Share the wealth! Refer your colleagues to the FORTUNE Education Program.
This week's cover

The FORTUNE Preview Guide

A biweekly guide produced for members of the FORTUNE Education Program.

"How to Invest in the New Net Boom"

Cover Date: May 1, 2006
Note: The FORTUNE Preview Guide is created in HTML. If you are unable to properly view the cover image, Course Connector, or hyperlinks, please view the online version at http://www.fortuneeducation.com/preview_guides/index.html.

COURSE CONNECTOR
http://www.fortuneeducation.com/preview_guides/images/fep_20060501_cc.jpg

ARTICLE SUMMARIES AND QUESTIONS
"Microsoft's New Brain," pp. 56-68: Ray Ozzie may be relatively new to Microsoft — he joined the company in spring 2005, when Microsoft bought Ozzie's Groove Networks — but he has quickly become a leader at the software giant. A renowned programmer famous for creating Lotus Notes, Ozzie was a dream hire, according to both chairman Bill Gates and CEO Steve Ballmer. And the duo hasn't wasted any time in cementing Ozzie's importance to the company. Indeed, they've charged him with spearheading a companywide transformation that they hope will put Microsoft back out in front of the tech industry. While the company is still stupendously profitable, its stock price has barely budged since 2002, largely because Wall Street no longer sees Microsoft as a growth business. To compete with investor darlings like Google and Yahoo, Microsoft must learn to think like they do, and once and for all truly harness the power of the Internet. That's where Ozzie comes in. With his background in developing Net-centric collaboration software, he is well qualified for his assignment to intertwine Microsoft's entire product line with the vast and ever-growing power of the Net. Moreover, he can do what Bill Gates no longer can — not only formulate strategy but also help implement it by working with the troops. Microsoft has some catching up to do, but with Ozzie on board, the company isn't out by a long shot.

In this article, students evaluate whether software programmer Ray Ozzie has the vision and the acumen to reclaim Microsoft's former glory.

Discussion Questions:

  1. Why is it difficult for Microsoft co-founder and chairman Bill Gates to implement sweeping changes at the company? In what ways is Ray Ozzie equipped to handle such a monumental task?


  2. How is Ozzie's focus on the customer a departure from the traditional Microsoft approach? What advantages might a shift in focus bring to the company? Any disadvantages?


  3. In the article, Hewlett-Packard's Dick Lampman states, "I would never underestimate that team [Microsoft], but right now the rate of change seems to be moving against them." Do you agree with this assessment? Why or why not? Will Microsoft's new strategy work? Explain your answer.

"Playing with Pain," pp. 90-104: NBC Sports' Dick Ebersol is one tough character. He survived a deadly plane crash in 2004 that took the life of his 14-year-old son, Teddy. Not five months later, after recuperating from a broken back, three broken ribs and fractures to his coccyx, pelvis and sternum, he brokered a multibillion-dollar deal to bring the NFL back to his beleaguered network. NBC needs all the help it can get. After a decade of dominating primetime, the network now finds itself deeply mired in fourth place behind a resurgent ABC, FOX, and CBS. But NBC has an ambitious comeback plan, and Ebersol's NFL deal has emerged as its centerpiece. In fact, NBC Universal Television Group CEO Jeff Zucker has referred to Sunday Night Football, which this fall will replace ABC's Monday Night Football as the premier primetime football broadcast, as "the cornerstone of rebuilding." If Ebersol is feeling any pressure, he's not showing it. After a career in which he helped create Saturday Night Live, popularized professional wrestling, and produced the past eight Olympic games for NBC, Ebersol exudes a been-there-done-that calm. He expects Sunday Night Football to be in the top dozen or so shows each week, opening the door for other NBC offerings to grab a portion of the audience. It's no wonder he's so confident — with the life and death struggle he's endured, staging a few football games and taking on network rivals is hardly daunting.

Students analyze how NBC hopes to reverse its fortunes with new sports programming headed up by television producer and executive Dick Ebersol.

Discussion Questions:

  1. Jeff Immelt, CEO of GE, NBC's parent company, has said of Dick Ebersol that among GE executives, he "is the most secure about his fit in the organization." What do you think he means by this?


  2. While Ebersol considers himself first and foremost a producer, what skills has he brought to his role as chairman of NBC Sports? How have they contributed to his success and longevity?


  3. Why did Ebersol and Jeff Zucker decide to pursue the NFL? Do you think Sunday Night Football will help NBC improve its overall ratings? Why or why not?

"Not Exactly Counterfeit," pp. 108-116: Are those brand-label shoes you're wearing the real deal? Don't be too sure. Now that Western companies are pervasively outsourcing the manufacture of their products to factories overseas, they're entrusting their precious intellectual property — designs, molds, specifications, trade secrets — to hundreds of contractors and subcontractors all over the world. The risky business trend has led to a rapid increase in the number of counterfeits, knockoffs and "third-shift products," unauthorized products made by authorized contractors, on the market. Take the case of New Balance, the Boston-based, high-performance shoe manufacturer. In 1999, the company requested that its Chinese manufacturer and licensed distributor, Horace Chang, halt the production and sale of an inexpensive style of New Balance sneaker known as a "classic." Chang was not pleased; he'd had tremendous success with the classic and anticipated sales to increase. He disregarded the order and continued to produce and sell the shoe, leading New Balance to terminate his contract. That still didn't stop Chang, who persisted in making and marketing New Balance sneakers and even launched a competing sneaker brand with a similar style and logo. Legal proceedings are still pending in the largely corrupt Chinese court system. New Balance's experience stands as a cautionary tale for all companies outsourcing overseas — when it comes to managing the supply chain, you can't be too careful.

This article reveals how global outsourcing can lead to intellectual property leaks that threaten a company's reputation and profitability.

Discussion Questions:

  1. What is the difference between a counterfeit product and a third-shift product? Why is it so difficult for companies to prevent third-shift activity?


  2. What was the judgment in the first court action New Balance brought against Horace Chang in the Shenzhen Intermediate People's Court for Guangdong province? Explain the court's reasoning. In your opinion, was this a fair decision? Why or why not?


  3. Why hasn't New Balance withdrawn its business from China? How has its experience affected company policy with regard to foreign manufacturers?

"Mr. Johnson Goes to Wall Street," pp. 118-124: Robert L. Johnson has a very impressive resume. The founder of the BET cable network, he is the first black majority owner of an American pro sports franchise, the first CEO to take a black-owned company public on the NYSE, and a consummate dealmaker who oversaw a mini-empire encompassing everything from a jazz label to a hotel company to a lottery operation in the Caribbean. Lest one think he has nothing left to prove, five months ago he formed RJL Asset Management, an umbrella under which he plans to assemble what he says will be Wall Street's first black-owned full-scale financial services operation. Wall Street's color barrier has been notoriously difficult to knock down. Minorities presently manage only 2% of America's private investment dollars. Johnson hopes to change that statistic by hiring top black money managers and analysts and rounding up investors from his inimitable network of entertainers, sports stars, and businesspeople. There is one minor detail — Johnson has never managed money, overseen a hedge fund, or operated a bank. That doesn't bother Johnson, who has already begun surrounding himself with well-respected talent from the investment world. If things go his way, as he suspects they will, he will not only create wealth for himself and his investors, but also open wide the doors to Wall Street to a minority community hungry for opportunity.

Students take a closer look at the career of businessman Robert L. Johnson and his current plans to shake up Wall Street.

Discussion Questions:

  1. According to Robert L. Johnson, why do people on Wall Street think he'll fail in his money-management enterprise? Do you think he'll be able to overcome the obstacles he mentions? Why or why not?


  2. How does Johnson feel his position as owner of the Charlotte Bobcats will help him in his latest venture? In your opinion, what other personal assets does Johnson possess that increase his chances for success?


  3. What factors led to Johnson's interest in money management? Do you agree with Deutsche's Kevin Parker, who believes there is room in the crowded world of hedge funds for a minority-owned fund? Explain your answer.

Share the wealth! Refer your colleagues to the FORTUNE Education Program.

Visit Our Website for Program Benefits
The FORTUNE Preview Guide is a biweekly publication of the FORTUNE Education Program, and is designed to provide professors with the necessary resources to use FORTUNE Magazine in the classroom. The FORTUNE Education Program also invites professors and students to subscribe to FORTUNE Magazine for less than than $1 an issue. Visit our Website at http://www.fortuneeducation.com.

WHAT DO YOU THINK?
This is your FORTUNE Preview Guide. What do you want to see in it? Send your comments or suggestions to fortune@fortuneeducation.com.

CHANGE YOUR SUBSCRIPTION OPTIONS
The FORTUNE Preview Guide is available by e-mail only. Current and archived issues also are available online at http://www.fortuneeducation.com/preview_guides. To notify us of an e-mail address change, please call 800-416-5138 or send an e-mail to fortune@fortuneeducation.com with a complete description of your request. Any changes made will not affect your magazine subscription.

CONTACT US
If you want to know more about the FORTUNE Education Program, or would like to subscribe to FORTUNE Magazine and receive 85% off the cover price, please call 800-416-5138 or visit our Website at http://www.fortuneeducation.com

The FORTUNE Education Program is available only to subscribers in the U.S. and Canada.
© 2006, FORTUNE Education Program Read our Privacy Policy
www.fortuneeducation.com