Other items: Platt says Boeing CEO hopefuls will stay regardless; Consumers complain more about Cingular Wireless; and more.
Bellevue-based InfoSpace said yesterday it received $83 million plus interest in a settlement involving several lawsuits related to its founder and former chief executive, Naveen Jain.
The agreement was approved by King County Superior Court and the U.S. District Court for the Western District of Washington.
The case stems from a derivative lawsuit that shareholder Thomas Dreiling filed on behalf of InfoSpace in 2001 against former company officers and former and current directors.
Dreiling claimed that Jain and the officers and directors misled shareholders about InfoSpace’s future while profiting from selling its stock.
The company, founded in 1996 as an online directory, at one time had a higher stock-market value than Boeing. As the tech bubble burst, however, its value plummeted, prompting a number of shareholder suits. Its practices during this period were chronicled in a recent Seattle Times series (www.seattletimes.com/dotconjob).
The company has evolved today into a profitable online-search and mobile-entertainment enterprise.
Platt: CEO hopefuls will stay regardlessBoeing Chairman Lewis Platt said he believes both of Boeing’s top two internal candidates for chief executive officer will stay at the company even if Boeing turns to the outside for a new leader.
The two inside contenders to succeed Harry Stonecipher — who was forced out March 7 after the board said his affair with a female Boeing executive hurt his ability to lead — are Alan Mulally, head of the commercial-airplanes unit, and James Albaugh, head of Boeing’s defense business, Platt said in an interview.
“I wouldn’t bet a big pile of money that either Jim or Alan would leave” if they don’t get the job, Platt said. One of the two has told him as much, Platt added, though he declined to identify that person.
VP: Sales soon will match AirbusBoeing will reach equilibrium with its European rival Airbus in two years thanks to a recovery by U.S. airlines, a Boeing executive said in an interview published yesterday.
Randy Baseler, vice president for marketing at Boeing Commercial Airplanes, told Madrid financial daily Expansion that Boeing expected to deliver 320 planes this year and between 375 and 385 in 2006.
Baseler said Boeing’s sales had been hit since the Sept. 11, 2001, attacks in the United States by a recession in the U.S. airline industry. Boeing delayed delivery of 600 planes, he said, while Airbus fared better as European airlines were less affected.
“The recession will end in two years and the market will be able to absorb all these planes whose delivery has been delayed,” Baseler was quoted as saying by the newspaper. “That will be the time when Boeing and Airbus reach equilibrium,” he added.
Airbus topped Boeing for a second year running in 2004, with 320 airliner deliveries versus 285 for the U.S. manufacturer.
Consumers complain more about carrierMore consumer complaints were filed against Cingular Wireless, which acquired Redmond-based AT&T Wireless in October, than any other carrier in 2004, according to the Consumers Union.
The group analyzed documents filed with the Federal Communications Commission to determine which carriers had the worst and best track record. In 2004, 29,478 complaints were filed with the FCC, a 38 percent increase from 2003.
Cingular Wireless and AT&T Wireless combined had the most complaints compared with other carriers: 289 per million customers. Of the nationwide carriers, Verizon Wireless had the fewest complaints with 76 per million customers.
Anne Marshall, a Cingular spokeswoman, said many of the complaints came at the beginning of 2004 when AT&T Wireless was experiencing problems with its customer-service software. Since then, Cingular has taken steps to provide better customer service and improve the billing process, she said.
Spinoff unit to get $250M from IACIAC/InterActiveCorp, billionaire Barry Diller’s Internet company, will give $250 million to its Expedia unit to provide it with capital when it is spun off as a public company.
Bellevue-based Expedia, which will consist of travel businesses Hotels.com, Hotwire, Expedia.com and other Web sites, probably will have a revolving credit line of $500 million at the time of the spinoff, New York-based IAC reported in a filing yesterday with the Securities and Exchange Commission.
Diller on Dec. 21 said he would split IAC into two companies by giving shareholders Expedia stock and leaving Ticketmaster, Home Shopping Network and other companies under IAC.
The Expedia spinoff is expected sometime in the second quarter.
Plum Creek Timber
Firm agrees to buy 56,000 acres in Fla.Plum Creek Timber, owner of about 8 million U.S. timberland acres, said yesterday that it agreed to buy about 56,000 acres of Florida timberland from a Greif unit for about $90 million. Plum Creek, which owns about 580,000 acres in the state, will complete the acquisition’s $50 million first phase by June and will buy the rest within the next 18 months, Seattle-based Plum Creek said in a statement.
Nation / World
End of bidding war boosts victor’s stockThe stock of Movie Gallery jumped yesterday after video-store giant Blockbuster abandoned its hostile bid to acquire Movie Gallery’s merger partner Wilsonville, Ore.-based Hollywood Entertainment.
Blockbuster, the largest U.S. video-store chain with 5,500 outlets, Friday said it wouldn’t extend its tender offer of about $985 million, blaming the difficulty of gaining regulatory approval.
The Federal Trade Commission was said to have antitrust concerns about the pricing power of a combined Blockbuster and Hollywood.
Shares of Movie Gallery surged $5.39, or 22 percent, to close at $29.45.
Escalating expenses overshadow earnings
Walgreen shares slipped yesterday as escalating expenses related to the drugstore chain’s digital-photo labs overshadowed a 13.7 percent increase in earnings.
The cost of converting its photo-processing labs to a digital format partly offset continued strength in pharmacy sales and a solid holiday shopping season at the nation’s largest drugstore chain.
Net profits for the December-through-February period were $490.9 million, or 48 cents a share, up from $431.6 million, or 42 cents a share, a year earlier, the company said yesterday.
Excluding a gain of $4.7 million from litigation settlements, Walgreen’s earnings were $487.9 million, or 47 cents a share — a penny below the average estimate of analysts.
Compiled from Seattle Times business staff, Bloomberg News and The Associated Press