Knowledge@wharton

It’s open season on the television industry’s business model. In recent years the three pillars of the industry’s profits -- advertising regional programming and syndication deals -- have come under fire from a band of technology companies including Sling Media TiVo Orb Networks and Apple Computer that are rewriting the content distribution rules. As one Wharton professor notes TV won’t necessarily be viewed via TV anymore. What are the dangers and opportunities of digital distribution? How easily can the big media companies adapt to new technologies and can they continue to attract viewers who spend more time these days on the web than with their remote controls? See acast.com/privacy for privacy and opt-out information.

Helen Greiner shares a key trait with many successful business leaders -- a passion for something. In her case it happens to be robots. That passion led Greiner -- along with Colin Angle and Rodney Brooks -- to found what would become iRobot in 1990. Over the past four years iRobot has sold more than 1.5 million robots for cleaning floors and has deployed more than 300 tactical military robots in Iraq. Greiner recently gave a presentation at Wharton sponsored by the School’s entrepreneurship and technology clubs after which she talked with Knowledge at Wharton about her company and the impact that robots have and will have on our everyday lives. See acast.com/privacy for privacy and opt-out information.

At a time when global business rivalries are intensifying competition often resembles combat. Keeping this connection between business and the armed forces in mind three Wharton undergraduate students -- Rana Yared Naomi Adaniya and Mark Green -- recently participated in officer leadership training at the U.S. Naval Academy. Among the lessons they learned: Leadership isn’t always glamorous; it often starts with the mundane. See acast.com/privacy for privacy and opt-out information.

Online communities have become not just a major social force but a significant driver of business activity both online and offline. Facilitating nurturing and benefiting from those communities however is not a simple task. To explore what makes these communities tick Kevin Werbach a professor of legal studies and business ethics at Wharton spoke with Craig Newmark founder of Craigslist.com Julie Herendeen vice president of Network Products at Yahoo and William Flitter CMO of Pheedo. See acast.com/privacy for privacy and opt-out information.

Much to the surprise of several venture capitalists who turned her down Helen Greiner co-founder of iRobot has built a thriving business making domestic robots like Roomba which sweeps floors and industrial robots that defuse bombs in Iraq. She was on campus this week at the invitation of the Wharton technology and entrepreneurship clubs and spoke with Knowledge at Wharton about the impact that robots have and will have on everyday life. See acast.com/privacy for privacy and opt-out information.

Springtime in addition to bringing back flowers and birds also brings forth many companies’ proxy statements including information on CEO compensation. It’s a signal for the business press to get to work reporting the details of what appear to be the highest executive pay packages. Wharton accounting professors Wayne Guay and John Core and Stanford accounting professor David Larcker also study executive compensation. What they conclude from their most recent research is that the most relevant information doesn’t necessarily make headlines. They also find that in general the media’s focus on excessive compensation does not substantively change corporate behavior with regards to pay packages. See acast.com/privacy for privacy and opt-out information.

Different points on the research spectrum were under the microscope at the Wharton Health Care Business Conference last month as two panels of biotech pharmaceutical and investment leaders discussed the state of R&D among big pharmaceuticals and the progress of stem cell research. While disappointing results in both sectors have dominated the news lately panelists at each session also noted some promising developments -- and causes for optimism -- in their respective fields. See acast.com/privacy for privacy and opt-out information.

Five years ago this winter California’s wholesale power market imploded. Power prices soared. California residents endured weeks of rolling blackouts. Two California utilities were forced into bankruptcy even as their suppliers -- independent power companies -- reaped huge windfalls. Five years later the tables have turned. Formerly bankrupt California utilities are profitable while formerly robust power generators scramble to survive. What happened? Wharton faculty and others look at the industry’s unique challenges and suggest structural and management strategies that could improve its chances for sustainable growth. See acast.com/privacy for privacy and opt-out information.

Consumers these days swim in an alphabet soup of digital devices -- PCs and PDAs DVRs and iPods MP3 and DVD players. And each device delivers a host of programming that is not easily enjoyed on the others. This diversity means that market power will continue to reside with firms that can help consumers find and organize content for their preferred device -- in other words search engines according to panelists at the 2006 Wharton Technology Conference. Discussion centered on increasing advertising opportunities that will accompany improved search engines the development of local and enterprise search and the need for standard data-storage and transfer formats. See acast.com/privacy for privacy and opt-out information.

Although Microsoft recently unveiled an ’ultra-mobile personal computer ’ or UMPC in a move to fill a market niche between laptops and handheld computers it remains to be seen whether this latest innovation from the software giant will be a hit or flop. While Microsoft is following a ”build-it-and-it-will-sell” strategy with the UMPC technology history is littered with innovative products that never found a market say experts at Wharton. As Wharton professor of operations and information management Eric K. Clemons puts it: ”Build-it-and-it-will-sell strategies are a mixed bag.” See acast.com/privacy for privacy and opt-out information.

The recent sale of Knight Ridder the country’s second-largest newspaper chain to McClatchy follows one of the most difficult years the industry has had -- declining circulation job losses and falling stock prices. Newspapers it would seem have two big strikes against them: They are in a mature industry and they are a textbook example (stockbrokers are another) of an intermediary between sources of information and customers -- a role that is being increasingly challenged by the Internet. To remain competitive in the coming years say Wharton faculty and others daily newspapers will have to strengthen their efforts to attract younger readers make more imaginative use of the Internet and develop stories mostly local in nature that better meet the needs of time-pressed subscribers. See acast.com/privacy for privacy and opt-out information.

On Friday February 24 the long-running patent dispute between Research In Motion which makes the popular BlackBerry wireless email and communications device and NTP a holding company that claims RIM technology infringes on its patents will finally have its day in court. That’s when a federal judge will consider a possible injunction that would effectively shut down BlackBerry service in the U.S. But perhaps just as important as the specific facts of this case are the broader questions it raises: For example could RIM be shut down even as the U.S. Patent and Trademark Office (USPTO) is re-evaluating several of the disputed patents? Is the patent office bogged down with so many patent applications that it can no longer function effectively? Are companies abusing the original intent of patent law? And can a system that in 1977 permitted a patent for a ”comb over” -- technically a ”method of styling hair to cover partial baldness using only the hair on a person’s head” -- keep up with technological innovat

They were unusual tax shelters that went by incomprehensible names like BLIPS OPIS BOSS and FLIP -- and they boomeranged on the companies that sold them. In February German bank HVB Group agreed to pay $29.6 million in fines to avoid indictment for defrauding the Internal Revenue Service with abusive tax shelters that gave rich clients phony losses to reduce taxes. The settlement was part of a broadening investigation into shelters that wealthy individuals used to escape about $2.5 billion in taxes from the mid-1990s through 2003 according to the government. What is a tax shelter and more importantly what is an illegal one? See acast.com/privacy for privacy and opt-out information.

With $2.5 trillion invested in 401(k) retirement accounts 60 million Americans control a powerful chunk of cash. So how much attention do investors pay to this vast pool of savings? Not much. According to a new Wharton analysis of retirement accounts managed by The Vanguard Group in 2003 and 2004 participants in 401(k) plans made little effort to tend their defined-contribution plans once they were set up. Even among those who did trade regularly turnover rates were one-third those of professional money managers. Olivia S. Mitchell executive director of Wharton’s Pension Research Council Stephen P. Utkus principal Vanguard Center for Retirement Research and researchers Gary Mottola and Takeshi Yamaguchi present their findings in a paper entitled ”The Inattentive Participant: Portfolio Trading Behavior in 401(k) Plans.” See acast.com/privacy for privacy and opt-out information.

When Merrill Lynch decided this month to sell its asset-management operation to BlackRock -- a money manager serving wealthy investors and institutions and best known for its conservative focus on bonds and risk-management products -- analysts and investors cheered bidding up the shares of both companies. By acquiring Merrill’s $539 billion mutual fund family BlackRock will quickly broaden its stock-fund offerings and its appeal to retail customers. Merrill by acquiring just under 50% of BlackRock will do well if BlackRock can strengthen the performance and appeal of Merrill’s disappointing fund operation. But the cheering involves some wishful thinking as well. Merrill hopes to finesse its way out of its disappointing decision to embrace one of the late-1990s hottest fads: the financial supermarket. And BlackRock has to hope that investors don’t come to see it as a de-facto Merrill subsidiary inheriting Merrill’s problems without adding value of its own to the asset-management business. See acast.com/p

The avian flu that is steadily making its way around the globe represents a huge challenge for governments corporations and citizens worldwide. No one knows what will happen to the avian influenza virus in the coming months and years. Will it mutate into a strain that will allow people to readily infect others? Or will it fizzle out? Despite the uncertainty many people are taking into account scenarios ranging from mild to severe in order to plan for what could turn out to be a calamity. Faculty members at Wharton health care professionals and risk consultants say it is important that companies assess how their organizations could be harmed by a pandemic and take preventive measures to mitigate the damage and keep their enterprises operating. See acast.com/privacy for privacy and opt-out information.

Last fall Spain’s Banco Santander Central Hispano announced that it would pay $2.4 billion for a 20% stake in Philadelphia-based Sovereign Bank. It was a deal that didn’t surprise Wharton management professor Mauro Guillén who has been watching the strategic moves of the bank since the late 1980s. But Guillen’s interest goes beyond Banco Santander. In a recently published book titled The Rise of Spanish Multinationals: European Business in the Global Economy Guillén explores why and how Spanish companies in a variety of industries have acquired a prominent presence in the global economy and what this expansion means -- economically financially politically and socially -- for Spain and the rest of Europe. See acast.com/privacy for privacy and opt-out information.

With its acquisition of Macromedia on December 3 2005 Adobe Systems has become the fifth largest software company in the world. It currently controls two of the dominant formats for electronic content -- the Adobe Acrobat PDF format for electronic documents and the Flash SWF format for interactive web content. Looking ahead CEO Bruce Chizen’s goal is to have Adobe provide the interface for any device with a screen -- ”from a refrigerator to an automobile to a video game to a computer to a mobile phone.” Such ambitions put Adobe squarely in the sites of Microsoft which currently dominates desktop software development. In a recent interview with Knowledge at Wharton Chizen spoke about the Macromedia acquisition his plans for developing the next-generation application platform and his views on the challenges presented by Microsoft. See acast.com/privacy for privacy and opt-out information.

Numerous American industries are being battered by lower-cost competition from abroad. But the U.S. entertainment sector is poised to profit amid the onslaught say Hollywood executive Jeff Berg and Wall Street investor Suhail Rizvi. Berg chairman of International Creative Management talent agency has made his career in Hollywood; Rizvi head of a private equity firm recently invested (along with Merrill Lynch) about $100 million in ICM. But Berg and Rizvi’s partnership rests on clear-eyed strategic reasoning not a shared fascination with the glitter. ”The production of media may go to other places but the content will still be owned by U.S. companies and that’s where the value lies ” Rizvi says. He and Berg spoke last month at the inaugural meeting of the Wharton undergraduate media and entertainment club. See acast.com/privacy for privacy and opt-out information.

When Rebecca Rimel president and CEO of the Philadelphia-based Pew Charitable Trusts describes the challenges she faces running a $4.6 billion organization she uses the same words one hears from leaders in the for-profit world: ”highly strategic ” ”politically aware ” ”leveraged” and ”accountable.” But her bottom line is impact not profits. ”We are highly driven to make a difference in the key issues that matter to the health and happiness of our stakeholders -- the public ” she said during a recent leadership talk at Wharton. Running an effective organization Rimel told her audience requires hard-nosed decisions about which projects to fund which people to hire and what battles to walk away from. See acast.com/privacy for privacy and opt-out information.