Feature

Cadbury’s Fizzled Sale, NBC’s Oxygen Intake

Cadbury Schweppes scraps its sale of Dr Pepper and 7-Up in favor of a spin-off. NBC Universal bets that Oxygen will help it attract more women. And Taco Bell makes a run for the border.

NEWS AT A GLANCE

Cadbury opts to spin off drinks unit

U.K.-based Cadbury Schweppes, the world’s largest candy maker, said it was spinning off its U.S. drinks business. Cadbury put the unit—which makes Dr Pepper, 7-Up, and Snapple—on the market in March, but the company changed tack after the slumping credit markets made a sale less lucrative. (Reuters) The drinks unit, with 15 percent of the U.S. soft drink market, is worth about $14 billion. It will be listed on the New York Stock Exchange. “This is positive because there’s some resolution,” said Martin Deboo at Investec Securities in London. Cadbury also said its confectionery revenue rose by 10 percent this quarter. (Bloomberg)

NBC woos women

NBC Universal is buying Oxygen Media, a female-oriented cable TV channel started in 2000 by Oprah Winfrey and two colleagues, for $925 million. NBC said that Oxygen, along with its recently purchased iVillage Web site, will create a “virtual women’s network” for 18- to 34-year-old female viewers. Rival channel Lifetime has an older female audience. (Los Angeles Times, free registration required) NBC is paying $12 for each of Oxygen’s 74 million subscribers, after paying $22 a head for Bravo’s 54 million viewers in 2002. “You would have to say NBC made a great deal,” said SNL Kagan analyst Derek Baine. (The New York Times, free registration required)

American pilots’ union plays rough

The new leadership of the American Airlines pilots’ union threatened American CEO Gerard Arpey with a “picket line,” as the airline starts negotiating new contracts with its three largest unions. The unions agreed to $1.6 billion in wage and benefit cuts in 2003 to help American avoid bankruptcy. (Bloomberg in Los Angeles Times) Now that the airline and its managers are faring better, the union says it deserves more than a rejected 31 percent pay increase, or it will see management “in court, in the newspapers, and on the picket line.” (AP in CNNMoney.com) The United Airlines pilots’ union elected a similarly confrontational group of leaders yesterday. (Chicago Tribune)

A Second Life on the go

IBM and Linden Labs, the operator of 3-D virtual world Second Life, are collaborating to make Second Life’s residents more mobile. Under the plan, the online avatars created in Second Life or another program would be able to show up, more or less intact, in different online services. IBM is attending a virtual-worlds conference that starts today in San Jose, Calif., as are Microsoft, Cisco, and Sony. IBM and Linden say mobile avatars will reward innovation in the fledgling industry, which hopes to be taken seriously as a business tool. “People will drain themselves away as fast as possible” from closed online realms, said IBM’s Colin Parris. (Reuters)

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