AUSTRALIA LAUNCHES FTA PUSH

Australia, a key ally in President Bush's 'war on terror,' has retained Mayer, Brown, Rowe & Maw to build support in the White House and Congress for a free trade agreement with the U.S. The $175K contract runs through the end of March. That's when the countries are expected to begin formal negotiations on the pact.

U.S./Australia bilateral trade runs at $44 billion a-year. The U.S. is Australia's No. 1 trading partner. Australia estimates an FTA would bolster its GDP by $4 billion.

Prime Minister John Howard, on Jan. 23, bid farewell in Sydney to the HMAS Kanimbla transport carrier which sailed off to the Middle East. A special forces unit and 14 F/A-18 Hornets of the Royal Australian Air Force are expected to see action in Iraq.

CULP RETIRING FROM SEARS

Ronald Culp, VP, PR and communications, Sears, Roebuck & Co., Chicago, is retiring at the end of February to "examine future career or business endeavors."

He said this includes plans to write a book about the 100 years of PR at Sears, from the first "PR person" Alva Roebuck to the creation of WLS Radio ("World's Largest Store") and the role PR played in building the Craftsman, Kenmore and DieHard brands.

Culp lives in Hoffman Estates, Ill. (847/286-5703). He also worked for Eli Lilly, Pitney Bowes and Sara Lee. Culp is a member of PR Seminar, Arthur Page and PRSA and attended the "Summit" of PR organizations Jan. 14 in Madison, N.J.

"I have been blessed with some incredible career experiences since becoming a newspaper reporter right out of college and going into government work before joining the corporate world," he said.
Culp added that "having reached the magical ten-year point at Sears, I have decided to retire so I can openly explore a number of other interests."

Equals Three Communications, Bethesda, Md., has picked up a $1.5 million minority outreach project from the Department of Housing and Urban Development to encourage home ownership. The goal is to inform Hispanic and African-American communities about HUD's home-buying services, including credit counseling and the availability of properties owned by HUD.

S&P WARNS, MERRILL CUTS IPG

Standard & Poor's says it will soon decide whether to lower Interpublic debt ratings to junk bond status. The ratings firm warned that IPG has "no remaining cushion in the rating to withstand any negative news or disappointing earnings performance."

Merrill Lynch ad analyst Lauren Fine also has gotten negative on IPG in the wake of the Securities and Exchange Commission upgrading its probe into the investigation of IPG's $181.3 million earnings restatement.

She penned a research note to say the SEC announcement "obviously heightens the uncertainty and risk in Interpublic shares after a year where earnings disappointments and accounting restatements clouded the shares."

While Fine believes that IPG does not have a liquidity problem, she says there is a chance that the 38 cents-a-share dividend may be cut.
Fine lowered her 2003 earnings-per-share target to 95 cents from $1.06.

FEDEX'S ROSSITER TO FIRST DATA

Greg Rossiter, director of international communications for Fedex Corp. in Memphis, has accepted the post of senior VP of corporate communications at First Data Corp., Denver. He is slated to begin work there Feb. 3.

Prior to joining FedEx in 1996, Rossiter handled corporate communications at Procter & Gamble and Sears, Roebuck & Co.

Bob Woodrum and Pepper Lunsford conducted the search at Korn/Ferry International.

TIGER TEAMS WITH DAVIES

The Tiger Woods Foundation, which runs golf clinics and exhibitions in inner-cities throughout the U.S., has retained Davies Communications, for PR and marketing support. The 501 (c)(3) group's mission is to encourage young people to "dream big dreams" so they can become full participants in the economic mainstream.

Golfer Tiger Woods and his father, Earl, founded the organization which also stresses the need of parents to become more active in raising their children. DC also is to promote fundraising activities for the planned $25 million Tiger Woods Learning Center that will be built in Orange County, Calif. CEO John Davies said Woods is "an incredible role model."

CCA RAPPED FOR PLANNING 'HATE-FEST'

The Christian Coalition of America's president Roberta Combs says her group is sponsoring a symposium to educate "Christians of faith and interested Americans about the true nature of Islam."

Nihad Awad, executive director of the Council on American-Islamic Relations, ridicules that claim, saying the two million-member CCA is planning nothing more than an "Islamophobic hate-fest." Awad believes the speakers lined up by CCA for the Feb. 15 Washington, D.C., event will only "serve to increase unthinking hatred directed at Islam and the American Muslim community.

CCA speakers include Daniel Pipes, columnist for the New York Postand Jerusalem Post, and director of the Middle East Forum; Joseph Farah, editor of WorldNet Daily.com; and Labib Mikhail, who has written more than 60 books on Islam and Christianity.

Pipes, according to a CAIR statement, wrote in the Jewish World Review that American Muslims represent a threat to the U.S. because they want to turn this country into a Muslim state. Farah wrote that "Islam has been at war with the West, with Christianity, with Judaism ever since the days of Muhammad." Mikhail believes the Koran "condones racism, violence, terrorism and killing of Jews and Christians in the name of Allah." His latest book, "Islam, Muhammad and the Koran," has chapters entitled "Islam is not a religion of peace," and "Islam is not a divine religion."

CAIR has called on the CCA to offer more "accurate and balanced" presentations. Ronn Torossian, who recently set up 5W PR in New York, is CCA's PR advisor. He also represents the Zionist Organization of America.

RF EDGES TWO FOR ZENGEN

Ruder Finn edged Rogers & Assocs. and Carter Ryley Thomas to land Zengen's six-figure PR account.

The Woodland Hills, Calif.-based biopharmaceutical company is working to develop markets for its "peptide technology." That anti-inflammatory treatment may be suited for people suffering from Alzheimer's Disease, arthritis and stroke.

Kathy Vincent, VP of RF's Los Angeles healthcare unit, leads the Zengen account.

TRUST SEMINAR POSTPONED

A full-day seminar on corporate trust at Mercy College in New York has been postponed because of insufficient registrations. No new date has been set for the $795-per-person event, which was slated for Jan. 29 and included several authors and executives.

The Sarbanes-Oxley Act, trust assessments, and leadership were all planned as topics.

Prof. Robert Schachat, author of The Seven Conditions of Trust, was to be chair. Other speakers included Steve John, head of global organizational effectiveness for Aventis; Joyce Newman of The Newman Group, and Randy Williams of Redmond, Williams & Assocs.

S.C. JOHNSON FINANCES ANTI-COAL BLITZ

Reset, a coalition backed by S.C. Johnson & Co., has hired Zeppos & Assocs., a Milwaukee-based PR firm, to create an anti-coal ad/PR blitz.

The campaign, which will run over the next six to eight months, will oppose Wisconsin Energy Corp.'s plan to add three new coal plants.

The Milwaukee Journal said Reset has received more than $150,000 from the S.C. Johnson's charitable foundation to get started.

Sam Johnson, the semi-retired chairman of the multibillion dollar privately held consumer and commercial cleaning products company is opposed to the new coal plants.

Johnson told the Journal he was inspired to help finance the coalition after meetings with Wisconsin Energy executives proved unproductive. He said the state's largest energy company refused to answer all his questions about the proposed coal plants.

Rich Bogovich, energy director of Wisconsin's Environmental Decade and a spokesman for Reset, which stands for Responsible Energy for Southeastern Wisconsin's Tomorrow, said the public affairs education campaign will point out health risks and "fuzzy" economics of building coal-burning plants.

Bogovich plans to use Zeppos to create radio and print ads that will begin running in the spring.

There are 20 members of the coalition, including Wisconsin's Environmental Decade, Citizens for a Better Environment, the town of Caledonia, All Saints Healthcare, the Clean Air Task Force, the American Lung Assn. of Wisc. and the Allergy & Asthma Network/Mothers of Asthmatics.

Rich Cieslak, spokesman for Wisconsin Energy, said he hopes "this doesn't become an issue of `who can come up with the best PR spin and the best marketing plan.'"

WS UNVEILS TYSON BRANDING PUSH

Weber Shandwick is promoting Tyson Foods' $100 million integrated marketing campaign to position the Springdale, Ark.-based company as the "world's largest protein provider" in the aftermath of the completion of its Iowa Beef Processors acquisition 2002.

That outlay is slated for advertising-created by DDB Chicago--consumer promotions, multicultural/ cause-related/online marketing and in-store events.
Founded 68 years ago as a chicken producer, the company plans to market various beef and pork products under the Tyson brand.

Tyson sold $10.5 billion worth of beef and $7.2 billion in chicken during fiscal 2002. Chicken, however, is more profitable than beef. Tyson registered $428 million in operating profit from its chicken lines, while beef profits were $220 million.

Aaryn Enos, who is based in WS' Chicago office, is among staffers working on the Tyson account.

Cathy Calhoun, the head of that office, is co-president of WS' global consumer marketing practice.

HOLSTEIN IS EDITOR OF CHIEF EXECUTIVE

William Holstein was named editor-in-chief of Chief Executive magazine, based in Montvale, N.J.

During his 30-year career as a business journalist, Holstein has been world editor at Business Week, editor-at-large at Business 2.0 and senior editor at U.S. News & World Report.

Holstein, a past president of the Overseas Press Club and currently president of the OPC Foundation, also had been contributing articles on a freelance basis to The New York Times and Fortune.

John Brandt, previously editorial director, remains at Chief Executive as editor-at-large.

Chief Executive, which was started in 1977, focuses on management issues related to international, financial, technology and automotive topics as well as analysis of business trends.

The magazine, which reaches 42,000 CEOs and their peers, is published 10 times a year. Edward Kopke is chairman/CEO of the publication.

BOOKER JOINS 'ENTERTAINMENT TONIGHT'

Chris Booker has joined "Entertainment Tonight" as a correspondent, according to Linda Blue, executive producer of the program.

"Booker," as he is known in the media world, will report on film, TV, music and fashion for the syndicated daily TV newsmagazine show, based in Hollywood, Calif.

He is currently the host of a daily radio show on K-Rock in New York, and is also the host of MTV's "120 Minutes," "The Return of the Rock" and regularly reports on music news for MTV2.

Booker will be based in New York and will travel as necessary for interviews while retaining his duties at K-Rock, MTV and MTV2.

Currently in its 22nd season, ET is taped in Hollywood. Bureaus are located in New York, Chicago, Washington, D.C., London and Tokyo.

KANTOR JUMPS TO NEW YORK TIMES

Jodi Kantor, the current New York editor of Slate, is joining The New York Times on March 1 as editor of the Sunday "Arts & Leisure" section.

She will replace William McDonald, who has been acting editor of the section. He becomes deputy culture editor.

PEOPLE

Sarah Pettit, 36, a senior editor at Newsweek who co-founded the now-defunct magazine Out, died Jan. 21 after battling lymphoma for the past year.

Bill Mauldin, 81, the prize-winning editorial cartoonist, died Jan. 22.

Al Hirschfeld, 99, who drew caricatures of celebrities, died Jan. 20.

Debi Dobbs, 49, the wife of CNN "Moneyline" host Lou Dobbs, was arrested at Liberty (Newark) International Airport on Jan. 22 for having a loaded handgun in her handbag, according to a Port Authority spokesman.

Kathleen Davis, 35, was named business editor of The Asheville (N.C.) Citizen-Times.

She will head up a weekly business publication scheduled to begin appearing in the paper in late March as well as daily business coverage.

Davis was previously business editor and bureau reporter for The Spartanburg (S.C.) Herald-Journal.

She can be reached at 828/232-5995 or via e-mail at [email protected].

Pat Maio, 44, a reporter and business journalist for more than 20 years, has joined The Desert Sun in Palm Beach, Calif. Maio had been a Los Angeles-based writer for the past six years with Dow Jones Newswires, where he covered business in Southern California.

S. Mitra Kalita, who is joining The Washington Post as an education beat reporter, was elected president of the South Asian Journalists Assn., which is headquartered at Columbia Univ.'s graduate j-school.

Adrian Mello was named editor-in-chief of Electronic Business magazine, based in New York. He is a former editor of Macworld, Upside, and Line 56.

SALON TO REQUIRE SUBSCRIPTIONS

In what appears to be a last-ditch effort to stay in business, Salon, the online magazine, is planning to require all readers to either buy a subscription for full access to stories or agree to click through several screens of advertising to gain limited access.

"There's no free lunch on the web anymore," Salon founder David Talbot told The Los Angeles Times.

More daily newspapers will soon require registration access to their websites, according to Editor & Publisher.Papers published by the E.W. Scripps, McClatchy, Cox, Media General, and Morris Communication groups are close to implementing registration policies, according to E&P.

DallasNews.com has registered over one million users, according to Belo Interactive, the Internet subsidiary of Belo Corp. which owns The Dallas Morning News. While the site is free to users, registration is required to access various content sections.

Crain Communications has renamed Electronic Media as TelevisionWeek.

Alex Ben Block will continue as editor of the Los Angeles-based paper, which will put more emphasis on current news plus cover other aspects of the TV industry, including increased attention to production, marketing, talent and new media.

(Media news continued on next page)

CAVENDER JOINS LIFETIME AS DEPUTY EDITOR

Cathy Cavender, former editor-in-chief of Rosie magazine, is joining the staff of soon-to-be-launched Lifetime magazine as deputy editor.

Hearst Corp. is offering a preview of its new magazine in ads that are running in ad trade publications and major newspapers.

The magazine, whose "real life, real women" stories will be based on the women's cable network, will be aimed at women in their 30s and compete with O: The Oprah Magazine, Real Simple, and Martha Stewart Living.

Lifetime is scheduled to publish six times in 2003 and then go monthly in 2004.


DOW JONES TO 'INTEGRATE' NEWS STAFF

Starting in February, Dow Jones, parent of Dow Jones Newswires and The Wall Street Journal, will begin a process to better synchronize and integrate the work of the journalists at both of those news outlets.

Journal reporters and DJN, which is based in Weehawken, N.J., have not collaborated or planned their coverage schedules together.

The idea "is intended to make maximum use of our resources, and free reporters to do additional news and analytical reporting rather than simply spend time doing two versions of the same story," according to a memo that was signed by Paul Ingrassia, president of DJN, and Paul Steiger, managing editor of the Journal.

The effort will focus on breaking news, such as earnings, acquisitions and economic indicators, according to the memo. "No matter who handles a story, that story or stories will have to serve all of us," Ingrassia and Steiger said.

SAJAK TO HOST NEW SUNDAY TALK SHOW

Pat Sajak, host of "Wheel of Fortune," is joining Fox News Channel to host a weekly, one-hour Sunday talk show that will book celebrities and newsmakers as guests.

The new show, which is called "Pat Sajak Weekend," will air at 9 p.m. (ET), beginning this spring.

Once the new show begins, "At Large with Geraldo Rivera" will move to 10 p.m., replacing "Fox Wire with Rita Cosby." Cosby will host "Big Story Weekend Edition" on Saturdays at 9 p.m.

Sajak will continue hosting Wheel of Fortune.

EX-GANNET EDITOR WINS SETTLEMENT

Gannett, the parent company of The Cincinnati Enquirer, will pay $550,000 to settle a lawsuit filed by former editor Lawrence Beaupre, who had accused the company of making him a scapegoat for the legal wrangling involving Chiquita Brands International.

The settlement resolves a case that began nearly three years ago when Beaupre sued Gannett, claiming that high-ranking company officials ruined his reputation to protect the company from legal action resulting from articles published in the Enquirer in 1998 about Chiquita's business practices.

The newpaper later renounced the articles and fired the lead reporter, Michael Gallagher, accusing him of lying about how he obtained tapes from Chiquita's corporate voice mail system.

The newspaper also published a front page apology to Chiquita and paid the Cincinnati-based company a $14 million settlement.

Beaupre is currently managing editor of The Scranton Times Tribune newspaper in Pennsylvania.

PLACEMENT TIPS

The Dallas Morning News plans to start a Spanish-language daily newspaper in the fourth quarter of this year. The publication, which will have its own website, will cover local, international, entertainment and sports news.

Gilbert Bailon, a past president of the National Association of Hispanic Journalists, was named executive editor.

Denis Horgan was named travel editor of The Hartford (Conn.) Courant.

Horgan, who previously was a news columnist, will also write for the travel section.

Tom Condon, who has been a reporter/columnist, was assigned to cover a new culture beat.

He will cover and review the business of arts and entertainment in Connecticut, according to Brian Toolan, editor of the Courant.

Toolan said Helen Ubinas will begin writing a new twice-weekly news column. Unlike her "City" column, which will end, the new column will focus on topics of statewide interest.

The Hollywood Reporter has opened a bureau in Miami and named Deborah Wilker as its chief.

Wilker will cover breaking entertainment news from Florida and throughout the Southeast.

Wilker will also be a contributor to "THR East," the Reporter's electronic edition that is distributed daily via e-mail throughout the East Coast.

2nd Home Living is about to be launched coast-to-coast by MausMedia, a new Kansas City-based publisher.

The magazine, which is about living well and buying things, is targeted at the six million second home owners and those dreaming about it.

It is the brainchild of Zim Loy, who left her job last May as editorial director of Kansas City Magazine and Kansas City Home Design, and her husband, Warren Maus, former ad sales executive at KCPT-TV, who was an editor of VFW's national magazine and publisher of Kansas City Live! magazine for Blue Cross and Blue Shield of Kansas City.

Loy is handling editorial content, lining up writers, and picking subjects for stories.

PR NEEDS MORE 'CHUTZPAH'

PR must earn a place at the decision table as a full partner on a company's marketing team, said Bill Marks, VP of PR for Coca-Cola North America at a recent PRSA/L.A. event. That was one of Marks' tips for 125 PR pros at the event for "successful branding and PR."

Marks said that PR pros must be professional, disciplined and clearly focused when they reach that table. Secondly, he said that it is PR's job to "insist" and "ensure" that new products have, at minimum, relevance, interest and acceptance among consumers.

Marks also said timing is critical to campaigns, noting that Monday is usually a good news day. "Timing is the only thing we can control," he said.
He called on PR pros to "find a way to put 'chutzpah' back into PR."

"Be a little pushy and get outside the proverbial envelope," he said. "But don't just think outside the envelope, act outside it too."

Marks' final tip: be credible. "We can't over claim. We must never try to 'fool' the public," he said. "We must let the product, the service, the object of our efforts speak for itself. But always make sure first, of course, that whatever it is has been properly positioned before it speaks."

Vanilla Coke from 'Leaks' to 'Launch'

Discussing his company's successful and well-publicized launch of Vanilla Coke in 2002, Marks credited early rumors and leaks with starting a buzz for the brand. He said an early item in the Financial Times [of London] gave credibility to early rumors, most of which stemmed from an initial report in Beverage Digest, a trade publication. "What followed [the Financial Times story] was a U.S. media frenzy with all kinds of reporters trying to match that story," he said. "All this happened more than a month before we were ready to launch."

To ward off repeated speculation, Marks said Coke had to come back in the media with a confirmation that the product did exist.

The company published a brief press release and simple B-roll tape which was picked up by about 700 outlets, he said.

Marks said the next challenge was to develop an event to continue to drive media coverage. He said his staff went on the Internet and found The Vanilla Bean Café in Pomfret, Conn. "It's a Norman Rockwell kind of quaint town and an honest-to-goodness mom-and-pop café. Logically, we PR types at Coke thought a setting like that just might drive some more TV coverage."

He said the event hit 1,500 local TV networks (95 percent of the TV markets) and 250 newspaper stories. Marks said PR efforts for the launch were accountable for awareness levels of 40 percent.

"First, there were the 'leaks.' Then, our confirmation of the brand's existence. Third, the launch event," he recapped. "Our staff went and found The Vanilla Bean Cafe in Pomfret. That's outside the envelope. That's chutzpah."

PVC PITCHES LOUISIANA WETLANDS

Pacific Visions Communications is driving a three-year, multi-million dollar effort for the state of Louisiana which has the oil industry and environmentalists in an unusual alliance to raise awareness of the threat erosion is posing to the nation's coastal wetlands, energy supply and seafood industry.

The "America's Wetland" campaign, which is budgeted in the $3-$4 million range, is aimed at educating the public on damage to the Pelican State's shores - most of which was caused by U.S. Army Corps of Engineers levee projects on the Mississippi River in the 1930s - and its effects on economics and industry.

The campaign's biggest corporate backer is Shell Oil, which cut a check for $3 million to be "world sponsor." Louisiana's coastal wetlands - 40 percent of the nation's wetlands - are traversed by pipelines and dotted by platforms and refineries which handle 25 percent of the U.S.'s energy supply. Shell alone employs 2,500 in the state.

The state has lost a land mass equal to the state of Rhode Island and estimates 35 square miles a year are disappearing under water.

PVC president Val Marmillion told this NL his firm came to the attention of the state for its work on a national campaign for the U.S. Dept. of Education, National Endowment for the Arts and NASA regarding the exploration of the planet Mars.

Gov. Mike Foster estimates it will cost $14 billion in federal and state funds to restore and protect Louisiana's eroding coastal wetlands.

McIlhenny Corp., the maker of Tabasco sauce which is involved in a task force set up by Foster, has agreed to put the "America's Wetland" label on Tabasco bottles as part of the campaign. Ducks Unlimited and Time for Kids have also agreed to support initiatives.

WHITE HOUSE SETS UP GLOBAL PR UNIT

President Bush signed an Executive Order on Jan. 21 that formally establishes the White House Office of Global Communications to "promote the interests of the U.S. abroad, prevent misunderstanding, build support for and among coalition partners and inform international audiences."

White House aide Tucker Eskew has been running such an office for about six months, dealing with the foreign media to pitch the American line.
Bush's EO promises "truthful, accurate and effective messages" about the U.S. Government, America's people and culture.

The Office, after consulting with the State Dept., may coordinate its activities with foreign governments. It will work closely with State and Defense Depts. to ensure "rapid response to allegations and rumors in the war on terror."

A White House fact sheet says the OGC will help the President relay his message of "dignity, security and liberty for all people everywhere."

The Bush Administration not only has to fight a possible war against Iraq but a war to win U.S. and world opinion to its side. It's a classic PR struggle involving the influencing of public opinion.

Based on opinion polls, the Administration has yet to "convincingly explain" its case for the war to Europeans, wrote Newsweek international editor Fareed Zakaria Jan. 27.

Anti-war opinion is running at 81% in Germany and 82% in France. Zakaria called the numbers "truly staggering." About two-thirds of the French were against the first war on Iraq in 1991.

In the U.S., approval of President Bush has dropped to 54% from 90% just after 9/11 says a WSJ/NBC poll. U.S. attempts to win support in the Muslim world, led by PR chief Charlotte Beers, have not been successful. She has mostly advocated ads as a means of reaching Muslims.

The media, meanwhile, are accused of undercovering anti-war demonstrations and failing to encourage the type of spirited debate that preceded the initial Iraqi invasion. The Administration has to come up with new evidence of the threat posed by Iraq. It is saying it can't reveal the evidence because of security considerations.

New York PR counselor Robert Dilenschneider, commenting on the Jan. 14 "Summit" of PR leaders aimed at "restoring trust" in corporate America, said "restoring" is the wrong word because "poll after poll shows that trust in business institutions has never been there." He also feels that failing to link profit margins and trust is "ridiculous" because "a company that is not trusted cannot succeed, even in the short term." Business, said Dilenschneider, must consider the causes of mistrust including the "gaps in pay and wealth that exist in the workplace" and the numerous recent "corporate trangressions." The output of the entertainment industry is causing a decline in decency and civility, he feels.

While on the subject of entertainment, the Economist said Jan. 18 that Americans, in a lackluster economy, are entertaining themselves at a record rate. Movie revenues rose 12% in 2002 to a record $9.4 billion. Sales of DVDs were up 61%. Video games had a great year, worldwide sales reaching $31B. Investment bank Veronis Suhler says spending on pay TV rose 9%. TV and radio usage continues at a high rate. It could be that Americans want an escape from harsh reality. PR firms should think of campaigns that will entertain consumers

On the subject of "gaps in pay and wealth," Newsweek's Robert Samuelson points out that the top 1% of earners received 18% of total income in 2001, up from 9% in 1979. The Bush tax cuts would give 59% of the money to the top 10% of earners, according to the Brookings Institution.

The strict new code for reporters of the New York Times (1/22 NL) seems to forbid staffers from appearing at media workshops of the Publicity Club of New York. Reporters are not supposed to take part in "PR workshops that charge admission" or that tell PR pros "how to deal successfully with media." NYT reporters are told not to be too friendly or "cozy" with news sources and warned that "romantic involvement with a source would foster an appearance of partiality."

Oddly, the engagement of executive editor Howell Raines, 59, and Krystyna Stachowiak, 38, a PR counselor, was announced this month. Staffers are supposed to report romances to editors. But are readers aware of them?

What about NYT reporters who are married to PR pros, of which there are several? A list should be published. The 53-page code is at www.poynter.org (Talk About Ethics on right side)

Expense accounts have shrunk not only in the PR field but in general. "The new stinginess cuts across the spectrum of American business," said the NYT Jan. 19. Numerous anecdotes were told such as the refusal of one lunch partner to pick up the whole bill as promised once he saw it.

PR counselors who are price-cutting or doing more for the same fee are examples of deflation, which is starting to show up in the economy and which can be worse than inflation. TVs, computers, telephones, sportswear and many other items suffered price declines in 2002, says the Bureau of Labor Statistics. One bad thing about deflation is that businesses won't borrow because the value of money goes up and it gets more expensive to pay it back.

Deflation has wracked Japan for ten years in the wake of the crash of real estate prices.

If Interpublic may sell its NFO research unit (1/22 NL) to raise cash, it may also be thinking of selling PR units. It owned the 11th largest PR firm in the early 1980s (Infoplan with 103 employees in 10 countries) but sold it off around 1985. It purchased 5% of Edelman PR Worldwide in 1985 by giving Edelman the PR unit of Daily Advertising in L.A. and S.F. IPG and Edelman didn't get along and Edelman bought back the 5%. The tight-lipped, client-oriented culture of IPG is at odds with the culture of PR, which promises "transparency."

NFO owners got $500 million of IPG stock back in 2000 when IPG was around $40 a share. This sank to as low as $9 and is now around $15. NFO sellers had the right to pull out if IPG sank to $44 but the deal was pushed through. IPG's bonds are close to "junk" status and Mark Sellers of Yahoo!'s morningstar.com on 1/22 called IPG one of five stocks that look like "value traps."

Such stocks look good because they're "so beaten down" but investors should be cautious, he advises. A stock that looks "really cheap" can get "cheaper," he warns.
--Jack O'Dwyer