ONE "BAD APPLE" CAN SPOIL THE WHOLE OFFICE

Researchers at the University of Washington have come to the conclusion that having just one "bad apple" in the workplace can cause negative behavior to spread like a virus, bringing down coworkers and destroying good teams. In the study, a bad apple was defined as someone who was chronically unhappy and emotionally unstable, or a bully who attacks others, or someone who does not do his/her fair share of the work. What should businesses do to weed out bad apples before they become a problem? If one is already hired, consider putting him/her on projects that do not require teamwork and keep him/her away from the team. In the hiring process, a more thorough screening process that includes checking references and administering personality tests could help businesses identify candidates who are disagreeable and lack emotional stability.

Reuters

TOP HEAD ROLLS AT CARTOON NETWORK

The president and general manager of Cartoon Network, Jim Samples, resigned under pressure Friday following the incident on January 31st that caused Boston to shut down subway, highway, and river traffic due to fear that some of the 40 blinking signs for the "Aqua Teen Hunger Force" series and movie were thought to be potential terrorist weapons. Samples had worked at Cartoon Network for 13 years.

From WSJ.com:

"I deeply regret the negative publicity and expense caused to our company as a result of this campaign," Mr. Samples wrote in an email to Cartoon Network employees. "I feel compelled to step down .. in recognition of the gravity of the situation that occurred under my watch."

EXECUTIVE PAY BECOMING A SERIOUS ISSUE

How does a $210 million severance package sound? $200 million? Well, Robert Nardelli did a poor job of running Home Depot and got pushed out of the executive suite recently, but was handed the $210 million king's ransom on his way out the door. Henry A. McKinnell did perhaps an even worse job of running Pfizer. His reward? A cool $200 million.

Things have gotten so bad on the executive pay front that even President Bush has recently weighed in on the issue. In a speech on Wall Street in January he said that corporate board members "need to pay attention to the executive compensation packages that you approve."

From the AP:

Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, is expected to introduce legislation on the issue. Frank said in a January speech at the National Press Club that high CEO pay is "not just a matter of envy. It has reached a point where it has some macroeconomic significance."

Frank pointed to research done by Harvard professor Lucian Bebchuk showing that compensation of the top five officers at the country's public companies between 1993 and 2002 totaled about $250 billion — nearly 10 percent of aggregate profits. CEO pay grew by a median 11.29 percent in 2005, according to The Corporate Library, which tracks governance, compensation and performance.

SNICKERS DROPS "MECHANICS KISSING" AD

The ninth-ranked Super Bowl ad according to USA Today's Ad Meter has been pulled by the makers of Snickers. It will no longer run on television and has been deleted from the Snickers website, although it is widely available on other sites. The ad was pulled after several organizations that represent gays and lesbians complained that it was offensive.

From USA Today:

Among groups who complained is the Gay & Lesbian Alliance Against Defamation. "Mars needs to apologize for the deplorable actions of its Snickers brand," said GLAAD President Neil Giuliano in a statement.

But not all gay activists object to the ad. Cyd Zeigler, co-founder of Outsports.com, a website for gay sports enthusiasts, says he saw it at a Super Bowl party with 30 gay friends — and no one had a problem with it. "I simply wasn't offended by it," Zeigler says. "I just don't see how a couple of mechanics pulling out chest hair because they kissed is offensive."

Still, he thinks that Masterfoods would be wise to apologize. "They're a business," he says. "And no company in a free market is in the business of alienating consumers, intentional or not."

ANHEUSER-BUSCH WINS SUPER BOWL AD BATTLE

Anheuser-Busch won USA Today's Super Bowl Ad Meter battle for a record ninth consecutive year. AB had the highest rated ad, four of the top five, and seven of the top ten ads, making the most of their $20+ million investment. The winning ads were produced by the superstar ad agency DDB Chicago. To view all of the ads at USA Today click here. Anheuser-Busch also has the top five rated ads on the WSJ.com site according to an online opinion poll.

JANUARY UNEMPLOYMENT RISES TO 4.6%

The Department of Labor released the January 2007 unemployment data today showing that unemployment rose from 4.5% in December to 4.6%. Some highlights of the report:

• 111,000 net new jobs were added to non-farm payrolls, 104,000 of those in the service sector.
• 16,000 factory jobs were lost in January, the seventh straight monthly decline.
• 22,000 construction jobs were added in January.
• Average hourly earnings rose 0.2% to $17.09 per hour.
• Over the past year, hourly and weekly earnings have risen 4%.
• The unemployment rate for Hispanics rose to 5.7% from 4.9% in December.
• The unemployment rate for African Americans dropped to 8% from 8.4%.
• The unemployment rate for whites rose to 4.1% from 4%.

USA Today
WSJ.com

FEDERAL RESERVES LEAVES RATES AT 5.25%

On Wednesday, the Federal Reserve left the Federal Funds Target Rate unchanged at 5.25%. That is the highest rate in six years. After increasing the rate 17 consecutive times from June 2004 to June 2006, the Fed has now left it unchanged for five consecutive meetings.

USA Today

MICHAEL DELL TAKES OVER AS CEO AT DELL

When Michael Dell handed over the CEO title to Kevin Rollins in 2004, he remained as chairman of the board. Yesterday, after Rollins resigned, Michael Dell took back over as CEO and will remain as chairman. Even though the company has endured some bad times and just announced that it will miss fourth quarter revenue and earnings estimates, after it was announced the Michael Dell was taking over, the stock rose $1, or 4.1%.

WSJ.com
USA Today

MICROSOFT HAS BEST REPUTATION WITH CONSUMERS

The eighth annual survey to determine the U.S. corporations with the best and worst reputations showed that Microsoft jumped from number seven in 2005 to number one in 2006. While there is much to take away from the survey, it is interesting to note the Wal-Mart fell from 29th in 2005 to 40th in 2006.

WSJ.com

INITIAL U.S. GDP FIGURES SHOW 3.4% GAIN IN 2006

The Commerce Department released its initial fourth quarter gross domestic product figures this morning showing a 3.5% seasonally adjusted annualized growth rate for October through December of 2006. That bested a 2% growth in the third quarter and put the initial 2006 GDP growth at 3.4%, compared to 3.2% in 2005 and 3.9% in 2004.

A closer look at the data released shows that an important inflationary statistic, personal consumption expenditures (PCE), actually declined in the fourth quarter at an annual rate of 0.8%, the biggest drop since 1954 and the first since 1961.

From USA Today:

Excluding volatile food and energy prices, the so-called core PCE index was
up at a 2.1% annual rate, still slightly above the Fed's assumed comfort range
of 1% to 2%. Economists were expecting the core PCE index to advance 2.2%.

WSJ.com

MICROSOFT'S WINDOWS VISTA ON SALE TUESDAY

Microsoft's newest operating system, Windows Vista, intended to replace Windows XP, will become available to consumers at some retailers starting at 12:01 a.m. Tuesday morning. The operating system has been available to many corporate clients since November. Most reviews I've read indicate that while it is a major advance, most consumers should stick with Windows XP on older computers instead of upgrading and wait to get Windows Vista preinstalled on their next new computer. Many of the more sophisticated features in Vista require more memory than most older computers have and a high-end graphics card.

USA Today

SUPER BOWL ADS GENERATE PROFIT ONLINE

Most people have heard that CBS is charging up to $2.6 million for one 30-second ad spot on the Super Bowl. The hefty price tag can be justified by the likely 90 million viewers in a fragmented television landscape where more viewers have migrated to niche cable shows and many view less TV to spend time playing video games or surfing online.

What most people probably don't know is that sites like USA Today and IFilm have started charging for "pre-roll" ads, ads that will have to be viewed before Super Bowl ads when surfers go to those sites to view Super Bowl ads after the game. In 2006, IFilm's site experienced a 157% surge in traffic the week after the Super Bowl going from 1 million unique visitors the week before to 2.6 million the week after the game.

WSJ.com

INTEL & IBM BREAKTHROUGH TO EXTEND MOORE'S LAW

Gordon Moore, co-founder of Intel, predicted in 1965 that innovations in integrated circuit materials, designs, and other innovations would allow for the number of transistors on an integrated circuit to double every two years. This is known as Moore's Law. An announcement on Friday by IBM and Intel should extend Moore's Law into the foreseeable future. The innovation uses a new exotic material in the manufacture of integrated circuits and will allow chips to be made with circuitry as small as 45 nanometers, which is 1/2000th the width of a human hair.

Reuters

PRESIDENT BUSH UNVEILS HEALTH INSURANCE PLAN DETAILS IN STATE OF THE UNION ADDRESS

As expected, President Bush outlined some details of his controversial health insurance plan in last night's State of the Union Address. His plan calls for an end to tax-free premiums in employer-provided health insurance plans, making the premium paid taxable income. To offset some of the tax burden, all taxpayers who either have employer-provided health insurance or purchase their own insurance would receive a deduction of $15,000 for a family plan or $7,500 for an individual. Currently, the average cost of an employer-provided family plan is $11,500, while the average for individual plans is $4,300.

From USA Today:

"For a lot of people, it would be a bonanza," says Joe Antos of American Enterprise Institute. He and other supporters of the plan say it would encourage employers to offer less-generous insurance plans. They say generous plans drive up the cost of health care.

Paul Fronstin of the Employee Benefit Research Institute says the proposal might lead more employers to drop coverage. Some employers might also find that younger, healthier workers would opt out of company plans to buy their own insurance, leaving sicker, more expensive workers behind, he says.

YAHOO TO REPORT EARNINGS TODAY

Yahoo will report fourth quarter earnings today and will likely give an update on the slow customer migration from its old keyword search advertising to the new "Panama" system, which works much more like Google's Adwords. Investors hope Panama will help Yahoo narrow the growing gap in online ad sales.

WSJ.com

PRESIDENT BUSH PROPOSES HEALTH INSURANCE TAX CHANGES

In his weekly radio address this morning, President Bush said that he wants to change tax codes to make insurance more affordable for the uninsured. From The Wall Street Journal:

"Rising health care costs are making insurance too expensive for millions of our citizens," Mr. Bush said Saturday in his weekly radio address. To remedy the situation without hiking taxes or creating a new entitlement program, he says the tax code can be rewritten to treat health insurance more like home ownership.

"The current tax code encourages home ownership by allowing you to deduct the interest on your mortgage from your taxes," Mr. Bush said. "We can reform the tax code, so that it provides a similar incentive for you to buy health insurance."

Mr. Bush didn't outline the nuts and bolts of his tax-code proposal, but it is expected to include capping some taxpayers' ability to exclude employer-based healthcare benefits from their income, subjecting them to federal income tax. Savings could go toward tax credits for lower-income people who buy health insurance or for state insurance pools.

Altering the tax benefits for employer-provided health care involve far-reaching changes to the tax code affecting millions of taxpayers and companies. Bush's Advisory Panel on Federal Tax Reform proposed in November 2005 to limit the tax benefit for employer-provided health care to $11,500 for families and $5,000 for singles. The recommendation, which has languished with the tax panel's other reform proposals, came after witnesses told the tax panel the existing federal tax subsidies for health insurance were benefiting rich workers while raising insurance prices for the poor and increasing the number of uninsured.

GM SALES DOWN 1% IN 2006

General Motors announced that sales declined 1% from 2005 to 9.09 million vehicles in 2006. Part of the decline can be attributed to rental car companies purchasing 75,000 fewer vehicles from the company last year. A closer look at the numbers shows that sales outside of the United States actually increased last year to 4.97 million, 55% of the total vehicles sold.

Rival Toyota estimates that it sold 8.8 million vehicles in 2006 and plans to build 9.42 million in 2007. Recently, most analysts have predicted it is a matter of when, not if, Toyota sells more vehicles than GM and takes over the global leader.

USA Today

STARBUCKS DROPPING GROWTH HORMONE MILK

Responding to criticism from consumer groups concerned about the lack of testing and data regarding rBGH, a growth hormone given to some dairy cows to increase milk production, Starbucks has pulled growth hormone milk products from many of its stores and is expected to go companywide when new milk sources can be found. Earlier this month Starbucks announced it would quit selling food containing trans fats at half of the company's U.S. outlets. Starbucks has a long history of responding to consumer requests and is known as a leader in corporate social responsibility.

From USA Today:

Starbucks Coffee is ending its use of milk products that contain an artificial growth hormone, starting in much of the West and New England. Less than a month after announcing that the chain would stop selling items with trans fats in half its U.S. stores, Starbucks said Tuesday it had begun buying only milk products without bovine growth hormone in those areas. Starbucks has not raised prices and is working with suppliers on the cost of milk, half and half, whipping cream and eggnog, spokeswoman Sanja Gould told the Seattle Post-Intelligencer. Starbucks has 5,668 stores in the United States, but the number affected by the change was not immediately available. It covers company-owned Starbucks outlets in Washington, Oregon, Idaho, Alaska, Montana, Northern California and New England. Earlier this month Starbucks announced plans to stop selling food containing trans fats at half the company's U.S. outlets. The move comes after Starbucks was targeted in a campaign by consumer groups critical of the use of an artificial hormone known as rBGH, which is given as a supplement to dairy cows to increase milk production. For more than a decade, some advocacy groups have asserted that there has not been enough research on the effects in humans of milk products from cows that were given the hormone, which is administered to dairy cattle during the middle phase of lactation to boost milk production. "We are actively engaged with all our dairy suppliers to explore converting our core dairy products to be rBGH-free in our U.S. company-owned stores," Starbucks spokesman Brandon Borrman told Reuters. "It is something we're aiming for."

SIRIUS & XM SATELLITE RADIO CONSIDERING MERGER?

According to The Wall Street Journal, rivals Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. seem to be considering a merger, but any combination of the only satellite radio providers would face serious legal and regulatory antitrust hurdles from the Justice Department Antitrust Division, the Federal Trade Commission and the Federal Communications Commission. According to Reuters, FCC Chairman Kevin Martin today said, "There's a prohibition on one entity owning both of those licenses," making a merger seem unlikely, but he did leave the door open by saying that the FCC would review any transaction submitted to it.

While Sirius and XM are the only satellite radio providers in the United States, they might be able to get over most antitrust and competition hurdles by arguing that satellite radio competes with traditional terrestrial radio, MP3s, Internet radio, and even cellphones.

While both Sirius and XM have added millions of users, totalling more than 12 million, neither has approached profitability. In the past 12 months, Sirius stock price has fallen more than 35% while XM has dropped more than 40%.

DEBIT CARDS: PIN USE VERSUS SIGNATURES

Here are a few facts regarding debit cards from The Wall Street Journal:

• According to Visa, a typical supermarket pays 24 cents in fees when a customer buys $40 in groceries with a debit card using a PIN.
• The same $40 purchased with a debit card using a signature costs the supermarket 35 cents in fees.
• If the customer uses a credit card to make the same $40 purchase, the supermarket may pay more than 50 cents in fees.
  
• Electronic payments (debit and credit transactions) surpassed the use of cash and checks for the first time in 2003.
• Nearly 67% of the 6.2 billion transactions processed by Visa in the three months ended September 30 were debit card transactions.

What does this mean for businesses?

1. Consumers prefer to make electronic payments, so nearly all businesses must offer this option.
2. Fees for debit PIN transactions are lowest, so nearly all businesses should have a PIN touch pad. Currently there are about six million merchant locations that accept credit and debit card payment, but only about two million have the pad technology in place to allow for PIN transactions.
3. To strongly encourage debit PIN transactions, payment terminals that scan cards should automatically default to PIN for scanned debit cards.
   

To most consumers, the difference between PIN and signature transactions is merely one of preference and convenience. To businesses, it is a serious bottom-line consideration. That is why J.C. Penney, Sears, and Sonic, among others, are in the process of installing new systems to encourage the less expensive debit PIN transactions.