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Internet Edition, December 12, 2001, Page 1


Maytag's Amana division is looking for a PR firm to promote its brand of refrigerators and microwave oven products, Jim Powell, a Maytag corporate spokesperson, told this NL.

Karen Davis in Maytag's appliance group has been hearing pitches from PR firms. She is at 641/787-6972.

Amana has promoted its product reliability via the "built better than it has to be" communications pitch. A recent product push has been for the "Easy Reach Plus" freezer.

Maytag scooped up Amana, which was founded in 1934, from Goodman Global Holdings in a June deal worth $325 million. The company said Amana would add $900 million to Maytag's $4.3 billion sales base.

Hoover, Dixie-Narco and Jenn-Air are other Maytag brands.


Jack Bergen, president of the Council of PR Firms, will join Siemens USA, New York, at the end of the year as senior VP, corporate affairs and marketing.

Sarah Drennan, VP-operations of the Council, will be acting president while a search for a new president takes place.

Before joining the Council, Bergen was PR head at CBS/Westinghouse Electric; CEO of GCI Group, and president, Hill and Knowlton USA. His salary was $200,000 annually throughout his CPRF tenure. The CPRF has about $1 million in annual income and currently about 120 members.

Bob Woodrum of Korn-Ferry International handled the search. John Graham, chairman and CEO of Fleishman-Hillard, and the 2002 Council chairman, heads the search committee for Bergen's replacement.

Bergen told this NL the Council is considering a number of candidates and expects to name his replacement by the end of the month.

He said he had never sought another position or even responded with an expression of interest to any inquiries by recruiters since he joined the CPRF 40 months ago.

Siemens USA is part of Siemens AG, Munich, Germany, electronics and engineering company with 460,000 employees in 193 countries and sales of $74 billion in 2000. Siemens employs 80,000 in the U.S. and has sales of $17 billion+.


Burson-Marsteller handled the Dec. 3 launch of the much-anticipated Segway Human Transporter, according to Kerem Dinlenc, a member of the B-M team.

The HT, which was called "It" or "Ginger," kept the "high-tech world abuzz for nearly a year," according to Reuters.

The New York Times said the mystery transportation device has been the "subject of continuous fevered speculation since provocative clues and predictions surfaced in media reports last January."

"Good Morning America's" Diane Sawyer and Charlie Gibson each gave the 65-pound scooter-like vehicle a spin.

Segway LLC envisions millions of people zipping along on the electric-powered machine that is controlled by the movement of the rider's body.

It predicts the Segway HT could "solve major urban problems, such as pollution, congestion and livability."

Dinlenc identified B-M's Segway team members as Linda Recuperio, U.S. brand marketing chair; Tracey Pontarelli, mng. dir., and Jennifer Norton, dir.


Sulzer Medica, which wants to negotiate a $783 million voluntary class action settlement with patients affected by its recall of hip and knee implants, has invited Hill and Knowlton to handle U.S. litigation and corporate communications.

The Switzerland-based company selected H&K without a pitch. Beatrice Tschanz, director of corp. comms. at the company, called H&K the "obvious choice" due to its "understanding of legal issues."

Tschanz handled PR for SwissAir when H&K did crisis PR for its crash off the coast of Newfoundland, Jim Cox, H&K's U.S. director of client service, told this NL.

Cox, Harlan Loeb, head of its litigation asset group, and Francesca Trainor, litigation specialist, head the Selzer account.

Cordiant Communications is chopping 1,100 jobs, or more than 10 percent of its workforce, to counter the decline in PR/ad spending. The U.K.-based combine, which is the ninth largest ad agency, expects full-year revenue to fall in the $670 million range. That's down nine percent from last year.

Cordiant last year bought Lighthouse Global Network, which was parent to Morgen-Walke Assocs., in a stock deal worth nearly $600 million.

Internet Edition, December 12, 2001, Page 2


The Securities and Exchange Commission has issued an alert cautioning investors to "potential dangers" of pro forma financial reports, while warning companies that they could face legal action by issuing misleading earnings reports.

"We believe it is appropriate to sound a warning to public companies and other registrants who present to the public their earnings and results of operations on the basis of methodologies other than Generally Accepted Accounting Principles," the SEC said in a statement. "This presentation in an earnings release is often referred to as 'pro forma' financial information."

The SEC expressed concern that pro forma information, under certain circumstances, can mislead investors if it obscures GAAP results, making it difficult for investors to compare a company's financials with other reporting periods and with other companies.

In a separate statement of "Tips for Investors," the SEC encouraged investors to look through pro forma results to find out "what the company is not saying." The Commission also explains how pro forma results compare with GAAP financials, and how to read what a company is "assuming" from a pro forma report.

In its statement to public companies, the Commission cited specific examples of conduct which could mislead investors.

The presentation of financial results which are addressed to a limited feature of the overall results - earnings before interest, taxes, depreciation, and amortization, for example - misleads investors when the company does not clearly disclose the basis of its presentation, the SEC said, reminding companies of federal antifraud securities laws.

The Commission said companies should pay attention to the "materiality" of the information that is omitted from a pro forma release, saying statements of results that are literally true nonetheless may be misleading if they omit material information.

The SEC "commended" earnings press releases guidelines developed by the Financial Executives Int'l and the National Investor Relations Institute, saying companies should consider and follow those recommendations before issuing pro forma results.

Unger Wants Probe of Reg FD Impact

The SEC should examine whether Regulation FD has "chilled" the flow of corporate communications or "has given rise to any other negative or unintended consequences," said departing Commissioner Laura Unger in a 22-page report on the rule released Dec. 6.

While the one-year rule has increased investor access to corporate information, the worth of that info has not yet been quantified, according to Unger, who voted against Reg FD.

Some members of the various roundtables convened by Unger criticized Reg FD for a decline in the quality of information.

Unger recommends that the SEC examine both the amount of information being disclosed and the type of information issuers are providing in Form 8-K, webcasts, press releases and through other modes of dissemination.


A new era of PR knowledge has opened with the creation of a searchable database of everything on the O'Dwyer website starting Jan. 1, 2001, said publisher Jack O'Dwyer.

The search engine will find any name or group of words in a few moments from among the hundreds of thousands of words on the site.

For instance, typing in the word "merger" in the "Search O'Dwyer's" feature at the top left of the first web page results in summaries of stories that have "merger" in it (60 as of Dec. 5).

Clicking on the summary brings up the entire story including pictures.

Typing in "Ketchum" brings up 62 stories mentioning that PR firm.

A search of "PRSA" finds more than 70 stories.
The existence of the O'Dwyer search engine as well as the major search engines such as Google and Yahoo means that PR is more important than ever before, said O'Dwyer.

"Stories are forever since they're so easily accessible," he said. "No longer can an executive think, `Well, the public will forget all about that by next week.' The story will always be right there in one database or another," said O'Dwyer.

This will make all sorts of PR research easier and will make new types of research possible, he said.

Prospective clients and employees of PR firms and companies can check what the news has been, he said.

Someone searching for an individual might find him or her in a web search, he added.

An agency can search to see how many mentions it has obtained and compare this with other agencies.
Materials for feature stories or studies on topics such as healthcare, travel and other subjects can be easily assembled using the search engine, said O'Dwyer.


Publicity powerhouses Lizzie Grubman and Peggy Siegal have called it quits, Grubman's executive assistant told this NL. She said the name of the firm is expected to go back to Lizzie Grubman PR, which was launched in 1996.

Siegal has paired with Harriet Weintraub to form Harriet Weintraub/Peggy Siegal PR to pitch celeb events and fashion labels.

The Grubman/Siegal break-up is said to be amicable. The two, who created Lizzie Grubman & Peggy Siegal PR in 2000, expect to do some joint promotion work in the future.

The combo may have soured earlier this year after Grubman was accused of mowing down 16 patrons of the Conscience Point Southampton nightspot with her SUV.

Weintraub formed HWPR this year.

Internet Edition, December 12, 2001, Page 3


Hollywood PR pro Warren Cowan, who is profiled in the November issue of Los Angeles magazine, said publicists who withhold access to bigger stars unless journalists commit to covering the also-rans, are "immoral."

"I have never played one client against the other," the 77-year-old PR pro, who has been handling celebrities for six decades, told Amy Wallace. "I always go back to creating news," Cowan said.

"I feel strongly about not misusuing power," he told Wallace, who compares him to PMK's Pat Kingsley, who began her career as Cowan's secretary.

Wallace said Kingsley, whose firm controls media's access to 300 stars, "makes demands, seeking to control not just who writes stories about and shoots images of her clients, but what questions are off-limits and where stories will be placed."

"Kingsley and her partners, who are known to blacklist journalists who won't agree to their terms, have used America's fascination with celebrity to give publicists more leverage than ever before," said Wallace.

"Cowan, by contrast, is of the old school. He doesn't yell, preferring instead to seduce and cajole," said Wallace. "His approach is less adversarial and more complementary-a product of the era in which he started out, when movie stars needed the general interest media more than the media needed them."

Cowan told Wallace he has long used press coverage not just to make his clients famous but to get them work. For that reason, he has never publicized who his clients are.

He wants the studio heads to read a story about one of his clients and be impressed, and not to think he planted it, said Wallace.

Rogers & Cowan was founded in 1950 when the now-deceased Henry Rogers made Cowan a partner. In 1987, R&C was sold to Shandwick (which was later bought by Interpublic).

Cowan left the firm in 1994, just days after his noncompete clause expired, to open his own agency, Cowan and Assocs., in Beverly Hills.


The Wall Street Journal will start a fourth section on lifestyles, called "Personal Journal," on April 9.

Beginning Jan. 2, the Journal will increase from 80 pages daily to 96. Of these, 24 pages will be color-capable, up from eight pages at present.

The Journal will also have a cleaner and clearer design that will include increased aids to navigation, more color and fewer typefaces. For the first time since World War II, the front page will sport a new design, which will include color.

The Personal Journal section will be published every Tuesday, Wednesday and Thursday and it will offer readers content focused on the "business of life" including personal investing, travel, health and family, autos and consumer electronics.

Dave Kansas, who covered the financial markets for the Journal before becoming the founding editor-in-chief of, was named managing editor of The Wall Street Journal Online.

Kansas will direct and expand the Online Journal's coverage of money, investing and personal finance.

The "Weekend Journal," a section which focused on leisure activities, will continue to run every Friday.


Arthur Levitt, the former Securities and Exchange Commission chairman, will contribute a monthly column for Bloomberg Personal Finance magazine starting next spring.

Levitt's column will replace the "Opener" op-ed written by Bloomberg LP founder Michael Bloomberg, who has been elected mayor of New York. Levitt's columns will focus on investor-rights issues.

Elizabeth Shea, principal and co-founder of The SheaHedges Group, and who was recently named the top PR pro for 2001 by Washington Women in PR, told The Washington Business Journal she has a rule to never start a pitch with a reporter by saying: "There is this company you should know about."

Janet Guyon, a senior writer, is succeeding Justin Fox as European editor of Fortune magazine.

Fox, who is based in London, is moving to New York as editor-at-large and to oversee economics and economic policy stories.

Guyon, who will relocate to London, will continue to cover economics, multinational companies, and profile CEOs.

Katrina Brooker and Devin Leonard were promoted from writers to senior writers at Fortune.

Brooker will continue to profile CEOs and companies; Leonard will remain writing middle-of-the-book features, including stories covering the real estate and media beats.


USA Today has moved its headquarters to 7950 Jones Branch dr., in McLean, Va. The new phone number is 703/854-3400, but the last four digits of all personal extensions will stay the same.

Town & Country has moved its offcies in New York to 1790 Broadway, 14th floor, for five weeks due to construction. Press releases and other correspondence should still be sent to the magazine's current address at 1700 Broadway. 212/903-5000.

Crain Communications has relocated its company headquarters and three of its Detroit-based publications to new offices.

The new address for Crain, Automotive News, AutoWeek and Crain's Detroit Business is 1155 Gratiot ave., Detroit, MI 48207-2997. 313/446-0361.

(Media news continued on next page)

Internet Edition, December 12, 2001, Page 4


Only a one-word description of a patient's medical condition should be released to the media without prior patient authorization, according to new guidelines issued by the Society for Healthcare Strategy and Market Development of the American Hospital Assn., headquartered in Chicago.

The document, entitled, "Guidelines for Releasing Information on the Condition of Patients," also recommends:

-Hospitals should not release any information (beyond the one-word condition) about patients who arrive by fire department or other public ambulance -even though these cases become a matter of public record.

-Celebrities and public figures have the same rights to privacy of medical information as everyone else.

-Patients can "opt out" of providing information altogether-including confirmation of their presence in the facility.

-To safeguard patient privacy, hospitals should not routinely disclose patient room information to the media.


Ad forecasters predicted last week at the annual UBS Warburg media conference that ad spending will start to recover by the second half of 2002.

Robert Coen, senior VP at Universal McCann, said U.S. media spending will rise 2.4% to $293.3 billion in 2002, after falling 4.1% to $233.7 billion in 2001.

He believes spending will start to rebound in the first quarter, driven by increased ad spending on the Winter Olympics, congressional elections and financial services and pharmaceutical brands.

The recovery will be "fully underway by the end of the third quarter," he said.

Jack Myers, editor of Jack Myers Report, predicts spending will decline 5.7% in 2002 after falling 6.8% this year.

Lauren Fine, an analyst with Merrill Lynch, predicts spending will drop .5% in 2002 after falling 5.1% this year.

She sees a recovery coming late in the third quarter of 2002.


Martha Stewart Martha magazine's premier issue is now available on newsstands in Japan.

Between 60% and 70% of the editorial content is from Martha Stewart Living magazine, while 30% to 40% is new editorial created by Martha Stewart Japan's editorial staff led by editor-in-chief Sachiko Oshima.

The magazine has an initial distribution of 115,000 copies and will be published six times in 2002.

In the U.S., Martha Stewart Living plans to publish two more special issues in 2002, devoted to finance and travel.

Spanish-language talk show host Cristina Saralequi is ending her daily TV talk show "El Show de Cristina" on the U.S. network Univision.

The program, which has been the #1 rated Spanish-language talk show seen worldwide by an estimated 100 million viewers, will end its 12-year run on Dec. 14.

Saralequi is in the final stages of negotiations with the network to continue hosting and producing "Cristina," a version of her daily show, airing Monday nights at 10p.m. (ET).

Marcos Avila, who is Saralequi's business partner and husband, is executive producer.

Colorado's Supreme Court has extended First Amendment protection to newsletters and commercial publications that print stories of "legitimate public interest."

Justice Michael Bender, writing for the court, said it has long been held that a profit motive does not transfer a report about a legitimate matter of public concern into "commercial speech."

Courts have repeatedly held that mainstream newspapers and magazines are protected if what they publish is of legitimate public concern and is newsworthy. The same should be applied to nontraditional magazines and newsletters, Bender said.


John Lamm won the Motor Press Guild's Dean Batchelor Award for his retrospective on the original Corvette Sting Ray which appeared in the July 2001 issue of Road & Track magazine.

Laurel Lund, former editor of Delicious Living and founding editor of Natural Home, was named group editorial director of Vegetarian Times and Better Nutrition.

Sharlene Breakey, previously editor-in-chief of Working Women, was named deputy editor of Redbook.

Joe Yonan, formerly assistant metro editor at The Boston Globe, was appointed travel editor.

Chris Lawson has joined Men's Health as deputy editor/international. He can be reached at 610/ 967-5171.

Angela Matusik, from editor to features editor of InStyle magazine. She is at 212/ 522-4455.

Anthony Lewis, 74, is retiring from The New York Times. His last column will run Dec. 15.

Bruce Ingersoll, 60, a Washington, D.C.-based reporter for The Wall Street Journal, who covered the agriculture industry, died Dec. 1 of myelodisplastic syndrome.

Internet Edition, December 12, 2001, Page 7


While some PR practitioners were not smart enough to rethink their media relations campaigns just after the Sept. 11 attacks, most found journalists were approachable for the "right" kind of story, according to Peter Himler, who handles media relations for Burson-Marsteller.

"Yes, there were some knuckleheads out there issuing exploitative news releases, but the profession as a whole acted responsibly and sensitively in the face of these unprecedented and extraordinary events," Himler told 200 New York-based communications pros at a breakfast sponsored by Business Wire.

He said that "many of us were quickly pressed into action to ensure that information was communicated accurately and in a timely manner."

Himler said journalists turned to PR pros to get answers to questions, such as: Where do victims and their families go to seek assistance? Will insurance companies cover one's losses? How does one find out if his or her flight was canceled? Where can one seek professional grief counseling? What do I tell my kids?

"For these questions, and countless others, the PR professional, in the aftermath of Sept. 11, truly demonstrated his real value.

"The media not only welcomed and appreciated being fed this kind of information, but they actively sought it out," said Himler.

Himler said publicists need to be more targeted in their media outreach. "Check out the reporter online before picking up the phone or dashing off an e-mail. The right story pitched to the right reporter at the right time of day--absent a terrorist attack--should find a receptive ear," he said.


Several divisions of Chapter 11 Enron have begun to cancel their PR contracts.

Don Middleberg, whose New York-based PR firm handled Enron Credit, said he got a letter on Friday, Nov. 30, saying the retainer contract had been terminated.

"Fortunately for us, their account was current because they were good about paying their bills," said Middleberg, who noted the division had previously reduced their retainer fees.

Diane Bazelides is Enron's managing director of marketing and PR and Mark Palmer is VP of PR.

Other PR firms used by Enron in the U.S. include the Hirst Co., Albuquerque; Bates Churchill, Houston, and, Ft. Lauderdale, Fla.

"We are on hiatus, but hope to resume work for Enron once the company reorganizes," said Gary Bitner, CEO of

John Cordova, president of the Hirst Co., said his firm, which has handled Enron Transportation and Storage, based in Omaha, Nebr., for the past two years, has not gotten a cancellation notice.

The agency, which has a handshake agreement, is paid $5,000 a year to do media monitoring and community relations for the division, which operates a pipeline across New Mexico. Cordova said it will continue to do the work until told to stop.


Most PR practitioners (61%) don't know the publication or reporter they are pitching, according to a new study of South Florida editors and reporters.

While more than 50% of those interviewed listed this as their biggest complaint, 80% of journalists admit they work frequently with PR executives to gather leads and build their stories, and 94% rely on news releases as a source of information.

The study, conducted by Florida International Univ. PR students, was based on interviews with 32 broadcast and print journalists.

Out of that group, 24 are print journalists.

Questions included how journalists prefer to get news and information and whether they thought PR pros do a satisfactory job in knowing the reporters and building a rapport with them.

Among the findings:

-Fewer than 10% were interested in a local angle to a story.

-70% want fact-filled releases, and a majority were concerned about releases or pitches that buried or left out relevant but negative information.

-68% of journalists prefer to get their information via e-mail.

-63% say the releases are average to well-written.

-81% of journalists like to work with PR practitioners who know the media or beat and are understanding and polite.

-Fewer than 10% of PR people try to build a relationship with the journalist, the study said.


Redline Networks has selected Publicis Dialog to launch a B2B campaign to educate consumers about its "real-time acceleration" technology products.

Tony Tissot, Redline's director of communications, said PD was chosen in a pitch because of its strong press contacts in the New York market and its good technology background. He would not disclose other contenders.

PD's ownership by France's Publicis Groupe also helped it land the account. "We just opened a sales office in Paris," said Tissot, who formerly was at Siemens.

Tissot said PD's executive principal Lucy Siegel will oversee Redline's account. She had run her own firm before it was acquired by Lobsenz-Stevens, which in turn was acquired by PD. Veteran counselor Howard Geltzer, who sold his high-tech firm to PD in 2000, also will work on the business.

Redline received a $10 million Series B round of funding from Advanced Technology Ventures in July, and completed the move in September to a new headquarters in Campbell, Calif.

Internet Edition, December 12, 2001, Page 8



The abuse of earnings reports has reached such a stage that the SEC has warned companies they face legal action if they continue it (page 2).

Enron, which has gone spectacularly bankrupt, used a device called "Special Purpose Entities" which allowed it to have off-balance-sheet loans.

The tactic was attacked in a Wall Street Journal op-ed piece Dec. 4 by none other than a partner of Andersen, Enron's own CPA firm.

Who puts out all these misleading and confusing earnings reports? IR professionals.

For a sampling of their work, we looked at the reports via the 14 corporate members of the 17-member National Investor Relations Institute board.

NIRI, founded in 1970, promised to keep investors informed in good times and bad. NIRI was set up to be dominated by corporate, not agency people.

We found many examples of what the SEC is complaining about among the 14 reports.

The 3Q Whirlpool report (IR director Thomas Filstrup) was criticized by TheStreet.Com, which said the company's earnings are "all wet." Writer Peter Eavis said that if the earnings were given a "good wash" they could "shrink like a mohair sweater that's been through the hot cycle."

Whirlpool's own headline said it increased third quarter "Core earnings-per-share 49%" to $1.46 from 98 cents. Actually, Whirlpool lost $94M in Q3.

Eavis believes "core profits" could have been 25% lower if income were excluded from "two arguably nonoperating sources such as Brazilian tax breaks and the company's pension plan." He also wonders if the "restructuring charges" contain operating expenses since they are taken with such "regularity."

BellSouth's Q3 report spoke of an increase in DSL customers and data revenues and skipped (until the bottom of the second page) the real earnings: $7 million net in Q3 vs. $1 billion net in the 2000 Q3.

Only four of the 14 reports gave "real" earnings first. Five of the 14 lacked balance sheets.

Among the best reports were those from Olin (Richard Koch) and Tiffany (Mark Aaron). Olin reported in the first sentence a Q3 loss of 45 cents a share vs. a profit of 52 cents and said sales fell to $334 million from $413M. Tiffany said in the first sentence that sales fell 10% to $333M and net fell 34% to $24M in Q3. Cendant (Samuel Levenson) had the Q3 headlines: "Adjusted EPS of 32 cents meets current projection; Adjusted EBITDA (less interest, taxes and depreciation) increased 18% to $603M." The fourth sentence in the headline said "reported" EPS was 23 cents vs. 29 cents. It was not until the seventh page of the 12-page release that we found the full earnings stats: revenues of $2.4B vs. $1.2B and net of $210M vs. $214M (23 cents EPS vs. 29 cents). Cendant admitted in 1998 that three years of profits totaling $640M were false.

Brooks Automation (James Chiafery) reported its net loss before amortization, restructuring, acquisition charges and other items. Heidrick & Struggles (Lynn McHugh) reported an "adjusted" 21-cent EPS loss first. GAAP loss was 40 cents.

Jack Bergen is leaving the Council of PR Firms (page one), raising the question, what has this group accomplished in four years?

It's a creature of the big public ad agencies that want control over the PR agency business the same way they control the ad agency business. There are virtually no independent ad agencies left. Interpublic, Omnicom, etc., wanted to duplicate this in PR. They particularly wanted control of the PR firm rankings so they could pump in all sorts of numbers, combine operations, and boost their PR units to the top of the rankings.

The CPRF started collecting numbers, absolving all firms of supplying account lists or proofs such as W-3 forms, CPA statements, etc. This would save the parents of the big PR firms tens of thousands of dollars each in CPA fees. The takeover of the rankings did not succeed since 171 PR firms supplied the usual proofs to the O'Dwyer rankings last year. The holdouts were a dozen of the big PR firm members of the CPRF.

The top ten had paid $50,000 a year each in dues and other big firms paid nearly that amount.

CPRF started as the "American Assn. of PR Firms" in 1997. Questionnaires were sent to 5,000 firms but only 400 responded. There were just 38 founding members as of April 1, 1998. The total is now 120 out of at least 10,000 PR firms in the U.S. counting sole practitioners.

Some former members of the CPRF who are independents are going to start their own group. "We had nothing in common, we had totally different agendas from the big ad agency-owned firms," they said. Some said they were "constantly pitched to sell our businesses...we felt like little animals in a cage being looked over." One said, "When you sell to an ad agency, you become one."

The finest moment of the CPRF was the speech it hosted by former Clinton press secretary Mike McCurry in which he said the PR field needs to explain and promote itself. "We should exalt those who deal in the facts," he said. The CPRF has not promoted PR but rather integrated marketing. It believes in "campaigns that require a strong visual and emotional component," said Bergen. We had hoped McCurry would become a PR leader.
--Jack O'Dwyer


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