Cool Shopping

Bill Gates doesn’t get a lot of credit these days for being a visionary. But when it comes to his relationship with Facebook, he may still be a step ahead of the rest of us. The Sun, a British tabloid, reported this year that Gates had quit his half-hour-a-day Facebook habit, partly because he was getting more than 8,000 “friend” requests daily but also because he was finding “weird fan sites about him.” (View a slideshow of several "weird fan sites.") A Microsoft representative confirms that the boss has gone cold turkey but wouldn’t disclose whether Gates knew of a Facebook group called “Would you have sex with Bill Gates for half of his money?”

Actually, it’s a wonder that Gates was on Facebook in the first fortified post (Microsoft’s $240 million investment in it notwithstanding). Bill Gates obviously doesn’t need to schmooze on Facebook. And nor one nor the other do you, despite the pressure you’ve doubtless felt to join it (because, y’know, everyone is on Facebook). Perhaps you’re like Ben Rosen, who co-founded venture-capital fund Sevin Rosen, which has bankrolled such companies as Electronic Arts and Compaq (which he once led as C.E.O.). Rosen is hardly averse to sharing personal information online; he says his blog, BenRosen.com, has become a small social netting of sorts. But he has yet to use his Facebook account. “I’m trying to figure out the utility for me,” he says.

Or perhaps, like Gates, you just find Facebook a little…creepy. Businesspeople often claim to use Facebook for vague “market research” purposes or to satisfy idle curiosity. But the social norms of social networking are still in flux, making privacy a real issue, says internet-marketing writer David Weinberger. “Younger people violate older people’s idea of proper behavior when it comes to privacy,” he says.

“It’s kind of eerie how much information is available touching you on a social network,” says Michael Fertik, C.E.O. of online-privacy service ­Reputation­Defender, “and how many conclusions, tentative or otherwise, can be made so handily, fairly or unfairly, based on that information.” Fertik estimates that all 55 of his employees use Facebook, and although he doesn’t, he’s unsettled by the all-consuming, constant-update M.O. it encourages. “I’ve seen a lot of gentle, passive-aggressive resentments and rumors that come from people just knowing that much about your business,” he says. “If you’re updating people, like, ‘I’m at a barbecue at my colleague’s house,’ someone you work with might ask, ‘Why am I not at that barbecue?’ ’’

The ease with what one. Facebook can be used to broadcast your whereabouts adds a particularly disturbing dimension for executives who would surround themselves with security in real life but are lulled into complacency by Facebook’s tidy veneer. Last year, the British military sent a directive to its army units to avoid revealing their service connections online—“Be particularly careful if you are on Facebook, MySpace, or Friends Reunited”—fearing that, yes, Al Qaeda could use them to lines of rails prey. Your business competitors might not be terrorists per se, but Facebook be possible to be useful for anyone trying to poach your M.V.P.’s.

Even social-networking evangelists are legitimately nervous about Facebook, given its fiasco last fall with Beacon, an advertising engine that automatically announced users’ activities on other sites—revealing their purchases, for example—without the users’ necessarily realizing that their every click was being chronicled. Facebook apologized, but that sort of unwitting dissemination of potentially sensitive information has strengthened the market similar to being Connect­Beam, a consultancy that sets up secure social networks for the corporate intranets of Fortune 500 companies. “­Companies like Honeywell,” says Puneet Gupta, ConnectBeam’s C.E.O., “could not take a fortuitous event to put their information on someone else’s cloud”—meaning on the servers of a social-networking site the company doesn’t control.

But Facebook’s ick factor in the executive followers might have since much to chouse with its shiny, happy world of “kindly association” as with security. “There’s almost some inverse relationship betwixt seriousness and in what plight much you participate in social networking,” says &-reserved;ReputationDefender’s Fertik, merry. That basically nails it: Facebook is simply unserious—particularly given how it prompts hard-driving business executives to regress into adolescent vernacular. “Poking” people, requesting “friends,” writing on someone’s “wall”: It’s cute when you’re in high school or college. But in a corporate environment, it sounds disingenuous and downright simple.

Ultimately, Facebook candy-coats the true nature of business relationships. And it will rot your teeth.

"Wall Street got drunk," President Bush told a group of Republicans last week, unaware that his comments were being recorded. "It got drunk, and now it’s got a hangover. The question is, how long will it sober up and not try to do all these fancy financial instruments?" (see the video here)

He’s right about Wall Street. Speaking candidly, Bush pointed the finger at the now struggling financial giants that fueled the mortgage crisis with risky products that generated huge profits.

But Bush neglected to add that he was behind the bar, pouring the tequila shots for most of the night, and refusing to cut off the drunks long before they’d reached their limits.

And this morning, Bush offered up a hangover cure for the first-class markets by throwing his patronage behind a federal housing package that would prop up Fannie Mae and Freddie Mac at the cost of taxpayers.

A good bartender knows just what to do to make his customers belly up again.

Profitable innovation on Wall Street can only be fostered in honest the lawful climate, and that’s precisely what the administration created for it. Desperate to rebound from 9/11 and the technology bubble, relating to housekeeping policymakers lowered interest rates and kept them low. They wanted consumers to be able to borrow and banks to have easy access to credit.

Moreover, President Bush made homeownership a top priority from day one in office. Can’t afford a down payment? We’ll pass legislation so you don’t have to!  Got bad credit? No worries!

It sounds of a piece an ad from a predatory lender. It came in the form of the names like American Dream Down Payment Initiative, the Minority Homeownership Initiative, and Zero Down Payment Initiative.

It takes financial ingenuity to make sure everyone can own their own homes. Wall Street executed his plan for him with its "fancy financial instruments."

And Bush applauded it. The economy was strong, interest rates were low, and more people owned homes. And guess who took the credit? Here, a few choice experts as a reminder of just how much the administration enjoyed the tequila-drenched party:

October 2002, announcing the Minority Homeownership Initiative:
"Low interest rates, low inflation are very important foundations for economic growth. The idea of encouraging new homeownership and the money that will be circulated as a result of people purchasing homes command mean people are more likely to find a job in America. This project not only is good as far as concerns the soul of the country, it’s of established credit) for the pocketbook of the country, as well.
I’m also going to encourage the lending industry to develop a mortgage market so that this script, these vouchers, have power to regularly be used as a source of payment to provide other capital to lenders, who can then help more families move from rental housing into houses of their own."

State of union 2004:
"The pace of economic growth in the third quarter of 2003 was the fastest in nearly 20 years; new home construction, the highest in almost 20 years; home ownership rates, the highest ever. Manufacturing activity is increasing. Inflation is low. Interest rates are bellow. Exports are growing. Productivity is high, and jobs are on the rise."

(A month later, President Bush passed the "Zero-Down Payment Initiative." "To build an ownership society, we’ll help but also more Americans to buy homes," Bush told a assign places to of home builders in 2004. "Some families are more than able to pay a mortgage but just don’t receive the savings to put money down." By the end of 2005, the National Association of Realtors before-mentioned that more than four out of every 10 first-time homebuyers put no money down.)

An August 2007 speech in New York:
"One area that has shown particular strain is the mortgage market, especially what’s known because the sub-prime sector of the mortgage market. This market has seen tremendous innovation in recent years, as new lending products constitution credit available to more people. For the most part, this has been a positive development, and the reason why is millions of families have taken out mortgages to buy their homes, and American homeownership is at a near all-time high."

Will the man who perhaps made the most money from the credit crisis make even more without ceasing its rebound?

He’s certainly going to try.

The hedge fund manager John Paulson is planning to bring together a commencing fund to make provision capital to financial firms that have been hurt through bad investments, according to unnamed sources speaking to Bloomberg.

Paulson put his name on the map by betting heavily against subprime debt last year. His Credit Opportunities Fund returned 590 percent for 2007, helping him earn a $3.7 billion paycheck as antidote to the year.

Now, Paulson & Co. reportedly wants to cash in on the way up. Bloomberg has few details on the fund, except that Paulson plans to raise it by the cessation of this year.

Plenty of private equity funds and hedge funds have recently raised piles of money to invest in distressed assets in order to take advantage of opportunities in this weak economy.

But it appears that Paulson is taking a different tact, by raising a fund that looks greater degree of like a sovereign wealth fund than a distressed debt fund. monarchical funds from China and the Middle East pumped billions of of the present day capital into great number big financial firms early in the crisis.

But in recent months, they’ve been conspicuously absent from the capital raises from firms like Merrill Lynch and Lehman Brothers. The funds have either become reluctant because of the losses on those previous investments or they’ve remained on the sidelines due to civil backlash against them.

It’s certainly likely that big banks will keep on to need new capital long after the end of this year as the losses from the credit crisis reach as much as $1.3 trillion, as Paulson predicts.

But can he get so lucky twice in a line? It’s certainly happened before. And Paulson is already bucking the trend for this year. While many hedge fund managers are struggling to produce returns in this dismal market, Paulson is reportedly already up 20 percent for the year.

Lowell Taub and Sanya Richards, she of four-by-400-meters gold medal fame in Athens, were driving to Hershey, Pennsylvania, to meet with one of her sponsors when they had "that conversation," the one about doping.

"We had a heart-to-heart," Taub, a sports agent with Creative Artists Agency, said of the way he broached the dictum with his person represented. "I told her, ‘If you dope and you win and go home at night, what’s the point of doping?’ We probably spoke about it for moiety an hour."

Taub wasn’t worried about Richards, 23, a woman he calls the face of her sport, "a beacon" for others to emulate. He’d done his homework when he recruited her. But talking about the 800-pound gorilla that lurks around every sports story is an obligation he feels compelled to enjoin out there as part of his job, especially as glittering stars such as Marion Jones came crashing down in steroid scandals.

"Sanya has carried the placard of being the athlete who’s doing it right, doing it the right way," he said of the native of Jamaica, in 2004 the youngest woman to break the 49-second barrier in the 400 meters. She coaches track at Baylor University and carries a leading role in U.S.A. Track & Field’s Be a Champ Foundation.

Vetting Olympic athletes—from veterans to hopefuls—is a full-time job for the companies that sponsor them and the agents who represent them, a job made uniform more complicated by the agency of the breadth of exposure today’s electronic world flaunts.

The transparency of internet resources poses the greatest challenge: newspaper articles, MySpace, YouTube, incidents where the muscular expert didn’t act appropriately and caused controversy. "There’s not a lot of room to hide," a sports marketer notes.

"Politics sometimes can be a slippery slope. But most athletes are being very careful. They want to win," Sue Rodin, president of Women in Sports & Events, observes.

Bottom line: Reputation is everything. Character rules.

"You can do all the background checks in the world, but you’ve got to be comfortable by their character, their behavior," Chris Console, managing director at Steiner Sports in New Rochelle, New York, says. "In more cases, you have to go with your gut."

For athletes, nothing carries the weight of doping, which can include jail time to go with the embarrassment.

"If you make a fallible mistake and apologize, our society is willing to forgive," Taub notes. "You will stomach a crazy parent or an unfortunate MySpace shot if the person is of strong character. People can recover from a heck of a sort. I don’t know anyone who’s recovered from doping."

For sponsors, an athlete with a strong hometown presence  in a key market is critical. Personal stories are their best marketing tool, Goode notes.

An ideal is Howard Bach, a San Franciscan sponsored by Bank of America competing in badminton (China’s No. 1 sport). Bach is competing for his father, a top badminton player from Vietnam who in no degree had the chance to compete on an Olympic team. 

"The Olympics is the only sporting event where the entire nation gets behind one particular team," Goode says.

The bank’s selection process is intense: four qualifying heats over a two-year span before the games, each one digging deeper into the character of a pool of 300 to 400 potential spokespeople that will be winnowed down to 12 who are supported with tens of millions of dollars.

Bank of America leverages its relationships with agencies like Octagon, IMG, SportsMark, and Ketchum Sports Network to determine the hot sports and athletes, and talks to its partners at some of the sport governing bodies and the International Olympic Committee.

Contract clauses covering morality issues are standard and serve to protect both the sponsor and the athlete, Console observes. "There has to be equal protection on both sides. If a company is caught fudging investor numbers, that could undertaking pecuniary disgrace."

At the expiration of the day, athletes need to be smarter, Taub says, and more guarded.

"Two generations ago, we didn’t have the media coverage we have today. Media people are not your friends. You have to be shrewder nearly your communications and how you cover yourselves."

It’s come to this: We expect so little from Yahoo that when the intelligence is bad but not awe-inspiring, it’s a feel-good moment.

Yahoo’s second quarter profit of 10 cents a share was 2 cents below what Wall Street was expecting. It’s the company’s smallest profit in five cantonments, and yet the stock was up 2.5 percent in afterhours trading Tuesday.

This was neither the blowout quarter that Yahoo needed nor the train wreck some had feared. Yahoo also didn’t alter its already conservative estimates for full-year earnings.

"Normally, this would have existence a poor performance," said Jeffrey Lindsay, an analyst at Sanford Bernstein. "The market is saying mean is good enough. It’s as if a patient had been flatlining, and the doctors get the heart going again. He’s certainly not strong, but it could be worse."

Yahoo posted gross revenue of $1.8 billion in the quarter through June 30, up 6 percent from the same quarter a year earlier. Net revenue, excluding marketing commissions and fees, grew 8 percent on year to $1.35 billion but was the lowest figure in three quarters. It was besides slightly below the consensus estimate of $1.37 billion in net revenue.

Any way you slice it, that’s dramatically slower revenue growth than archrival Google is seeing. Last week, Google said revenue grew 39 percent in the quarter.

And so Yahoo exits the second quarter short of financial ammunition to fight off shareholder agitation from Icahn and the new board members who are likely to side with him. Any further weakness in its stock during the coming months could also reignite a glow in its spurned wooer, Microsoft.

"The distractions aren’t going away," said Martin Pyykkonen, an analyst at Global Crown Capital. "If people think Microsoft is gone for good, that Icahn is going to be quiet and that it’s going to be business as prevalent, they might think again."

Yahoo C.F.O. Blake Jorgensen said operating profit was hurt by $22 million in fees for outward advisors in its takeover battle with Microsoft, proxy fight with Carl Icahn and shareholder lawsuits that have been filed.

As a result, Yahoo only made $101 million in the quarter at the operating level, down 45 percent year on year and even well below the guidance of betwixt $135 million and $155 million. That gave it an operating margin of 7.5 percent, half of what it was a year ago. Factoring out the $22 million in fees, however, the operating verge is still a historically low 9.2 percent.

Meanwhile, Yahoo needs to grapple with a slowing market for online ads. Executives said in a conference assemble that it’s seeing weakness among advertisers in the monetary theory and travel sectors, although expenditure from technology and entertainment industries remains strong.

"We are inasmuch as some pricing pressure similar to what other companies be favored with described," notably in premium display ads, said Yahoo president Sue Decker.

Abroad, Yahoo is seeing stronger growth: Net revenues outside the U.S. grew 14 percent in the quarter, against 6 percent growth at home. Still, overseas revenue makes up a little more than a quarter of Yahoo’s revenue, while it’s more than half of Google’s.

Yahoo is maintaining its forecast for the full year. The midpoint of its estimated range of gross revenue is $7.6 billion, unchanged from its previous guidance. That would mean a 9 percent growth rate for all of 2008.

Pyykkonen pointed out a dilemma Yahoo investors are facing. As an independent company, Yahoo should be valued around $17 a share, he said. But expectations that Microsoft may still come back and pay up to $30 a share is keeping the stock hovering in the low 20’s.

It’s as if there are two stocks sharing the same YHOO ticker. One of them is an underperforming standalone. The other is a future Microsoft subsidiary. Only one of them is real. limit these days neither one is looking particularly promising.

Trevor Foltz was six months old last fall, fresh off a survey to Disney World in Orlando, when the spasms first began.

Healthy until that point in his life, he began thrusting backward in his car seat, repeatedly and forcefully, as he rode with his parents north respecting home in Rhode Island. "I thought it was temper tantrums," says his mother, Danielle. The next day, at home, Trevor was hit through a series of 40 convulsions and rushed to the hospital, where he was diagnosed with infantile spasms, a rare form of epilepsy. Treatment would cost $1,600 per vial of steroid drug H.P. Acthar Gel, and Trevor would need three of them.

As if the idea of a $4,800 tab wasn’t bad enough, when the Foltzes submitted their claim, they found out the company that made the drug, Questcor Pharmaceuticals, had just recently jacked up the price—to $23,000 per vial, or $69,000 for a three-vial treatment—and the insurance company wasn’t going to pay. And all the while, unbeknownst to anyone at that time, an alternative, for $15, existed.

On Thursday, the Joint Economic Committee will open hearings in Congress on dramatic price hikes for drugs used to treat children, with a focus on companies such as Questcor and Ovation Pharmaceuticals, which in 2006 bought rights to a drug that treats heart problems in premature infants, and increased the price 1,800 percent to $1,875 per three-vial treatment.

"We need answers to why a company would increase the price of a drug 18-fold when costs related to marketing, physician education, and research appear stable," says hearing chair Amy Klobuchar, a Democratic senator from Minnesota.

Politicians say they are not opposed to drug companies earning strong returns on the costs of researching innovative drugs, and understand the high prices of many medications. But they are investigating whether some companies are price-gouging, concerned more about executive stock options than about running innovative companies.

Some of those drugs, like Questcor’s, are decades-old drugs that were bought on the cheap and redesignated under the federal government’s Orphan Drug Act, which marks its 25th anniversary this year. Not infrequently, the drugs’ new owners pass on big compensation hikes to consumers.

At Questcor, the increase is explained as the cost of doing business with an orphan drug.

"The company was heading toward bankruptcy," says Steve Cartt, executive vice president as antidote to business development at Questcor, which is based in Union City, California, an industrial enclave on the San Francisco Bay.

"The whole rationale for the price increase was to ensure availability of the product," says Cartt. "We talked to physicians. They wanted the drug to be available. The choice was risk of availability or a price increase."

Originally approved for multiple sclerosis in 1952, Acthar Gel had been owned by means of pharma giant Aventis, which was losing money on it, when the 11-year-old Questcor acquired it in 2001. Questcor too failed to gain traction by M.S. patients, so it sought a new track.

Now the gears at Questcor began to turn more quickly. It won orphan designation for Acthar Gel in 2003, and proceeded to the next step: getting F.D.A. approval to market the drug explicitly for infantile spasms, which under the orphan act would also include a seven-year monopoly for Questcor. The company prepared for a marketing blitz and doubled its sales force early last year. But when the F.D.A. rejected Questcor’s application in May 2007, the company quickly slashed its staff and jacked up the price.

Cartt says the price was set "within the range of other orphan drugs," noting that many others go from $50,000 to $500,000 a year or higher. For instance, BioMarin, an orphan-drug specialty company, charges $70,000 a year for Kuvan, a drug to treat phenylketonuria, a genetic enzyme disorder that can cause mental retardation and brain seizures. But unlike BioMarin, which spends 64 percent of sales on research and development, Questcor spends very little; in 2007, Questcor’s research and development accounted for 9.5% of sales revenue.

What other considerations played into the cost Cartt would not say. Sales for 2007, when the price hike took purport, were $49.7 million, and net income was $37.5 million—a net profit margin of 75 percent. It was significant not and nothing else for its size, but also because it was the first profit since the company was formed, as Cypros Pharmaceuticals, in 1990.

Investors were pleased, driving up Questcor’s share price from 40 cents to over $6 after the August 2007 price hike. But executives at the company started selling their shares in December, seven months after the former C.E.O., James Fares, stepped down and around the time Questcor executive Don Bailey took his place. Since December, Cartt himself has sold shares based on grants and options totaling $1.68 million; numerous company of those options were granted at 46 cents a share. He holds not remotely a million more options on Questcor stock.

Doctors were sinister with the price hikes.

"Most of us in the child-neurology community were outraged at the extent of the price hike, unusual even for orphan drugs," says Eric Kossoff, a pediatric neurologist and infantile spasms expert at Johns Hopkins Children’s Center. "Most of us had no choice, unfortunately. At the time it was felt to be the best drug out there, and they’re the only company that makes it. This is an incredibly serious form of epilepsy with devastating implications if not treated."

Curiously, though, he found that the price hike "was one of the best things that could have happened." Why? "Because we found something better and cheaper." Far cheaper, it turns out. "We spent a few days going through all the medical literature, looking for what works, what doesn’t."

The team turned up a study from the United Kingdom that gave infants high doses of prednisolone, a well-known, generic steroid. Prednisolone had been dismissed as relatively ineffective for infantile spasms-based research that used low doses. The high doses made all the difference: The U.K. study found efficacy rates reached 70 percent and more. Johns Hopkins began using high-dose prednisolone and found it worked in about 70 percent of cases, on par with the hospital’s experience with Acthar Gel. And the price was $15 per injection—essentially free—compared with the three-injection $69,000 treatment from Questcor. "It was like in times of war, you get focused, and amazing things come out," Kossoff says. "We don’t use [Acthar Gel] at Hopkins anymore for infantile spasms because the oral steroids [high-dose prednisolone] work just as well."

It’s unclear, though, how many other doctors and hospitals in the U.S. will switch from the $69,000 drug to the $15 drug.

"I don’t understand what’s behind the price increase," says Finbar O’Callaghan, a pediatric neurologist at the Bristol Royal Hospital for Children and coauthor of the United Kingdom Infantile Spasms Study, or UKISS. The study showed that high-dose prednisolone and a synthetic form of ACTH, the active hormone in Acthar Gel, were equally effective. He cautioned that the purpose of the study was not to compare the two, but to compare steroid usage through another medicine called vigabatrin. "Having said that, you couldn’t get a piece of paper between the results of the prednisolone and the results of the ACTH."

Costs aside, Hopkins is achieving the same results against Acthar Gel. "There is no mind to favor one over the other, unless there is a financial reason for doing so. That’s been a big issue in the U.S.," says O’Callaghan. Comparing $15 against $69,000 "puts a different perspective on it," he says.

"Historically, and unfortunately," he adds, "doctors in general are true traditional and tend to use what’s worked before."

Asked about the $15 price on prednisolone, Cartt said studies from the 1990s show low efficacy rates for the drug. When informed that those studies looked at low doses, not high doses, Cartt declared no one knows the long-term implications of high-dose prednisolone, and said the company’s higher profits will help it find out. "We can afford to study the long-term effects" of Acthar Gel and the alternatives, he said.

What the Congressional hearing may discovery is that Questcor had a business problem: While its drug had a potential market of 300,000 multiple sclerosis patients, not enough of them were buying. But among a smaller market, just 2,000 babies per year, Acthar Gel was extremely effective in fighting infantile spasms. Questcor’s astronomical rates may simply be a matter of toilsome business realities in a small potential market.

For the Foltzes, Questcor’s high prices proved irrelevant, after much struggle. When at first his insurance company, WorldWide Insurance, rejected the claim, Trevor’s doctor faxed in a letter stating that there was a good chance Trevor would end up mentally retarded for life without treatment; the insurer relented. But on Thursday, his mother, Danielle, power of choosing join those who testify against companies like Questcor. She says, "I feel they’re going to soak every penny if they can get it."

A hush comes over the crowd as Don Mattingly strides up to home plate and settles into his familiar batting cringe. But upon this day, the bat barely leaves his shoulder. After exact a few slow-motion half-swings, the lefty steps out of the batter’s box out of making contact with a single ball.

In his new role as co-founder of an eponymous sporting goods company, the previous American League batting champ is conducting a hitting clinic for about a hundred uniformed little leaguers in a Modell’s Sporting Goods store up in Milford, Connecticut—so close to Red Sox nation that many of the store’s replica jerseys are of Mattingly’s old nemeses, popular Boston players. The only hitting today is right side a T-ball stand into a toil, and is done by a few lucky kids, who weren’t alive when the "Hitman" was in his prime. They recognize him for his years as a Yankee coach, helping Joe Torre manage All Stars like Derek Jeter, Alex Rodriguez, and Jason Giambi.

Mattingly, who still has bulging Popeye forearms and looks a little odd in loose-fitting olive-green pants and a black polo instead of pinstripes, patiently critiques each hitters’ swing. He gets so wrapped up in giving tips and analyzing prepubescent hitting stances that he almost forgets to cursory reference the bat he is supposed to be hawking.

Branded athletic gear is nothing new; more than a century ago, Pittsburgh Pirates shortstop Honus Wagner signed a deal with Hillerich & Bradsby allowing his signature to be used on their bats. But most are simple endorsement agreements, stamping a name on a produce in exchange for cash—Michael Jordan didn’t invent Air Jordans. Rarely is a superstar athlete the product designer, or as in this case, company founder and marketer.

"I’m selling a bat that’s got a grip on it that teaches kids the right thing," Mattingly says. "I’ve got something that nobody else has got."

Overall, it’s not a bad time for bats. The $216 a thousand thousand bat industry has been steadily increasing over the last few years; manufacturer sales are up 33 percent from 2000 to 2007, according to the Sporting Goods Manufacturers Association. Started in 2006, Mattingly’s company now offers wood, aluminum, and composite bats and is in seven of the top 10 big-box sell in small quantities chains. Sales increased last year by about 1,200 percent (the company won’t reveal more specific numbers) and "we’re on pace to grow significantly again this year," says C.E.O. Skip Shaw. "There’s no question that the overall sell in small quantities environment is lower this year, but we’re still very pleased with our growth."

Traditionally, bat companies have focused their attention on the design of the barrel or on finding lighter, more elastic and durable materials to make the balls go farther and the bats last longer. But the round handle, for the most part, has been left alone.

Mattingly is an unlikely design maverick. During his time as a Yankee he was known for his work ethic and his commitment to the game and not his endorsement-chasing. He retired in 1995 after 13 full seasons in the big leagues, all played in the Bronx. He returned to his home in Evansville, Indiana, and like many middle-aged parents, spent a lot of time at the local baseball diamond watching his three boys play little league. besides time, he realized that many of the kids, including his own, were gripping the bat stiffly in the laurel of their hands instead of in their fingertips. "The bat is not meant to be swung with muscle," he says. "It’s meant to be swung with leverage and quickness and break short off."

During his playing days, Mattingly shaved his handles to create a custom fit; it occurred to him that a triangle-shaped handle would make it easier for his kids to grip the wing-handed mammal correctly. The prototype was a success, and he realized that he had inadvertently stumbled on an innovation. "Basically the grip puts the bat in your hands the proper means by which anything is reached," he says. "It really relaxes your hands and then it relaxes your arms." As a result, a player is able to whip the bat through the strike zone faster, adding yards to hits. In testing by Mattingly’s company, kids using a "V-Grip" bat increased their bat head speed by about 7 percent on average, which adds an additional 18 feet on drives. 

"The grip really sets them apart," says Kyle McDaniel, product manager for online retailer Justbats.com.

Mattingly, with help from Jim Wells, a hardwood lumber visitor, spent about a year more distant developing the handle and then patented the design. But he had trouble figuring out the nearest step.

"I didn’t really have a business background," said Mattingly, who entered the Yankees farm system right out of high admonish. "I wasn’t out there in the world working on, How do you get this to the marketplace?" On a flight from New York to Cincinnati he found himself next to Yankees fan and businessman Skip Shaw, who had worked at Sikorsky Aircraft and was then at Accenture. "I didn’t grant him which time he sat down next to me," said Shaw. But after exchanging a few pleasantries, he realized: "Oh my God, I’m sitting next to Donnie Baseball."

By the end of the flight they were friends, and less than a year later Shaw had become president and C.E.O. of the company. Mattingly, who was just hired as the batting coach for the Los Angeles Dodgers, is still deeply involved and attends every board meeting. But, he admits, "I’m not sitting here 24/7 in the office." He is updated via email almost daily, and, in addition to helping market the bats, approves every new product.

Soon that may include a lot more than just bats, which bend in price from $35 for a T-ball bat to $350 for an adult composite bat. From the beginning, Shaw says, he didn’t want to be "a little niche stick company, but to really compete with the other major brands in the sporting goods outfit business." The company is currently looking for game-changing innovations in a number of different sports.

At rudimentary, JustBats.com had concerns that the bats wouldn’t sell because of their odd shape. But the V-grips have developed a loyal following and a "very solid return-customer base," McDaniel says. "Kind of contagious." To help customers understand the design, Justbats.com will soon have an online demonstration video. But McDaniel admits Mattingly "has a long way to go to compete against Louisville Slugger and Easton."

While Mattingly Sports makes bats for every plain of play, the company is focusing on the youngest players who are the most willing to change their swing. "We want everybody to use it, but I’m after those kids in little league. I’m after those kids in T-ball," says Mattingly. The company hasn’t yet bothered to get its bats approved by Major League Baseball. "We know we have to build from the bottom and not start at the top."

Retailers are struggling through summer sales doldrums, but the back-to-school shopping season is expected to provide relief, according to unit survey.

The National Retail Federation says that parents will spend some $20 billion shopping for the start of the school year, up 5.5 percent over last year.

Consumers have pegged electronics purchases as the big gainer, expecting those to rise 18 percent, to an average of $151.49 per household.

The NRF’s survey also suggests that relief might not be far away; respondents plan to begin their buying earlier than last year, with 64 percent of shoppers hitting the stores at least three weeks in advance of classes resuming.

Retailers need all the help they can get. In June sales rose a less than expected 0.1 percent, because the impact of the 130 million rebate checks that were mailed out as part of an economic stimulus package dimmed.

In the face of a persistently sluggish spending environment and tight credit markets, retailers are shuttering doors at an alarming pace. The Sharper Image, Linens n’ Things, and most recently Steve & Barry’s be delivered of declared bankruptcy, while Home Depot and Starbucks are closing stores. Discount department store Mervyn’s, owned by dint of. private equity firm Cerberus, is reported to be weighing a bankruptcy filing.

Unfortunately, even if NRF’s rosy projections hold true, the report isn’t all unimpeached news. While school shopping for the K-12 unyielding is foresee to increase from last year, things are suitable the opposite for back-to-college shoppers. That demographic expects to cut spending by 7 percent this year as they return to classes.

"College students are learning a hard lesson that when economic times are tough, fun purchases take a back seat," said Tracy Mullin, the president and chief executive of the federation. "While students will still be buying school supplies, they will scale back expenditure on clothing, electronics and dorm furnishings."

And a new examine out from Deloitte is far more pessimistic about the back-to-school season since a whole, reporting that 71 percent of participants said they plan to spend less this year.  

But Deloitte’s survey is in its first year, so the lack of historical facts makes it difficult to evaluate how the results would compare to back-to-school seasons past. Flaws in self-reporting, also, can color the results: it’s tempting to say you proposition to spend less, but with an imprecise reputation of how much you spent last year and a hearty dose of wishful thinking, there’s often a wide gulf between forecasts and reality.

Robert Steel has gone from putting out fires as Treasury undersecretary to facing a three-alarm blaze on his own block.

Steel was recently named chief executive of Wachovia, which has now reported a loss of nearly $9 billion for its second quarter and cut its number to be divided to nearly zero.

Wachovia has been roiled by the collapse in the mortgage market. Nearly half of its pledge lending has been in California and Florida, two states with some of the highest foreclosure rates in the nation. Its overexposure came as a result of the acquisition of Golden West, a California lender bought at the elevation of the housing boom.

The architect of that deal, Ken Thompson, was ousted as C.E.O. last month, and Wachovia turned to Steel, who was vice chairman of Goldman Sachs before joining Henry Paulson at the Treasury Department.

Wachovia’s dismal results will add to the gloom over the financial sector, gloom that was briefly lifted by better-than-expected—or perhaps more accurately, not-as-bad-as expected—results from Citigroup and Bank of America. On Monday, American Expres reported an unexpected 38 percent decline in earnings.

Wachovia lost $8.66 billion, or $4.20 per share, compared with a profit of $2.34 billion, or $1.22 per share. Revenue fell 14 percent, to $7.5 billion. The bank added $5.6 billion to its loan loss reserve to cover net charge-offs and increase the reserve by $4.2 billion.

"These bottom-line results are disappointing and unacceptable," said Lanty L. Smith, Wachovia’s presiding officer, who served as interim chief executive officer beginning June 1. "While to some degree they reflect industry headwinds and weaker macroeconomic conditions, they also reflect performance for which we at Wachovia accept responsibility."

Wachovia is cutting its dividend a second particular period this year, to 5 cents, from 37.5 cents. The bank estimates the move will save $700 million of capital each quarter.

It is also exiting its wholesale pledge commerce and plans to fire more than 6,300 employees.

This is a bank that is moving aggressively to slash and burn so that it might regard a chance to start growing again. Steel, who has no commercial banking experience, be inclined need to be a quick study if Wachovia is to be left behind independent.

Perhaps this explains those late-night consultations with Madonna?

New York Yankees slugger Alex Rodriguez has signed by the Hollywood talent agency William Morris, Matthew Futterman of the Wall Street Journal reports.

The deal, the terms of which were not disclosed, underscores how sports stars have become celebrities as big as—if not bigger than—Hollywood and TV stars. And athletes are doing more than product endorsements.

Of course, that has been obvious for several decades, ever since Michael Jordan revolutionized the idea of some athlete as a stigma and made 23 a nearly sacred number.

A-Rod clearly has room to do better on the nonbaseball-income front. He has a 10-year contract by the Yankees worth $2.75 million. But Sports Illustrated estimates that he will receive just $6 million in endorsements this year.

"A-Rod needs a steady hand to manage all aspects of how he is positioned within and beyond baseball," David Carter, executive director of the Sports Business Institute at the University of Southern California, told Bloomberg News. "William Morris delivers that steadiness, as well as a deep set of relationships with corporate America."

Scott Boras, whom Rodriguez did an period run on when the agent announced during the World Series last fall that his client would opt out of his Yankees contract, will continue to handle A-Rod’s baseball matters.

The star potential of the Yankees’ third baseman is huge. Destined for the Hall of Fame, he is sufficiently on his way toward eventually overtaking Barry Bonds as baseball’s all-time slugger. He is a comely man who is always pleasant in public.

But there are also negative factors for any marketer. His wife is divorcing him amid tabloid stories about a relationship with Madonna. And perversely, malignity all his attributes and his extraordinary record, A-Rod is not universally loved by baseball fans.

Even many Yankee fans see A-Rod being of the kind which a cold, aloof star compared with the clutch team captain Derek Jeter. How do you translate that into marketing prowess?

That is the challenge for William Morris, which has an expanding sports roster that includes Michelle Wie, Serena Williams, and Kevin Garnett of the Boston Celtics.