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Companies Set To Report Their Quarterly Earnings, Whispers Of Dow 10,000; Companies Begin To Cater To Obese; Politics Of Choosing Pope's Successor

Aired October 19, 2003 - 15:00   ET


ANNOUNCER: From New York City, America's financial capital, this is IN THE MONEY.
SUSAN LISOVICZ, HOST: Welcome to IN THE MONEY, I'm Susan Lisovicz sitting in for Jack Cafferty.

Coming up on today's program: How to pick a pope: As John Paul II marks his 25th anniversary, we'll tear the veil off of Vatican politics involved in choosing his successor.

Plus hefty profits: Catering to the overweight is a growing business. Some say it's a big business as America bulks up, from fun to funerals. We'll have the details.

And, more miles for less moola: Virgin boss Richard Branson tells us about his plans to shake up the budget airline business.

Joining me today a couple of IN THE MONEY veterans, "Fortune" magazine editor-at-large Andy Serwer, and CNN correspondent Christine Romans.

And, as we get into the workweek, I hate to say it, we have to have the calculator, the green eyeshades, and our eyes will be crossed.


CHRISTINE ROMANS, CNN CORRESPONDENT: And an eraser. It's earnings seasons. You know, 100 and some companies are going to report this week, maybe even almost 200 companies -- Tuesday will be a huge day for earnings. And, earnings -- this is what drives the stock markets, folks. This is supposed to be the No. 1 impetus for why to buy or sell stocks. Looking like it's going to be a good season.

LISOVICZ: Well, it's been great so far. The people who calculate it say 64 percent of the companies in the S&P 500 who've reported, have beat an on average 7.5 percent, they've beat, and which is more than twice what they usually do.

ROMANS: And the profit growth is like 17 percent. That's the real important thing.

SERWER: Where's the people with the slide rules? The one thing about it, though, is that I think this market has been bid up in anticipation of this. That's why I wouldn't look for the market to take off on the news, because people have already priced it into the stocks.

LISOVICZ: But, some folks have actually whispered, DOW 10,000.


ROMANS: Oooh. Where's my hat? I have a hat that says that.

SERWER: Really? Bring it out.

LISOVICZ: I do too. Bring it out of the closet.

OK, now, let's saunter on to the Vatican. Pope John Paul II, this week, marked his 25-year anniversary as head of the Roman Catholic Church. And, although he's frail and battling Parkinson's disease, the pope indicated that he plans to hang onto his job for a while. Walt Rodgers joins us now from the Vatican with more.

Hi, Walt.

WALT RODGERS, CNN CORRESPONDENT: Hi. Well, I guess the ultimate question, Susan, is what's next for Pope John Paul II and the answer seems to be "god only knows." I hope that's not too flip, but the pope on Thursday, at his homily during his 25th anniversary celebration in St. Peter's Square, said god had told him that he wanted the pope to continue to lead the flock, that is nearly 1 billion Roman Catholics around the world. Vatican officials have told CNN within the course of the last year that the government is -- of the Vatican is virtually paralyzed because of the pope's infirmity. So, in one sense, the Vatican has been on autopilot for some time, in another sense, however, all of the officials in the Vatican know this pope's philosophy and ideology, so they do what they believe he wants done anyhow -- Susan.

LISOVICZ: You know Walt, it's interesting. I mean, the fact that the pope is frail is hardly news, that's been reported for years. There's no suggestion that he is not mentally alert, correct? I mean, he is still very much following what's going on in the world?

RODGERS: Well, look. He's got Parkinson's disease. It's a neurological disorder. It's degenerative and one of the facets of that disease is that it kills brain cells. Now, everyone...


...if the pope could no longer communicate in any way, then he thought that retirement was not out of the question, retirement abdication, whatever. We're not at that point yet, but this pope is in very frail health -- Susan.

LISOVICZ: Another at a very important and historic milestone for the pope. Walt Rodgers joining us from Rome. Thank you, Walt.

ROMANS: A pope's beliefs and decisions have an impact, not just on the church, but the world, and they affect us whether we're Catholic or not. For looking at the process of choosing a pope and how it has changed under John Paul, we are joined by Father Thomas Reese. He is the editor of "America," the Catholic weekly magazine and the author of "Inside the Vatican."

Father, welcome to the program.


ROMANS: Let's talk a bit about the impact John Paul has had on the process of choosing a pope in the Vatican. He has had a phenomenal impact just on the cardinals and this process. Tell us about it.

REESE: Well, of course, the most important impact he's had is that he has appointed all but five of the 135 cardinals under the age of 80 who will be the ones who choose his successor. So -- and he's done exactly what you or I would do, if we were pope, he has appointed people who are in basic agreement with him on the major issues facing the church.

LISOVICZ: Right, but one of the things that the pope has specifically done, father, is to eliminate the two-thirds majority, if I'm -- if I understand it correctly. In other words, there's a certain period of time where the next pope would have to draw two- thirds of the vote by the cardinals.


LISOVICZ: And, if not, then the majority would simply, then succeed Pope John Paul, is that correct?

REESE: Yes. For 800 -- more than 800 years of church history, the cardinals have been involved in the election of the pope and the process has -- in the past has always required that the winning candidate get a two-thirds vote of the College of Cardinals. John Paul II changed that. It's required that a candidate get two-thirds vote if -- if he doesn't within the first 30 ballots, which would take about two weeks, then the cardinals can vote by a majority to suspend that rule and elect a pope by a majority vote. This is -- this is a revolutionary change in the process for electing a pope.

SERWER: Father Reese, you talk about revolutionary change. There's been a lot of talk in American institutions about making them more open and more transparent. A lot of people have charged that the hierarchy of the Catholic Church, particularly the Vatican, particularly when it comes to the finances is rather secretive. Do you see that changing?

REESE: Well, I think that there's begun to be a little more openness with regards to this. There is a financial report of the "Holy See" that is sent out to all of the bishops in the world. It's a complicated document. I -- frankly, I don't think most of the bishops understand it. But they have -- Cardinal Szoka, for example, has brought an American who works in the Vatican -- brought a lot of American managerial skills and accounting procedures to the Vatican. So, the Vatican finances are much better run than they were before John Paul II became pope.

REESE: Father, we still want to talk a bit about how this church is changing. Over the past 25 years under his tenor, a lot has changed in -- you know, American and global society. A lot of talk about how the churches in Europe are artifacts and monuments and the living growth of the Catholic Church -- or the growth of the living Catholic Church, is in the third world, is in Central America and South America. Can you tell us a little bit about how John Paul and how the Vatican, over the past 25 years, has addressed these changes, the changing of American and global society?

REESE: Well, clearly, in the Catholic Church, we see great growth of the church in Africa. That's where the church is growing primarily, through conversions. In Latin America, we see some decline because of inroads by Evangelicals and Pentecostals. In the United States, we've seen a lot of growth in the Catholic Church through immigration: Hispanics, many of the Asians coming, Vietnamese coming to the United States, in the past 25 years have been Catholics. And, we also see a large number of people joining the Catholic Church every year. So, you know, we have these dynamics going on all over the world.

LISOVICZ: You know, Father Reese, I have read about prior elections, if you will, of the papacy, and they put the U.S. presidential campaign to shame in terms of some of the spectacle that's been reported over the ages. Right now, we have the hundreds of the cardinals congregating in Rome for this tremendous milestone, the pope's 25th anniversary. Is there any secret campaigning going on right now? Because the election itself is actually done in silence?

REESE: Yeah. It's a very strange election process for us who grew up in an American democracy, there's no announced candidates, there's no campaign speeches, there's no platforms, there's no bumper sticker, no TV ads, nothing like that. You know, the real politicking goes on over late night dinners, over a bottle of wine late into the evening when the -- you know, two or three cardinals get together and talk about it. In fact, it's forbidden to have any kind of open campaigning for pope. And in fact, it would be counterproductive. Anyone who campaigned actively to become pope would be considered too proud, too ambitious for the job. And you're correct, when the cardinals actually gather together for the election it's behind closed door, locked. Their cell phones will be taken away, no telephones, no TV, no internet, no radio, no newspaper. Totally isolated, so that they are simply focused on the election of a pope and there will be no leaks from the conclave out to the media, nor will there be influences coming in.

SERWER: OK. All right. Thank you very much, Father Thomas Reese. We're out of time.

Thomas Reese, editor of "American" magazine and author of "Inside the Vatican."

Ahead on IN THE MONEY: Big business. We'll tell you about the growing demand for products that cater to plus-size customers.

Also, coming up, that's the ticket: Virgin boss Richard Branson shook up the air travel business and now he's getting ready to do it again. Plus, at ease, soldier: A new magazine is going after demographic group a lot of businesses miss, the American serviceman. We'll have the details on "Drill."


ROMANS: As the average American's waistline gets larger, so do the number of companies looking to cash in on the trend. 65 percent of Americans are now considered overweight and they don't seem to be getting any smaller. Last year alone, clothing retailers sold $17 billion worth of plus-size apparel and that's the beginning.

Allen Wastler, managing editor of CNN "" and our webmaster, joins us now to give us the skinny on the businesses that we are getting fat on the very overweight.

ALAN WASTLER, MANAGING EDITOR "MONEY.COM": All week have been surfing on this bad boy. OK? You know, just checking out...

ROMANS: This big bad boy.

SERWER: Fat bucks.

WASTLER: You know, $17 billion, and that's just the clothes part, OK? And, other areas are getting into it, but if you look just for the clothes. You know, you have basically two different outfits going after this, there's -- you know, general retailers -- you know, you, your Sears, Kmart and everything, but -- you know, they carry plus-sizes, as well.

ROMANS: Plus size.

WASTLER: But, not as -- you know, in-depth as, like say, maybe big Casual Male and tall (SIC) or Layne Bryant.

SERWER: Lane Bryant. They're coming back.

WASTLER: Which, actually Lane Bryant is owned by an outfit called Charm Shoppes. OK.


WASTLER: And, they have several in the category. They also have Katherine's Plus Sizes and actually, if you look at that sector, just going right for -- you know, the plus size. Now, that's there chart there for Charm Shoppes. You see a little rollercoaster action there, up and down. And, it's gained a dollar in three years, so -- you know, this is -- you know, market was taking a hammering there, too.

LISOVICZ: Retail has been tough.

WASTLER: So, it's in a retail market, but it's fared better than some, OK. Now, another one, a big outfit, Casual Male Group, OK. They have the Big and Tall stores.

SERWER: Because, it's just women who are overweight. WASTLER: It's not, no -- you know, it's seriously not -- you know, it's been going on.

LISOVICZ: I think we knew that, Andy.

SERWER: You're welcome. There you go.

WASTLER: Now, these kind of shops, so see there you got some gains in there.

SERWER: Yeah, there are more fat men all the time Allen, that's why that stock's going up. Right?

WASTLER: Yeah, you know what? I think I might be working on that area, too? But, anyway that's a -- you know, specific sector, but now with the advent of the internet...

ROMANS: Right.

WASTLER: ...and more -- you know, smaller specialized shops coming in, you got outfits that are coming in that are catering -- they're just trying to slice up that already one slice of the pie, and it's getting to be a big slice of the pie. You are talking 170 millions Americans there.

ROMANS: Bike seats. Bike seats.

WASTLER: Bike seats. OK?

ROMANS: Kayaks.

WASTLER: Actually, I found a bike seat. OK? And -- you know, actually, you're not just talking overweight, here -- this looks like it might be comfortable, too. You have bridal shops. OK?

SERWER: Big bridal.

WASTLER: Big Bridal. OK?

LISOVICZ: That's a lot of fabric. Think about it.

WASTLER: But, think about it's a -- you know, it's like a valid market that's there.

SERWER: Sounds like a ballad-type song doesn't it?


WASTLER: You got swimwear. OK? Swimwear is in there and -- you know, hey...

ROMANS: Lingerie.

WASTLER: Lingerie, too. I mean -- you know, people are people.


WASTLER: Their basic needs are going.

SERWER: Some of them are bigger than others.

WASTLER: That's true.


WASTLER: Now, also getting out of the apparel-type thing. You can also get into, like travel. OK?


WASTLER: And, there's starting to special travel. I mean -- you know, think about it, if you are going...

SERWER: Do fat people, I mean overweight people, excuse me, want to hang out together, that's the point, maybe?

ROMANS: Well, I think they want to be at ease at the beach. Right?

WASTLER: OK, at the beach. OK? You don't want -- you don't want to walk out on the beach and people go -- you know, and stuff like that.

SERWER: Yeah, all right.

WASTLER: You're on vacation. You are trying to get away from it -- you know, so there's the outfit down in Cancun, all right? Paradise Getaways, they do a special, sort of, just -- resort, it's 110 rooms.

There we got some pictures of it, right there.

ROMANS: Freedom Paradise.

WASTLER: Freedom Paradise, I'm sorry.

SERWER: Oh, I don't know if I want to see this.

WASTLER: And, what -- they just have -- you know, really simple things like extra wide steps to get in and out of the pool with railings -- you know.

SERWER: Extra big pools. Wow, there we go.

LISOVICZ: But, how close is it to the MTV, like Spring Break place?


LISOVICZ: Or Club Med?

WASTLER: Cancun is Cancun. You know what I'm saying? LISOVICZ: Yeah, I know, that's what I'm talking about.

SERWER: They're going a movie about that, but I'm not even going to go there.

WASTLER: And, the -- now home furnishings is another area that some specialty outfits are getting into. OK?

SERWER: Home furnishing?

WASTLER: Well, think about it. All right?


WASTLER: You get a lot of your dinky -- you know, kind of, couches.


SERWER: Oh, I see where this is going.


ROMANS: A six foot five, 350 pound man on my lawn furniture would not be a great idea.


LISOVICZ: Especially since I bought mine at a garage sale.


WASTLER: Yeah, right here, take a look, a specialized couch -- you know, to -- you know, and that looks like it would be a fun couch, too, because -- you know, quite frankly...

SERWER: Even for skinny people.

WASTLER: You know, I don't hit the body mass index for like overweight,

LISOVICZ: But how are these priced?

WASTLER: But, I have cracked some furniture, too. So, you know, these...

LISOVICZ: You know, but I mean, because this is a niche market, and that's what I was thinking...

WASTLER: A little more expensive than usual, OK? But, the idea in this area is -- you know, the weight problem in the United States isn't really...

LISOVICZ: It's not going away.

WASTLER: ...going down. You're getting more and more and more, so as these outfits...

LISOVICZ: Even, as doctors say it's bad for us and we should lose weight, there's a niche of corporate Americans ready to cash in.

WASTLER: And, you know what? You know, reading a lot of the comments on these web sites, a lot of people say -- hey, look, OK, so I'm overweight, and there may be a billion reasons for that, all right? But dang it, does that mean I cannot get a towel that -- you know doesn't make me feel like I'm drying with a washcloth or something?

SERWER: What about these caskets, though? Isn't there -- isn't that one...


WASTLER: Caskets, there's another one.

WASTLER: Now, those are pricey, too, because you have more material involved -- you know, so...

SERWER: And, like you pay by the foot. I've learned that, you know what I mean? It's true. It's true.


LISOVICZ: I like the extra -- exercise tapes.

SERWER: You don't get a volume discount, is what we're learning here, right? There's the caskets, right? One click.

LISOVICZ: There was an exercise tape for a 300 -- or no, a 500 pound woman doing workouts while sitting. So, you can sit and work out. I think I might actually do that just to find that kind of work out.

WASTLER: Lots of specialized things -- you know, and specialized equipment. There's kayaks and bike seats. It's all there. So, it's an interesting market and growing.

SERWER: All right. Allen Wastler, we're going to leave it at that. A weighty issue. You knew that was coming. Thanks very much.

Next, he put the jet in jet set. Virgin CEO Richard Branson made millions in the airline industry. Now, he's singing a new tune. We'll explain.

And, we'll introduce you to a new magazine; fancy that -- looking to cash in on the growing number of men in uniform.

Plus, if you're looking for the best way to color coordinate your gun rack and your clothes rack, have we got a catalog for up. Stick around.

(COMMERCIAL BREAK) LISOVICZ: Time for a check of some of the week's other stories in our "Money Minute." The Bush administration is beginning to talk more about the job market and it's getting specific about its goals. Treasury secretary John Snow said, Thursday, he wants the economy to produce 150 to 200,000 new jobs month. He says that the 57,000 new jobs created in September were not enough, and the job market is now his No. 1 worry.

If you're on social security, you will be getting a 2.1 percent cost of living increase next year. That translates to about 19 bucks more per month for the average retiree. But, most of that increase will be eaten up by 13.5 percent hike in Medicare premiums, which also goes into effect next year.

And, Kmart is out of bankruptcy and apparently not shy about bringing its most infamous or most famous pitchwoman back on the air. Martha Stewart will appear in some new ads that begin airing this weekend. This, despite the fact that Stewart is scheduled to stand trial in January on federal charges connected to the ImClone stock scandal.

SERWER: All right, Susan. Another big tech bellwether is our stock of the week. Tuesday night, Intel said its third quarter profits more than doubled. The computer chip maker says it benefited from the strongest demand for personal computers since the 1990's boom went bust. Over the last year, Intel's stock has had a nice run, climbing from around $13 a share to its current price of $32. That's why Intel is our stock of the week.

First of all, I have to get it off here, people who say in tell, that bugs me. It's Intel.

LISOVICZ: It's Intel.

SERWER: OK. It's Intel, we got that straight.

LISOVICZ: We're in agreement on that.

SERWER: Is this stock a core technology company? Some people say it isn't.

LISOVICZ: No question.

ROMANS: Well, it is. Definitely.

LISOVICZ: Four-fifths of all PC's, right? I mean, use Intel.

ROMANS: Absolutely. And, four to six price earnings ratio, that's something to keep in mind folks, when you're watching the -- you know, this whole Internet space and technology space. The PE's have gotten high after...

LISOVICZ: So, it's not only the stock prices? It's the price to earnings.

ROMANS: It's the price to earnings, which -- you know, Andy, of course, has given us the 101 about before. But, I want to also talk about something else that the company has said. That it expects China to surpass the United States in PC purchases...

SERWER: Right.

ROMANS: the year 2010.

SERWER: I think Legend is the name of the PC's they make there.

LISOVICZ: Is that troubling or...

SERWER: Right? Legend is the brand.

ROMANS: Well, It's amazing if you think that these companies are moving their technology operations overseas...

SERWER: Right.

ROMANS: ...because that is where the big growth is coming. And that's just a little sign of that.

SERWER: Yeah, of course this stock use to be 70 bucks, back in the day, that day would be 2000. One thing this company's doing really, really well is it's getting into the Wi-Fi business, that's the wireless Internet. And really, their chips are No. 1 in terms of getting that technology going on laptops. So, it's made a big bet there and it really seems to be paying off very nicely.

LISOVICZ: Who are the top competitors, actually?.

SERWER: Well, AMD use to be and Micron and, you know, they're out kicking around, but they have a tremendous market share, don't they?

ROMANS: And this is -- this is a DOW component, it's an important component of the NASDAQ 100, as well, so...

LISOVICZ: One reason why that the market has done so well.

SERWER: And they've had some great leadership, too. Andy grove, Craig Barrett, Paul Otellini is set to take over that company, very soon. All these people who've grown up in the company -- some say -- you know, you cannot do that, too inbred, but these are three strong guys.

ROMANS: You know people might not even know how to find out if they have this stock in your portfolio. I mean, it's probably in a lot of the big mutual funds.

SERWER: Right, everybody...

ROMANS: You just go look at the top ten holdings in all your mutual funds. It's probably a core holding in -- you might not even know that you own it, but you do.

ROMANS: OK, we have to step out now for a minute to pay some bills, but when we come back, a new tune for Richard Branson. The music business has already made the Virgin CEO one of the world's richest men and now he's going for more. He's going to be along to explain.

And a new magazine aimed at soldiers, that's long on skin and short on camouflage. We'll find out what it takes to make money off the military when IN THE MONEY continues.


LISOVICZ: With over 250 companies, some call Richard Branson a serial entrepreneur. From records and real estate to travel and telecom, Branson is hooked on finding the next deal and making it happen. So it's not much of a surprise that the chairman of the Virgin Group has some new projects up his sleeve.

Andy and I sat down with Branson earlier this week and asked him why he's taking on another venture, Virgin Pulse, a new line of Virgin electronic products.


RICHARD BRANSON, CHAIRMAN, VIRGIN GROUP: We like a new challenge and (UNINTELLIGIBLE) dominate the electronics business around the world. And so we thought we would put our toe in the water and develop a range of electronics which were sexy and exciting, good value.

LISOVICZ: Like MP3s and wireless phones?

BRANSON: Yes, all the -- DVDs, CDs, you know, things all packaged together into one and so on. And initially, we're launching it for the first year through Target and the Virgin record stores in America. And will learn the business. And then if that works, we'll take it global and see how it goes.

LISOVICZ: You know, it's interesting, because you, yourself, don't even use a PC. You're low tech, Branson, and you're going into this market with very big, established competitors.

BRANSON: I think that one of the advantages of having myself as chairman of this company is that, you know, I'm not an electronic buff. Sony very much direct their products as if everybody out there is electronic buffs. So you've got hundreds of knobs on all their products.

Their literature is extremely difficult to understand. So we're trying to simplify it, so people like myself will actually you know, be able to read the literature and be able to use the products and enjoy the products. And so sometimes it's not such a bad thing not to be -- you know, to completely be computer illiterate.

SERWER: I want to switch gears and go to talk about airlines a little bit, because obviously you're a huge player there. But you're talking about coming to the U.S. with a discount airline. I mean, come on, Richard. There's already JetBlue. There's already AirTran. Never mind Southwest. Again, aren't you coming into a crowded business?

BRANSON: Well, it's a very big market in America. And there are a lot of places in America that are not being serviced by JetBlue or Southwest. And we've got -- again, we've got a great brand. Virgin Atlantic flies to most of the major cities in America, and we think that we've got a chance of making a go of it. So mid next year, Virgin USA will start flying.

SERWER: Which cities are you going to -- where is it going to be rolled out?

BRANSON: Well, because we're not launching for another seven or eight months, we actually don't want to announce now where we want to fly to, because we don't want our rivals to get in there before us.

LISOVICZ: But "The Washington Post" is saying that you partner up with Atlantic Coast, which is a regional airline?

BRANSON: It's the first I've heard about it. I think, at the moment, our plan is to start from scratch. You know, to employ people from scratch. And most of our successful businesses are not in partnership with other people.

LISOVICZ: But you face certain restrictions because, in fact, you are not a U.S.-based company.

BRANSON: Yes. I mean, one of the reasons we, you know, for instance, didn't -- I mean, JetBlue originally wanted to be Virgin Blue. And one of the reasons we didn't get into bed with them was we weren't able to own an airline in America.

We've now decided that if we carry on waiting forever, we'll miss the boat. And we'd rather own 49 percent of the company than nothing. And so we will bring in other partners.

LISOVICZ: You know, when you talk about starting a new business from scratch, it requires capital, a lot of capital, especially for airlines. Have you ever thought about taking your company public? I mean, the markets are coming back, the Nasdaq is up better than 40 percent this year.

BRANSON: Well, I think individual Virgin companies will come to the market, amd Virgin Blue in Australia is likely to come to the market before the end of the year. Virgin Mobile has been an enormous success in America and in the U.K., and that we may well take to the market in the next couple of years. Our top company we will always keep private, and it's nice not to have the magnifying glass on everything.

SERWER: Well, I want to follow up on that, because, you know, of course, it is a private company. You've got offshore partnerships. A lot of people point fingers and say, is this guy really paying his fair share of taxes? I mean, how would you respond to that? BRANSON: Well, I mean, like anybody, if we can avoid paying taxes, we will avoid paying taxes. We pay an awful lot of taxes, but you know, if it makes sense to set up a company in America rather than Britain, or in France rather than America, we will do so. We will try to mitigate our taxes as best we can, but we still pay tens of millions of pounds in taxes most years.

LISOVICZ: But you are a self-made man. I mean, you've totally gone against the grain. And that's been part of the beauty of it. You never completed high school, you're a billionaire. You're kind of a bad boy.

Do you think you could ever play by Wall Street's standards? I mean, wouldn't that sort of...


BRANSON: I'm trying to think if that's a compliment or not.

LISOVICZ: I mean maybe you have a wear a pin striped suit occasionally.

BRANSON: No, well I think Wall Street will have to take us in our clothes or whatever. I mean, if we go public, if we take individual companies public, we'll play the public game. We'll get executives on board who are willing to troop around Wall Street, and we'll get the right chairman on board and we'll get the non-execs on board.

And there's no point in doing something unless you do it properly. I personally might not troop around Wall Street and get other people to do it.

LISOVICZ: Last quick question. We're almost out of time. Any hot air trips planned in the near feature?

BRANSON: I think I've finished the hot air ballooning. But in about 10 days' time we may be announcing something which will be quite fun and which I think you'll quite enjoy following.


LISOVICZ: That was Richard Branson, chairman of the Virgin empire, and one could safely say, one of a kind.

ROMANS: Absolutely. You know what I really like about this guy? At a time when big CEOs, people who own a lot of different companies, are trying to pare down to their core brand, find strategic reasons why they should keep companies along the same line, he's going out there with all kinds of different ideas. If it's a good enough story, good enough idea, he just chases it.

LISOVICZ: And he's going after the big boys. He's going after Sony, he's not afraid to say.

SERWER: Right. I mean, he's done that his whole career. I also him very refreshing on a personal level.

He's actually rather a humble guy. He comes in here unescorted. You know, he says, quite candidly, "Some of my businesses fail. I'm trying new things."

"I live down in the Caribbean. I have a great life. I'm the luckiest guy in the world." I mean, it's just so nice to hear someone who is uninhibited like that.

LISOVICZ: And he's fun. He has fun. I mean, he does hot air balloons, he does these publicity stunts. He's a colorful guy, and he's a lot of fun for us to cover, that's for sure.

ROMANS: Absolutely.

LISOVICZ: Up next on IN THE MONEY, guns and fun. Discover a new magazine that's out to prove boys will be boys, even if their servicemen.

And handgun maker Smith & Wesson targets a new kind of customer. Find out how the company is taking its brand beyond the shooting range.


SERWER: All right. The bazooka meets the bikini in a magazine making its debut this week. It's called "Drill," and it's designed for the American serviceman -- and we do mean man.

For a look at the magazine and why the people behind it think it's a good business idea, we're joined by the editor, Isaac Guzman. Isaac, welcome to the program. I've got to ask you, though, I mean, there's "FHM," "Maxim," stuff already out there. How is this magazine different?

ISAAC GUZMAN, "DRILL" MAGAZINE: This magazine is different because we're taking a new idea to the servicemen. We're saying, we recognize the great job you're doing for our country. We recognize the duty you feel. But we also say, hey, when you're off-duty, out of uniform, on leave, you need to have a good time.

LISOVICZ: And that's why you have a Desert Fox on the cover?.

GUZMAN: I've got Desert Fox here, and she's going to show you a good time, absolutely. And "Drill" magazine is a way, if you've got down time -- and everyone knows, even in a battle zone, you've got like six hours of waiting for the two hours of action that come your way. This is a magazine you can take with you, you can go up there, you can spend a couple of hours with it, get some laughs, take your mind off things and have fun.

ROMANS: You have 80,000 in circulation, but there must be a great pass-around rate. I mean, I can imagine (UNINTELLIGIBLE) and the Wal-Marts near the bases.

GUZMAN: Right, right. It goes around the tent. ROMANS: Yes, and it gets passed around quite a bit.

GUZMAN: We definitely think that's going to happen. We definitely think that we're going to see a lot of guys passing it around.

LISOVICZ: But you don't want that, right?

GUZMAN: Well, we don't want that, but we also think we're going to create a sense of community, where guys are going to want to buy more than one copy. We're going to have contests, we're going to have things that bring them into the magazine, where having a copy of the magazine is going to be kind of your ticket into like the culture, the moment, the community being in the armed force.

ROMANS: What about controversial issues? There are beautiful women, you know, "How I got so drunk I couldn't barely make it back to the ship" kind of stories.


SERWER: I have to see that. I love that.

ROMANS: Yes, exactly. That name was withheld for safety.

So I'm wondering, are there going to be political issues? Are there going to be, you know, why it's OK for us to be in Iraq? How to respond to people who are protesting, you know?

GUZMAN: Absolutely. I think throughout the ages, you've always seen the American serviceman have had to weather the tides of politics, administrations and ideas. And we're really kind of taking their side in this, and basically, you stay under the surface, you do your job, you do your thing, you have fun with the magazine. Politics, decisions, big ideas, that's kind of on the outside of this magazine.

LISOVICZ: OK. So then let's talk about advertising, which is the lifeblood of any magazine. Of course, the first big ad that you see after the cover is "Jeep."

GUZMAN: Totally appropriate. A perfect ad.

LISOVICZ: And what about like the really grand slam, big paying Calvin Klein's, the perfumes, colognes, all those? Are they coming forward, the fragrances?


GUZMAN: Well, there's a branch of Ralph Lauren, and I forget which one it is. But one of the Ralph Lauren brands does something like 65 percent of its total business in the entire world through the military exchange system. So there's Ralph Lauren Polo saying, we want to be a part of this.

LISOVICZ: So they're an advertiser? GUZMAN: We believe that they will be in the next couple of months.

SERWER: Is this sanctioned by the military, by the way? Is the military involved in this?

GUZMAN: The military is not involved. I mean, we definitely have gone and talked to people on bases. We've talked to some of the brass.

We obviously had to pass -- every magazine on the base has to go through a certain kind of vetting process. But in no way do they have anything to say in the editorial content or the direction we've taken. They've kind of just had a hands-off thing, and I think they're kind of waiting with bemused detachment to see what we're going to do.


ROMANS: No "Drill" magazine for the women out there?

GUZMAN: Hey, if this one takes off, then we could definitely target that market, too.

SERWER: Christine, you could do it. It's an idea for you. Start it up.

ROMANS: OK. Isaac Guzman, "Drill" Magazine, thanks so much.

GUZMAN: Thank you.

ROMANS: Coming up, some killer styles from one of the world's top gun makers. We'll have the latest on the fashions and housewares catalogue from Smith & Wesson.

And you can tell us how we look and sound by emailing us at Stick around.


LISOVICZ: Webmaster Allen Wastler joins us now with a bold, new solution to stop all those annoying spam emails. He also has the fun site of the week. Do tell.

ALLEN WASTLER, WEBASTER: Well, you know what, I've thought about this, and I've talked to all of my geek friends and said, well, you've got to have the filter and you've got to have the back server and you've got to have the domain and everything. It's just not going to work. Technical solutions out the window.

Let's go with an economic one. Let's tax email. Let's start taxing it, OK? The ISPs, that would be Internet service providers...

LISOVICZ: The government would love that.

WASTLER: ... can do it -- the government needs the money. ROMANS: But only if you didn't tax emails within a certain company. Like, I want to be able to email Susan as much as possible during the day.

WASTLER: Right. Within a certain company or even within a domain. You know, say you're in one service provider's little community and you just want to have buddy talks and everything. That's fine. But the moment that you take it and say we're going to the outside Internet world, let's go, tax that bad boy.

LISOVICZ: Has that idea actually been floated?

WASTLER: It's been floated from time to time. A lot of people in the Internet community go oh, no. The Internet should be free.


ROMANS: It's like the telemarketers and the free speech thing, you know? I mean, you're impeding on my right to be able to go out on the street and talk to people.

SERWER: And bother people -- and bother them.

LISOVICZ: But it's reached a chronic stage now.

WASTLER: Think about this, OK -- the reason you don't get a barrage of direct mail -- you get some junk mail, but the reason it's not flooding your living room is that eventually there is a limiting cost, OK? So if you make it that there is a cost to send all of these things out, you're going to start weeding it out and weeding it out.

SERWER: But wait a second. What about the poor people who work in the filter business? Aren't you going to be putting them out of work? No, seriously. I mean, I wonder how many people who...



SERWER: ... actually work in our company filtering out -- I know they're really cranking it.

WASTLER: Tell me, Andy, are they successful?

SERWER: No, they're not. I wonder how bad it would be if they weren't doing it. I mean, how many emails do you think they're -- or how much spam are they preventing? I mean, I'm getting tons of it, but would it even be worse if they weren't there? I don't know.

LISOVICZ: You can always count on computer breakdowns, though. I mean, the folks in tech ops aren't busy.

WASTLER: Yes, they're very busy. Now, it's interesting you bring up the company angle. We have surveys all the time, and this is done by an outfit called Inside Express and Unspam MLC (ph). And keep in mind, that's a spam consultant, so they're in the business of making you worry about spam.

But they say, OK, 62 percent of porn spam, people -- they surveyed 1,500 people -- makes it a hostile work environment. And 63 percent say the (UNINTELLIGIBLE) should be stopping it. Uh-oh, I think I hear the HR department getting a little nervous, saying, oh, no, you're not going to say that we -- oh, you're not going to sue us, are you, OK?

They say ISPs are disingenuous when they say they can stop it. And they say they'd be more productive -- 40 percent say they'd be more productive if they weren't having to ace out spam all the time. OK? Now, Charles Schumer, Senator...

SERWER: Senator Schumer.


WASTLER: (UNINTELLIGIBLE) all of the populous sort of causes. He's waving the survey around this week in the Senate, saying that's why people should sign up my do not registry legislation. Let's push this thing through, let's get it on board. That's not going to work. But you can see they're trying to get corporations more interested in the issue, because it's the corporate tech guys, they're the ones in the best position to hammer this guy.

LISOVICZ: Allen, we're all on board with you. We hate spam, but we love the fun site of the week. And this is a great one.

WASTLER: Got one for you. OK, we've got the World Series and everything, right?


WASTLER: Then you need to go to Heckle Depot, OK?

LISOVICZ: Christine really wants to go there.

WASTLER: Hundreds and hundreds of heckles. You can throw them out. There it is. That's the site.

And they've got is categorized by umpires, by fielding hecklers, by batting hecklers. Picked out a few of our favorites.

OK. For fielding, you've got about as much control as two rabbits on a first date! There's more holes in his glove than a Florida presidential ballot.

SERWER: And Bill Buckner.

WASTLER: And here's a good one. The cow that was used to make your glove just turned over in its grave.

LISOVICZ: But you know, Allen, I have to tell you, one of the best cultural heckles, I read it on the same site, was "I've got Internet stocks in better shape than you."

ROMANS: We love that on IN THE MONEY.

WASTLER: Here's one that we love.

SERWER: All right, Allen. We've got to leave it at that, I think. Allen Wastler, webmaster. I love that title. That's awesome. Thanks a lot.

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