Poor Little Rich Boys
Ted IV, Lou III, Rupert's son, and the junior Li.
06/26/2001 issue
What's that old joke about making a million in the market? Start with several million. Some well-known rich kids are proving it true with their New Economy investments.
So far, Ted Turner IV has failed to revolutionize the PC industry the way his father revolutionized cable television. Ted 4.0 was an investor and board member at MyTurn.com, which went belly up this year when its plans to roll out the $400 Internet appliance called GlobalPC failed despite a million-dollar ad campaign.
Richard Li, the brash son of Hong Kong magnate Li Ka-shing, sold the Star TV Asian satellite network for $425 million in 1995. But Li's current venture, Pacific Century CyberWorks (PCCW), is drowning in debt. In 1999, the would-be global Internet powerhouse paid $28 billion to buy Cable and Wireless HKT, the dominant telecom provider in Hong Kong. But since then, PCCW has seen its share price plummet 90 percent amid spectacular losses, inaccurate financial reporting, and a write-off of $22 billion.
Louis V. Gerstner III, son of the IBM boss, is a top manager at J Net Enterprises, the ebusiness incubator and former slot machine company. But Gerstner III is no Gerstner Jr.: J Net's stock has slid from $21.50 to less than $4.
James Murdoch, Rupert's tattooed, 27-year-old New Economy emissary, has also suffered setbacks. The cornerstone of his online strategy, the epartners investment fund, was capped in April at only 20 percent of its original $650 million target. The fund also froze new investments in Europe and saw a partnership with eVentures India crumble.
"No amount of 'large name benefit' is going to make a deal [work] without real business substance," says Isabel Maxwell, president emeritus of email provider Commtouch and the daughter of the late controversial British tycoon Robert Maxwell. Her company increased its revenue in 2000 by 350 percent. -Andy Goldberg
Keeping a Tab on the Bartender
Is the guy behind the bar pouring away all your profits?" reads the newspaper advertisement. A bald, pierced, and tattooed bartender stares out from the ad, looking none too pleased.
It's a not-so-subtle pitch for Beverage Tracker, a new service from San Francisco-based VitalLink Business Systems that uses microchips in liquor bottle dispenser-tops to measure exactly how much firewater is poured. The chips wirelessly transmit pour data-with a time and date stamp-to a database, where a bar owner can match spirit flow with point-of-sale information.
The in-your-face advertisement aside, VitalLink downplays the Big Brother aspects of Beverage Tracker. They cite the big-picture benefits that come from more accurate liquor usage measurement, such as tracking specific brand sales to strike better deals with distributors and using less manual labor than the traditional, count-the-empty-bottles inventory method.
Recognize that it will also spell the end of the generous gin and tonic or complimentary shot poured by your favorite bartender. "I'm a little too freaked out by the Big Brother aspect to get involved with anything like that," says the manager of the popular Timo's bar and restaurant in San Francisco. "Besides, I want my bartenders to give away a drink every now and again-it keeps customers coming back." We'll drink to that. -Sean Donahue
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