The Buzz: May 21, 2001
Gateway, Juno Settle FTC Cases
Gateway and Juno Online Services got out from under federal scrutiny last week. The companies settled separate disputes with the Federal Trade Commission revolving around their disclosure practices to customers.
Gateway was accused of misleading customers in 1999 by failing to disclose that customers who bought a computer with the promise of free Internet access would be charged telephone fees for the Internet connections.
The FTC said that Junos ads for free Internet access failed to disclose connection fees and that Juno made it unreasonably difficult for customers to cancel the service.
Both companies agreed not to continue these practices.
Tivoli Head Steps Down
David Murphy is no longer heading up IBMs Tivoli Systems subsidiary.
Murphy joined Tivoli in 1998, holding a number of executive positionsincluding senior vice president of business groups and senior vice president of corporate developmentbefore taking over as president of the operation.
Murphy was overseeing the struggling IBM unit as it works to establish itself as a player in managing e-business infrastructures. Earlier this month, he presided over Tivolis introduction of a string of new tools and partnerships at its Planet Tivoli user conference.
IBM officials said Murphy was planning to take charge of a Silicon Valley e-commerce company. His last day at Tivoli was last Friday.
Ex-CEO Gets $375K a Year
George Shaheen may have stepped down last month as CEO of online grocery e-tailer Webvan, but it wont be his last contact with the struggling company.
Following through on an obligation written into Shaheens contract when he joined the company in October 1999, Webvan will pay Shaheen $375,000 a year for the rest of his life.
The money is part of a retirement package that was negotiated into Shaheens contract and equals 50 percent of his base pay and 50 percent of a target bonus, according to the company.
Webvan officials said the retirement package should not hurt the companys cash flow, even though Webvan last month shut down several centers and laid off 800 employees.