspaper operations, will become CEO of one of the most influential media operations in the world. This year she expanded the flagship paper's national reach, adding eight printing sites and overseeing the biggest redesign at the New York Times since the Gray Lady added color photos in the 1990s.

35

Judy Lewent

EVP, CFO; President, Human Health Asia, Merck

2003 rank 23 • Age 55

Among CFOs, she's considered a star, and last year she took over Merck's business in the hot Chinese market. But the company is having problems--its stock has dropped 13% over the past year due to pipeline difficulties. The stock's decline isn't Lewent's fault, but it hurts her chances of becoming CEO when Ray Gilmartin steps down in 2006. She's a 24-year Merck veteran with a reputation as a loyal soldier; the board may be more attracted to an outsider willing to shake things up.

36

Susan Ivey

President and CEO

Reynolds American

NEW • Age 45

The recent merger of tobacco companies R.J. Reynolds and Brown & Williamson vaulted Ivey, B&W's former CEO, to the top of the newly created holding company, Reynolds American. The combined companies would have had revenues of $8.3 billion last year. Reynolds is expected to reach $1 billion in profits in 2004 as it focuses primarily on the U.S. market. It has five of the ten top-selling American brands.

37

Nancy Peretsman

EVP and Managing Director

Allen & Co.

2003 rank 36 • Age 50

Consigliere to many media moguls, Peretsman plays the investment banking game for the long haul. That means she doesn't always get credit for big deals like this year's $4.9 billion sale of MGM to Sony. Her next gig: the sale of bankrupt cable provider Adelphia.

38

Vivian Banta

Vice Chairman and CEO, Insurance, Prudential Financial

2003 rank 40 • Age 54

Her move last year to sell Prudential's volatile property and casualty business is looking better with every hurricane. Banta brings in $15 billion of the company's revenues and 41% of its operating earnings. Last year's purchase of American Skandia makes her one of the top ten players in the annuity game.

39

Brenda Barnes

President and COO

Sara Lee

RETURN • Age 50

In 1998, Barnes famously gave up a top job at PepsiCo to spend more time with her family, in the process sparking a national debate over the notion that women can't have it all. But she came back to work this July--as the second in command at Sara Lee, where she's been charged with improving the company's mediocre performance.

40

Vanessa Castagna

EVP; Chair. and CEO, Stores, Catalog, Internet, J.C. Penney

2003 rank 41 • Age 55

Castagna has played a major role in the once-struggling company's transformation into an $18 billion retail powerhouse. CEO Allen Questrom is scheduled to retire next year. The board has initiated an outside search to replace him, but the smart money is on Castagna.

41

Deb Henretta

President, Global Baby and Adult Care, Procter & Gamble

2003 rank 34 • Age 43

Under Henretta, Pampers has become P&G's first $5 billion brand. Last year the baby-care division recorded its second year of record sales and profits.

42

Lois Quam

CEO, Ovations

UnitedHealth Group

2003 rank 43 • Age 43

With her business targeting seniors, Quam brings in about $7 billion in sales for the No. 1 U.S. health-services provider. Her home-care program impressed Britain's government so much, it's contracting with UnitedHealth to do a similar setup.

43

Lisa Weber

President, Individual Business

MetLife

NEW • Age 41

Now running a $12 billion life-insurance unit, Weber joined MetLife with a mandate to shape up the troops before the company's IPO. She's credited with instilling a "performance culture" that's helped the stock nearly double since 2000.

44

Ursula Burns

SVP, President, Business Grp. Ops.

Xerox

2003 rank 44 • Age 46

Burns gained some stature this year when she was elected to the board of American Express. In her day job, she introduced 40 new products in the past two years; her business accounts for two-thirds of Xerox's revenues. Profits for the first half of 2004 were 20 times larger than in the same period last year.

45

Claire Watts

EVP, Merchandising

Wal-Mart Stores

NEW • Age 44

Watts made a name for herself at Wal-Mart by managing successful house brands such as the Mary-Kate and Ashley clothing and cosmetics lines. Her promotion last year to head of merchandising for the retailing juggernaut's $37 billion apparel and housewares division means she may well have the largest shopping budget of any woman alive.

46

Marilyn Carlson Nelson

Chairman and CEO

Carlson Cos.

2003 rank 45 • Age 64

Her family-owned travel empire encompasses over 800 hotels in 67 countries, one of the world's largest travel agencies, and more T.G.I. Friday's than you can shake a chicken finger at.

47

Jenny Ming

President, Old Navy

Gap

2003 rank 42 • Age 49

Ming still runs the iconic brand that she built into Gap's biggest business. Unfortunately, soft summer sales and a disappointing back-to-school season led Old Navy to slight declines in same-store sales over the past year.

48

Susan Decker

CFO and EVP, Finance and Administration, Yahoo

NEW • Age 41

Decker is a key member of the team, led by CEO Terry Semel, that set the strategy for Yahoo's post-bubble second act. Wall Street approves: The stock has octupled since late 2001. Semel approves, too. The proof: In 2002, Decker got a pay package worth $19 million.

49

Anne Stevens

Vice President, Canada, Mexico, and South America, Ford Motor

RETURN • Age 55

Stevens's division will sell 700,000 cars and trucks this year and export another 90,000 --a business big enough, says a Ford rep, to be "a FORTUNE 200 company" all on its own (translation: roughly $10 billion in revenues).

50

Carol Kovac

GM, Healthcare and Life Sciences

IBM

NEW • Age 52

Kovac built a life sciences unit from nothing to $1 billion in sales in just three years. Now she heads a thriving $4.8 billion hardware, software, and services business aimed at hospitals and medical researchers.