Readaloo

Cocoa beans are dried in South Sulawesi, Indonesia. A London firm has bought up so much cocoa that candy makers are nervous.

To some, he is a real-life Willy Wonka. To others, he is a Bond-style villain bent on taking over the world’s supply of chocolate.

In a stroke, a hedge fund manager here named Anthony Ward has all but cornered the market in cocoa. By one estimate, he has bought enough to make more than five billion chocolate bars.

Chocolate lovers here are crying into their Cadbury wrappers — and rival traders are crying foul, saying Mr. Ward is stockpiling cocoa in a bid to drive up already high prices so he can sell later at a big profit. His activities have helped drive cocoa prices on the London market to a 30-year high.

Mr. Ward, 50, is not some rabid chocoholic, former employees say. He simply has a head for cocoa. And, through his private investment firm, Armajaro, he now controls a cache equal to 7 percent of annual cocoa production worldwide, a big enough chunk to sway prices.

“Globally, he is unmatched in his knowledge of cocoa,” said Tim Spencer, a former Armajaro executive.

Armajaro maintains offices in West Africa, helping Mr. Ward keep tabs on major cocoa crops. “We even have our own weather stations — our very own that no one else has in some parts of the world,” Mr. Ward, soft-spoken and tan, said in a video interview this year with a financial news service.

Now, traders here are buzzing that Mr. Ward has placed an audacious $1 billion bet in the London market for cocoa futures. This month, he bought 241,100 metric tons of beans, they say.

His play has some people up in arms. While some see it as a simple bet that cocoa prices will rise on falling supply, others say Mr. Ward has created a shortage of cocoa simply to drive up the price himself.

The German Cocoa Trade Association and others wrote an angry letter to the London exchange on which cocoa is traded, demanding that it take action against what the association characterized as a “manipulation.”

The British news media has christened Mr. Ward “Chocolate Finger,” a nod to the Bond villain Auric Goldfinger. And on Facebook, someone has created a “Choc Finger” page featuring Mr. Ward’s face superimposed on a pig that is bellying up to the trough.

The fear is that Mr. Ward will become the go-to source until the annual cocoa harvest, which starts in October. With candy makers starting to stock up for the holiday season, they may be forced to pay him ever-higher prices — and cocoa has already jumped 150 percent since 2008.

“The squeeze was really timed perfectly,” said Eugen Weinberg, an analyst at Commerzbank in Frankfurt.

Mr. Ward and his firm, which has not acknowledged buying the cocoa contracts, declined to comment for this article.

Attempts to corner a particular market come and go in the rough-and-tumble world of commodities trading. During the 1970s, Nelson Hunt and his brother, William, tried but failed to corner the world market in silver.

While Mr. Ward lords over the world of cocoa, he is a bit of a mystery outside of that universe. Former employees, acquaintances and peers say that, in person, he does not fit his villainous nickname, and characterize him as friendly and intelligent.

Despite rattling the markets with large investments, Mr. Ward prefers to keep a low profile.

After working as a motorcycle courier, Mr. Ward was introduced to commodities in 1979, when he became a trainee for the tea, rice, cocoa and rubber operations at the conglomerate Sime Darby.

He first made his mark in cocoa with a big bet in the mid-1990s, when he was at Phibro, then the commodity trading arm of Salomon Smith Barney.

Mr. Ward opened his own firm in 1998 with another founder, Richard Gower. Its name, Armajaro, is a mixture of their four children’s names.

Mr. Ward’s appetite for risk extends beyond the cocoa market. He is also an avid rally racer who once drove a red 1947 Allard sports car thousands of miles in a race from London to Cape Town. He plans to race in a similar rally in January in a 1971 Ford Escort.

His fellow driver will be Mark Solloway, who was badly injured in a crash involving Mr. Ward in 2002 in Poland. When Mr. Solloway ended up in a local hospital, a distraught Mr. Ward, who had been driving their car, arranged for a private jet to fly him to London for treatment.

“He’s the greatest and most generous person,” Mr. Solloway said.

Mr. Ward lives with his wife and two sons in a four-story red-brick town house in the upscale Mayfair district of London. A brisk, 15-minute walk away are Armajaro’s offices, housed in a Georgian mansion with marble floors, soaring ceilings and a courtyard.

At first, Armajaro focused solely on cocoa. Later, it started trading coffee and then other agricultural commodities.

Today, Armajaro manages more than $1.5 billion in assets, mostly in hedge funds. But through another business, it remains one of the world’s largest suppliers of cocoa. It has buying operations in the Ivory Coast, Indonesia and Ecuador.

By most accounts, Mr. Ward profited handsomely by orchestrating a similar cocoa squeeze in 2002. That move, which earned him his chocolate-themed nicknames, caught the attention of financial regulators here, but their findings were never made public.

This time, seeing an even bigger investment, some cocoa organizations complained to the exchange, threatening to take their trades elsewhere. In a letter, the exchange said its investigations had turned up “no evidence of abusive behavior.” A spokesman for the exchange declined to comment further.

In any case, chocolate lovers should not worry too much, analysts said. Cocoa accounts for only about 10 percent of the price of most ordinary chocolate bars.

The situation could change, however, if the next cocoa harvest falls short of expectations — or if Mr. Ward keeps buying.

“That really scares us. That he would double up the bet and buy more September contracts,” said a London cocoa trader who asked that his name not be used because he might want to do business with Armajaro in the future. Still, the trader seemed in awe of Mr. Ward’s play, adding: “If I had the guts and money, I would do that, too.”

Chinese Vice-Premier Zhang Dejiang passes by the Erechteion temple during his four-day trip to Athens on June 16, 2010.

China is hunting for bargains in some unlikely corners of the world. Earlier last week, it opened its checkbook to make 14 commercial investments inside Greece, which is struggling to avoid defaulting on its mounting debt.

China's vice premier Zhang Dejiang signed off on each contract, securing deals in major industries such as telecommunications, real estate and shipping during his four-day visit to Greece, which began last Monday.

Among the contracts signed was a $123 million contract between Helios Plaza and BCEGI, a Chinese real estate company intent on developing a hotel and commercial complex for tourism in Piraeus, Athen's largest port town. Huawei Technologies, a Chinese telecom solutions provider, also inked a deal with Hellenic Telecommunications Organization SA. The company will equip the tourism complex BCEGI is financing.

Chinese investments in Europe have been relatively insignificant in recent years. But its deals with Greece paint a new picture of China's financial landscaping. According to Greek officials, the 14 deals signed this week mark China's largest foray into investment in Europe. And there will likely be many more to come.

China's brokered deals with Greece point to its ulterior power playing and market building strategy. It is getting in on the cheap in a region that's economically depressed and at the same time, it's purchasing a favorable reputation in Europe and around the world. It is making a stealthy land grab.

Stakes all over the world

With the global economy muddled in a sluggish recovery, few governments have been out to shop and invest. China, however, has gone forward to wine, dine, and conquer market shares that some Western nations deem insignificant or even scoff at -- Greece is just one example.

In the past five years, China has made other market building bargains in otherwise overlooked countries, including Costa Rica, Sudan and Zimbabwe. While the United States is heavily financing the war in Iraq and Afghanistan, China is taking advantage of U.S. security there and negotiating oil field contracts and managing the Anyak copper mine, home to one of the largest deposits of the metal in the world.

China's deals with smaller countries might strike some as surprising, or even insignificant. But in those parts of the world, the impact can be significant. Costa Rica and Taiwan broke diplomatic ties after 60 years in 2007 when the small Central American country welcomed China's interest in trade and investment. China has donated $83 million to Costa Rica to assist the country in building the Costa Rica National Stadium.

Some experts say that the recent multibillion-dollar China-Greece contracts are merely part of the country's global growth strategy, although it's surprising they haven't garnered more attention.

"It's nothing new," says Richard Lee, a foreign exchange trader for a global macro fund who wrote about the deals at The Daily Reckoning. "What's really unique about it is that it's covert. If the U.S. had these deals, if Russia had these deals, people would be talking about it." Lee cited China's recent promise to lend Venezuela $20 billion in exchange for crude oil as another example.

Indeed, because of its discretion, it is difficult to map China's ever-expanding land grabs.

But it's not something that should be ignored, since it's becoming increasingly difficult to determine where China's business interests begin and its government interests end.

"The big story is that the Chinese government and its business capital are all intertwined, with the Chinese Communist Party appointing many heads of corporations and banks," says Clayton Dube, Associate Director of the U.S.-China Institute at the University of Southern California.

Will it pay off? China obviously sees opportunity where others see risk. For both the Chinese government and businesses, easing Greece's commercial vulnerability is an opportunity for China to gain praise, trust and recognition. If China succeeds, says Dr. Cheng Li, Director of Research and senior fellow at the John L. Thornton China Center of the Brookings Institution, it will open the door to a larger European market full of opportunities.

Europe better prepare itself. "It will see China in a new light," says Cheng.

Whatever Microsoft paid American Idol host Ryan Seacrest to hype the rollout of Bing's new entertainment search tool Tuesday night was money wasted, as far as William Smead, CEO of Smead Capital Management, is concerned.

Seattle-based Smead Capital holds a large block of Microsoft shares on behalf of institutional investors. It irks Smead that Microsoft is sitting on some $31 billion in cash, pays comparatively low dividends, and yet continues to spend heavily on search advertising, as it has done unprofitably for several years.

"Insanity is doing the same thing over and over and getting the same result," says Smead, a money manager for more than 30 years. "They're wasting my clients' money and that makes me unhappy."

Microsoft's share price closed Wednesday at $25. 31, down 46 cents, suggesting other big investors were likewise unimpressed by Bing's new Hollywood ties. Even so, Jack Gold, tech industry analyst at J. Gold Associates, says it makes sense for Microsoft to continue investing in search advertising. "While not a key money maker right now for Microsoft, the amount advertisers spend on search ads is growing dramatically," says Gold.

Google, of course, almost single-handedly shaped search advertising into what it is today. In 2009, the search giant generated $23.7 billion in revenue -- 97% of it, or $22.9 billion -- derived from search ads. Advertisers continued to increase what they spent on search ads even through the worst part of the economic downturn, says Matt Rosoff, analyst at research firm Directions on Microsoft.

Now Google is using its dominance of search ads as a springboard to come after Microsoft's core Windows and Office money-makers with Internet-delivered Google Apps initially targeted at small businesses, as we reported in this cover story. By going after search ads, "Microsoft is returning the pressure," says Rosoff.

Yet money manager Smead says Google doesn't really pose much of a threat to Microsoft's massive and deeply-entrenched Windows and Office businesses. Big investors continue to hold Microsoft shares, he says, largely because Windows and Office remain far and away the world's best selling software products, with operating profit margins topping 70%.

And Microsoft is on the verge of enjoying a long run of robust growth in revenue and profits as companies and consumers around the world inevitably begin to replace aging Windows XP and Vista PCs with new Windows 7 PCs, preloaded with Office 2010. And yet Microsoft's share price continues to stagnate -- as it has for most of the past decade -- at roughly half its December 1999 peak, adjusted for splits.

Wall Street remains skeptical about CEO Steve Ballmer's ability to execute his vision to tap into search advertising and make it another Windows/Office-sized profit center, says Smead. The blending of Bing and Yahoo search services later this year is not likely to change the minds of savvy investors. Even if everything about that partnership plays out perfectly, Smead calculates that Microsoft stands to earn only a meager return on the multi-billions it has already poured into its attempt to become a search advertising powerhouse.

Smead would like Microsoft to start paying higher dividends, or to focus on investments that directly strengthen Windows and Office. "They've been squandering massive amounts of free cash flow chasing down rabbit trails," says Smead. "To do this, they've stolen cash that should have gone to the owners of the business, their shareholders."

Gold defends Ballmer's diversification plays. "Bing will be a key strategy for Microsoft's efforts in the Internet cloud, an area it must aggressively attack if it wants to remain profitable and a leading player in the industry long term," says Gold.

But investors' patience could be running out. Microsoft initially entered the consumer Internet space some 15 years ago with the launch of its MSN portal. Today its consumer web pages, anchored by Windows Live services and encompassing Bing,"make up less than 5% of Microsoft's revenues, and is on track to lose about $2 billion this year," notes Rosoff, who has been tracking the company's strategic moves since 2000. Rosoff observes:

The company's track record might give investors pause. Microsoft's consumer online businesses have never been able to turn their large audiences into big money. That said, the relaunch of the search site as Bing in mid-2009 was a positive move. The product is dramatically improved from its early days, and the company has clawed back some market share. So I do think that Bing and the forthcoming deal with Yahoo might stop Google's market share growth. But I would be very surprised if search advertising ever becomes a Windows-sized, or Google-sized, business for Microsoft.

Via:Mashable

As dumpster diving and extreme anti-consumerism edge their way into the mainstream, more and more renting seems like an easier way to “go green” while cutting costs.

While not everything should be rented, (toothbrushes, underwear, I can go on) most things can be, and it shouldn’t come as a surprise that you can borrow just about anything without having to leave your home, or office, or coffee shop – basically anywhere you use your computer. Log on to these sites and let the wonder of temporary ownership begin.

Books

People have been renting books since as early as fourth century BCE, but only recently have they been able get their lit fix without logging off the Internet () or succumbing to the annoyance of a due date.

There are a number of “Netflix for books” businesses that allow bookworms to read and return books at their own pace. Book Swim prices its plans depending on the number of books taken out at one time (a “devout reader,” with 11 books rented at a time, pays about $60 per month). Books Free, which isn’t actually free, offers similar plans but restricts the type of content you can order based on which plan you sign up for (starting at $10.99 per month for two-at-a-time paperbacks).

Since the average college student spends about $1,100 on textbooks a year, it is not shocking that textbook rentals are becoming an increasingly booming business. Deciding between the myriad of sites that offer the service might come down where you’d rather direct your goodwill. Rent a book from Chegg and they’ll plant a tree; rent a book from Book Renter and they’ll donate a book to a low-income child.

Movies

Gone are the days of going all the way to a rental store to rent a DVD, then having to deal with late fees if you kept it for more than a specifically allotted amount of time. Thanks to Netflix, anyone can rent movies by mail with no late fees or due dates. Plans starting at $8.99/month also come with unlimited streaming of tens of thousands of movies and TV shows over the web.

Netflix users can stream movies over their computer or to their televisions via a connected device like the Wii, Xbox, PlayStation, Roku or any number of televisions and Blu-ray disc players. Many connected devices can also stream movies from Amazon Video on Demand, which offers 24-hour movie rentals starting at $0.99/per movie.

Another option for streaming video rentals is Apple’s iTunes, which offers thousands of movies and television shows for rent starting at $1.99 ($3.99 for HD). iTunes rentals can be streamed via computer or via the Apple
TV device.

Soon, other media center devices and software like the forthcoming Boxee Box and Google TV should offer additional home streaming media rental options.

Friends

Your mother may have told you that money won’t buy you friends, but your mama lied. There actually are firms that provide stand-in relatives, friends, boyfriends, and even groomsmen (complete with cheesy speeches about why you’ll always be “bros”). It may sound like the gimmick in a less than stellar rom-com (ahem The Wedding Date), but it’s a modest yet growing industry in places like Japan. So while renting your buds may be a less-established practice in the United States, there are still plenty of resources for those willing to admit their social circle is lacking and don’t mind shelling out a few bucks for some company (not that kind of company, get your mind out of the gutter.)

The website aptly named Rent A Friend charges a small fee to browse profiles by zip code. Would-be friends list what they’re up for –- which could everything from being your date to prom, to spending a Sunday afternoon taking a hot air balloon ride (weirdly specific, no?). So just who are these people eager to be your pal-for-pay? Profiles include anyone who the site’s “Party! Enjoy Life! Make Friends! Get Paid!” job description appeals to. Contact them to negotiate what your friendship is worth in an hourly rate.

Rent a Local Friend is another friend rental option that is great for those traveling on their own. The site sets up travelers with locals who either join them for a day as guides, or offer a list of insider tips so you can get the most out of the city. It’s a good way to get off the beaten path while traveling and the prices, which vary throughout the 15 available cities, are comparable to professional tours.

Dresses

Few women have $3,000 to spend on a dress, so many spend Monday nights coveting the wardrobe on Gossip Girl and wishing they could somehow afford a closet full of designer labels. All that wishing appears to have worked, and thanks to a slew of dress-rental sites, you don’t have choose between paying your Internet bill and investing in a seriously amazing wardrobe.

Typically these sites allow users to rent dresses for the price of about 10 percent their retail value. The dresses are delivered on a scheduled date, worn, and returned with minimal denting to the wearer’s wallet. Some sites, like Rent the Runway, which has a wait-list to become a member, and Wear Today, Gone Tomorrow, only allow members to browse and rent. Other sites, like Girl Meets Dress, allow browsing before membership.

Women’s bodies are unique and it’s frustrating because designer sizing is not. The sites have different strategies for dealing with fit. Rent the Runway allows renters to choose two sizes of the same dress so you can decide what fits best, while Wear Today, Gone Tomorrow has created a standardized sizing chart to guesstimate the right size. Girl Meets Dress actually allows its customers to schedule a date to try-on a dress before the big event. Renters ship the dress back the same day. If it fits, it’s redelivered. If not, more try-on dates are scheduled. Keep in mind, if you are all about saving money while getting the best fit, for all of these sites you can hit up your local Bloomingdales and try on the fashions before you rent.

Every woman knows that a dress alone is not enough. You need the shoes and the bag, and probably some jewelry too. Snag that Channel clutch you really can’t afford but really want from sites like Bag, Borrow, or Steal — which will also loan you designer sunglasses, jewelry and watches, Rent Me A Handbag, which is more than happy to lend out some Prada pumps, or Hand Bag Club, which has a nice selection of arm candy, as well.

Kid stuff

The number of children per family in the U.S. is averaging at about two, so it doesn’t make much sense for most people to buy kid things under the premise that they’ll be reused several times by future spawn. Fortunately the birthrate and the number of kid-related rental sites seem to be inversely related.

Cash-strapped parents will appreciate the rental packages at Rent Baby Toys, or Rent That Toy, a site that lets you rent specific toys, like the Kawasaki Ninja Tough Trike at $20 per month. New parents already dealing with maneuvering a stroller, and want to live as light as possible, may enjoy the Traveling Baby Company or Baby’s Away for temporary baby supplies while traveling. More savings and recycling can be had at Wear and Share, to avoid having to buy new baby clothes as fast as your child outgrows them.

Pets

Did you have a dog growing up, and miss throwing around a ball with old Fido? Do you live a busy life and don’t know if you can handle the responsibility of a full-time pet? Then maybe Borrow a Pet, is something to try. The organization facilitates pet lending in the name of “reducing the number of abandoned pets.” The idea is that by doing the good deed of putting their pet up for lease, pet owners can give pet seekers a better idea of what they’re getting into before it’s too late. The number of participants is still pretty slim, but the site launched less than a year ago.

Following a similar try-before-you-buy theory, many branches of the Humane Society, such as Marin in California, also have trial adoption programs that allow potential adoptive parents to take pets home for an extended period of time before committing to a full adoption.

On a less altruistic note, a growing number of hotels, including select locations of the Ritz Carlton and Fairmont, FlexPetz, in New York, L.A. and London provides members with local access to dogs who were rescued or re-homed, but are fully trained.

Members can choose to spend just a few hours or a number of days with each dog. After new members have completed an introduction session with a trainer, they can use the online reservation system to book “doggy time” for fun with their temporary canine pal. The company has plans to expand to San Francisco, D.C., Paris and Boston, if they get the Massachusetts 2008 ban on renting pets overturned.

[What do you think of the concept of renting pets? Good idea or twisted? Sound off in the comments. -- Ed.]

Everything Else

Non-virtual rental shops are increasingly accessible on the web. Rentcycle makes it easy to find stores and search their inventory. All the rental shops listed are browsable by location and specialty, but if a rental shop nearby has chosen to sign up for Rentcycle, you’ll also be able to browse their inventory and check availability online.

For items like doughnut fryers, lecterns or Santa hats, there are several sites that allow you to target your neighbors for these less mainstream items.

Zilok lists more than 100,000 searchable items from both rental businesses and individuals. Renters set a price per day, week, or month as well as a deposit amount. Browsers can book items online and contact the owner to set-up an exchange.

Rent Instead and Rentoid are similar concepts with slight variations. Rent Instead offers a shipping option for out-of-area items, and Rentoid avoids bogus items by charging $4.00 per posting.

If you can’t find what you’re looking for — say a competition figure skating dress — Zilok has a function that allows you to send a rental request to registered renters in your area, while Rentoid similarly hosts a “wanted” board for posting requests.

Have you ever rented anything online? What was your experience? Let us know in the comments.

Coca-Cola is in the process of launching three fruit-based drinks this summer. The company is expected to launch two products under the Minute Maid brand, and a mango shake in the dairy segment under the Maaza brand by June this year.

“Coca-Cola India is currently test marketing Minute Maid Apple Juice and Minute Maid Mixed Fruit juice in Kolkata. Based on the response, we will take a call to roll it out in other parts of the country,” confirmed a Coca-Cola India spokesperson in response to an email. The spokesperson, however, declined to comment on the company’s entry in the dairy segment with a mango shake under the Maaza brand.

Coca-Cola is not present in the dairy segment elsewhere in the world. India would be its first test-ground for the segment when it launches the mango shake. Coke is the beverage sponsor of the upcoming Commonwealth Games. Analysts say it would leverage these launches during the Games to capture consumers’ mindshare.

“Getting into allied products (mango shake) is a well-thought move since it will require only re-constituting the existing product (the pulp left from Maaza formation can be re-processed into shake). There is more synergy into it,” said an analyst. The only challenge would be a better chilled supply chain to reduce spoilage, as dairy products are more temperature-sensitive than soft drinks and have shorter shelf life.

Cola companies, note analysts, are launching fruit-based drinks as people have become more health conscious. Even FMCG companies are entering the juice segment. In the past, Pepsi had launched Tropicana and Nimbooz. Dabur is bullish on its Real range. Parle Agro also launched LMN (lemon drink). Wipro Consumer recently launched few fruit variants of Glucovita (glucose concentrate) and it wouldn’t be surprising if Wipro moves from juice concentrate to ready-to-drink juice soon.

Anand Ramanathan, sector analyst from KPMG, reasons: “Margins are better in juice-based drinks than carbonated drinks, as juice is a premium segment while carbonated drinks is a mass segment. Juice will be the future growth driver for cola companies.”

Carbonated drinks is a Rs 14,720-crore market in India, while juice is a Rs 2,670-crore market. But the juice segment is growing faster than carbonated, according to analysts.

Coca-Cola, according to a source close to the development, is also considering a Guava variant and has a plan to expand Minute Maid into a full juice range in the coming two years.

Bernie Madoff, who is scheduled to be sentenced June 29 for perpetrating history's biggest Ponzi scheme, is just be the latest in a long line of industry titans turned crooks

Bernard Madoff

Bernard L. Madoff Investment Securities LLC

Pleaded guilty: March 12, 2009 to 11 charges of fraud

Next to Bernie Madoff, the rest of the sticky-fingered CEOs on this list seem like dime-store shoplifters. Madoff's decades-long, $65 billion Ponzi scheme, which came to a screeching halt with his Dec. 11, 2008 arrest and earned him 150 years in prison, is perhaps history's biggest financial swindle, and his trademark thin-lipped smile became the defining image of the avarice that last fall nearly brought the global financial system to its knees. What made his deception doubly painful was Madoff's sterling reputation—for years, he was regarded a pillar of the investment community, a taciturn superstar whose clockwork returns had clients nearly breaking down his door. From the 17th floor of the Lipstick Building in Manhattan, the 70-year-old money manager bilked thousands of investors, picking the deep pockets of his country-club counterparts, bankrupting charitable foundations, ransacking tycoons and celebrities alike. When he pleaded guilty in March to federal charges that carry up to 150 years in prison, millions cheered his comeuppance. What we've yet to come to terms with, however, is the way in which his unalloyed greed exposed our own.

Kenneth Lay & Jeffrey Skilling

CEOs: Enron

Convicted: May 25, 2006 of fraud and conspiracy

Enron imploded with breathtaking speed in the early 2000s, going virtually overnight from being the nation's seventh-largest company to a bankrupt shell synonymous with corporate greed and deceit. Kenneth Lay and Jeffrey Skilling were at the helm as the company collapsed, taking the jobs and savings of thousands along with it. Lay helped create Enron in 1985 as a natural gas provider and presided as it grew into an energy-trading behemoth worth some $68 billion in 2000. Skilling joined in 1990 and, as he rose, pushed an aggressive growth strategy that, in retrospect, relied on shady accounting to reflect chimerical profits. In 2001, Skilling briefly became the company's CEO while Lay moved to chairman; Skilling abruptly resigned months later as the energy giant neared the breaking point, later cashing out nearly $60 million in stock. The company filed for Chapter 11 on December 2, 2001 — at that point the largest bankruptcy in U.S. history.

Skilling and Lay were tried together and convicted in May 2006 on fraud and conspiracy charges. Lay died of heart disease two months later while awaiting a prison sentence that could have lasted 45 years. Skilling was fined $45 million and is currently serving a 24-year sentence in federal prison. He has appealed his conviction.

 

 

Dennis Kozlowski

CEO: Tyco International Ltd.

Convicted: 06/17/2005 of misappropriation of corporate funds

In a 60 Minutes interview defending his innocence, former Tyco CEO Dennis Kozlowski maintained that "nothing was hidden." That's for sure. Innocent or guilty, Kozlowski clearly wasn't modest, living a life of opulent luxury. The question of the case wasn't whether he took the money (he did), but rather whether he was authorized to do so — an issue he considered a jury unfit to rule on. "I was a guy sitting in a courtroom making $100 million a year and I think a juror sitting there just would have to say, 'All that money? He must have done something wrong.'"

There's no denying Kozlowski led a lavish lifestyle. His $30 million New York City apartment was allegedly paid for by the company. (The shower curtains alone, it was revealed in court, cost $6,000.) Tyco also footed half of the $2 million bill for an extravagant birthday party for Kozlowski's second wife in 2001. Disguised as a shareholder meeting, it took place on an Italian island and featured an ice sculpture of the Statue of David urinating Stolichnaya vodka. The bash—which became known as the Tyco Roman Orgy—probably didn't help his case. Kozlowski is currently serving up to 25 years in prison.

 

 

John Rigas

CEO: Adelphia Communications Corporation

Convicted: 07/08/2004 of bank, wire and securities fraud.

John Rigas' story is an increasingly common version of the typical American dream: from rags to riches to Federal court. Born in a rural New York town to Greek immigrant parents, Rigas was busing tables by the age of nine, joined the Army during World War II and earned a bachelor degree in management engineering, working nights at his family's small movie theater. Starting with a stake in a small cable TV franchise, the Rigas family built the Adelphia Communications Corporation, the fifth largest cable provider in the country, with 5.6 million customers in 30 states. But he was forced to retire as CEO in 2002 after being indicted for securities, bank and wire fraud; prosecutors charged him with the personal misuse of corporate funds and with hiding $2.3 billion in liabilities from investors. Rigas was convicted and sentenced to 15 years in prison; Adelphia filed for bankruptcy after admitting that the former CEO and his two sons had failed to record $3.1 billion in loans. Rigas, who petitioned for a Presidential pardon in January 2009 and was rejected, will be 92 years old when his sentence runs out in 2017.

 

 

Joe Nacchio

CEO: Qwest International

Convicted: 4/19/2007 of insider trading. Appeal pending.

In the wake of a multibillion-dollar accounting scandal that nearly destroyed the Denver-based telecommunications company, former Qwest CEO Joe Nacchio was convicted in April 2007 on 19 counts of insider trading. Prosecutors said he illegally sold $52 million in stock in 2001, even as he knew the company was taking on water. Nacchio was sentenced to 6 years in prison but remained free on $2 million bail pending an appeal.

In 2008, a U.S. appeals court overturned Nacchio's conviction, saying a key expert witness had been wrongfully barred from testifying. But the ruling was hardly a vote of confidence in the disgraced executive: the judges also concluded there was sufficient evidence to convict him. This February the guilty verdict was reinstated, and Nacchio was ordered him to serve out the remainder of his term. In a last-ditch effort to stay out of the slammer, Nacchio asked a federal judge in March to reconsider his request to remain free on bail while he appealed to the Supreme Court for a new trial. No such luck: in April he was ordered to report to prison. Nacchio is now sharing a cell at a minimum-security Federal prison camp at Minersville, Pa. His Supreme Court appeal is still pending.

 

 

James McDermott Jr.

Canadian pornographic film actress Kathryn Gannon, known as "Marilyn Star," is accused of illegally profiting from inside information gained from an intimate relationship with James McDermott Jr., former chief executive at an investment bank.

CEO: Keefe, Bruyette & Woods

Convicted: April 27, 2000 of insider trading

Once upon a time, James McDermott earned $4 million a year as chairman and CEO of the Wall Street investment bank KBW, making regular appearing on CNBC and CNN to showcase his financial prowess. Until, that is, he brought his business expertise into the bedroom. In December 1999, McDermott, a married father of two, was arrested for leaking secrets about five pending bank mergers to his mistress. The "McDermott mess" took a turn for the tabloids when it was discovered that his mistress, Kathryn B. Gannon, had some secrets of her own — she was an X-rated film star with another lover on the sly who, along with Gannon, had made an estimated $80,000 off of McDermott's tips.

McDermott's lawyers blamed his lapse in judgment on alcohol, depression and family problems. "During this trial I was called a stud stock-picker and a master of the universe," he told the court. "Those things could not be further from the truth. I'm just an average person who's tried to work hard and to give back." In the end, U.S. District Judge Kimba Wood reduced his sentence from 24 months to just 8 months. (Reporters later overheard KBW attorney Mitch Kleinman in the courthouse saying, "She bought it hook, line and sinker.") Though an appeals court overturned McDermott's conviction in 2001, saying his mistress had been unfairly portrayed as a prostitute, McDermott decided against a new trial and instead pleaded guilty to one charge of insider trading. In the end, he lost $25,000 in fines and five months of freedom.

 

 

Sam Waksal

CEO: ImClone

Convicted: October 15, 2002 of securities fraud, bank fraud, obstruction of justice, and perjury

Known for his networking skills as much as for his scientific expertise, immunologist Sam Waksal founded ImClone in 1984. The New York-based biotech firm remained relatively unknown until 1999, when it announced the creation of Erbitux — a cancer-fighting drug so promising it convinced pharmaceutical giant Bristol-Myers to purchase $1 billion of ImClone stock in one of the largest biotechnology partnerships in U.S. history. But when the Food and Drug Administration rejected the drug, Waksal alerted several relatives and friends to dump their stock as soon as possible — before the FDA's decision had been made public. Waksal's father and daughter sold $9.2 million worth of ImClone, a move that caught the attention of the SEC and eventually led to his arrest.

Though Waksal pleaded guilty and publicly apologized to his family, his colleagues, and the millions of cancer patients who had held such high hopes for Erbitux, Judge William Pauley dismissed calls for leniency, noting that Waksal had contributed a mere one-half of 1 percent of his $133 million fortune to charity. In the end, the fallen entrepreneur paid $4.3 million in fines and tax restitution, and served 87 months in prison; he was released on Feb. 9, 2009. The scandal's most infamous casualty, however, turned out to be Waksal's pal, Martha Stewart, who had unloaded all 3,928 of her company shares just days before the FDA's decision had been announced to avoid losing an estimated $45,673; the domestic diva got five months in prison as a result.

 

 

Sam Israel

CEO: Bayou Group hedge fund

Convicted: Fraud in April 2008

Sam Israel III, 49, didn't hear any fat lady sing. After his conviction for defrauding investors of more than $450 million, the Connecticut-based executive decided 20 years in prison wasn't quite his style. Instead of reporting for jail in June 2008, he faked his own suicide — not very well, it must be said — by leaving his SUV on a bridge in upstate New York with the message "Suicide is Painless" (from the M.A.S.H. theme song) scrawled on the vehicle's dusty hood. Israel never really had authorities fooled. Video captured by a nearby security camera showed another car pulling up behind his GMC Envoy shortly before it was abandoned; police suspected it was a getaway car being driven by an accomplice. Days later, Israel's girlfriend Debra Ryan was arrested in connection with his disappearance. Finally, after about a month on the lam (and a place of honor on the U.S. Marshals' most wanted list), Israel rode a scooter to a Southwick, Mass. police station on July 2 and turned himself in at his mother's urging. She had been in touch with U.S. Marshals to let them know she had spoken to her son and coaxed him to do the right thing. For failing to report to prison, Israel faces an additional 10 years behind bars; he will be sentenced June 24.

 

 

Bernie Ebbers

CEO: WorldCom

Convicted: 03/15/2005 on nine counts of conspiracy, securities fraud and making false regulatory filings

Note to aspiring CEOs: If your company is staggering under massive debt, don't orchestrate an $11 billion accounting fraud to try to cover it up. It doesn't' work.

Bernie Ebbers turned WorldCom into the nation's second largest long distance telecommunications company through a series of rapid acquisitions that left it heavily in the red. In 2002, the Mississippi-based company admitted to improperly reporting $3.8 billion in expenses, prompting Justice Department to open a criminal investigation into its business practices. The Securities Exchange Commission, meanwhile, focused on $400 million that WorldCom personally loaned Ebbers.

WorldCom eventually filed for bankruptcy, and its stock price tumbled from $64 per share to a little over $1. Ebbers' "I had no idea what was going on" defense didn't work; he was convicted of securities fraud, conspiracy and seven counts of filing false reports with regulators. Ebbers is now serving a 25-year sentence in a minimum-security Louisiana prison.

Update: Gregory Reyes, former CEO of Brocade Communications Systems, has been removed from this list after his conviction on charges of backdating stock options was thrown out by a Federal appeals judge in August 2009.

 

Via:CnnMoney

Apple

Guests play with the iPad at the product’s official unveiling in San Francisco in January.

Top 50 rank: 1
Rank in Computers: 1
(Previous rank: 2)
Overall score: 7.95

Steve Jobs does it again: Apple is keeping its Most Admired crown for the third year in a row.

With 250 million iPods, 43 million iPhones, and 32 million iPod touches sold to date, plus the promise of a game-changing iPad, Apple won this year's vote by the highest margin ever for a No. 1. Two more years as champ and Apple will match GE for most appearances in the top spot.

What makes Apple so admired? Product, product, product. This is the company that changed the way we do everything from buy music to design products to engage with the world around us. Its track record for innovation and fierce consumer loyalty translates into tremendous respect across business' highest ranks.

As BMW CEO Norbert Reithofer puts it, "The whole world held its breath before the iPad was announced. That's brand management at its very best."

Google

HTC’s Google Nexus One smartphone runs on Google’s Android platform.

Top 50 rank: 2
Rank in Internet Services and Retailing: 1
(Previous rank: 1)
Overall score: 7.70

Google is increasingly squaring off against Apple, so it's fitting that the search engine giant climbs into the no. 2 slot this year, notably edging past Warren Buffett's Berkshire Hathaway.

The tech behemoth -- its revenues were $23.6 billion last year -- continues to dominate search on the web and attract the smartest designers and engineers. Meanwhile YouTube, long disparaged by critics as a money-loser, has started showing signs of major growth potential and analysts expect it will become profitable in the coming year.

But all eyes are on the Android OS for smartphones, to see how seriously it will challenge Apple's iPhone in the hotly competitive world of mobile devices. Watch this space next year.

CEO Warren Buffett says to earn customers' trust, "you do it one grain of sand at a time."

Top 50 rank: 3
Rank in Insurance: Property and Casualty: 1
(Previous rank: 1)
Overall score: 7.12

Warren Buffett's legendary investing genius and seemingly clairvoyant understanding of markets has kept his firm (which includes holdings in insurance, retail and energy, among others) a perennial favorite among executives.

Last year Buffett made news again when he announced Berkshire would make its biggest-ever acquisition, Burlington Northern Santa Fe for $26 billion. When the deal closed in February, Berkshire replaced the railroad on the S&P 500.

Berkshire's class A and B shares have been some of the best-performing stocks ever, last year increasing in book value by 19.8%. That's less than the 26% the S&P returned, but in his much-anticipated annual letter to shareholders last month, Buffett explained that while Berkshire has in some years lagged the index when the overall market gained, "We have consistently done better than the S&P in the eleven years during which it delivered negative results. In other words, our defense has been better than our offense, and that's likely to continue."

In fitting form, he closed with a quip after inviting shareholders to attend his annual meeting: "P.S." he wrote. "Come by rail."

Top 50 rank: 4
Rank in Pharmaceuticals: 2
(Previous rank: 1)
Overall score: 6.67

Survey respondents cheered J&J's banner year in 2008, which made it one of the most profitable companies in the Fortune 500 (earnings grew 22%, while the Fortune 500's profits dropped 85%). They also celebrated its stock performance the past few years, when the health-care giant consistently beat the S&P.

But the troubled economy brought sluggish sales last year, and J&J was forced to lay off 7,000 employees in November.

Even so, thanks to continued innovation and an overhaul of its pharmaceutical business, the company continued to win admiration. It also rewarded shareholders, increasing dividends as its stock climbed nearly 32% in the past 12 months.

Top 50 rank: 5
Rank in Internet Services and Retailing: 2
(Previous rank: 2)
Overall score: 7.39

What a show! The Internet retail giant makes a triumphant debut on the list this year at No. 5 as continued growth, strong sales in the recession, and the early success of the Kindle won Jeff Bezos the respect of our voters.

While Amazon doesn't publicly disclose product sales figures, the company claims millions of the electronic media readers have sold, and that it now sells six Kindle e-books for every 10 printed books.

That early success will soon be challenged by Apple's forthcoming iPad, of course, but Amazon's innovation and leadership in 2009 were more than enough to win Big Business's high esteem.

Top 50 rank: 7**
Rank in Motor vehicles: 3
(Previous rank: 2)
Overall score: 5.20

Surprised to find Toyota on our list? Not only did the troubled car maker make the top 50, but at No. 7 it's the highest-rated foreign company. What gives?

Our surveys were completed in the fall and winter -- most were received after Toyota's October recall of floor mats, but well before the gas-pedal crisis escalated to epic proportions in January. At the time of the polling, Toyota reaped the benefits of its legendary reputation for quality leadership and from its continued growth as U.S. car companies suffered; in 2008, the company surpassed General Motors as the world's largest automaker.

Even with that polling schedule, Toyota fell four spots from last year's list. The true test will be how it fares next year.

If history is any guide, it has a rough road ahead. When Merck recalled its arthritis drug Vioxx in 2004 after a clinical trial confirmed that it increased the risk of heart attacks, the pharmaceutical giant fell off our America's Most Admired Companies list the following year. It has yet to return.

Top 50 rank: 8
Rank in Megabanks: 1
(Previous rank: 1*)
Overall score: 7.66

The public at large may still see Goldman as the poster child for the greed that sparked the financial crisis, but its reputation in the business world is stronger than ever: The company shot up 7 places from No. 15 last year.

The strongest financial services firm to emerge from the recession, Goldman paid back its $10 billion TARP loan with a 23% return to taxpayers in July, and has watched its stock rise 85% in the past year, and is currently trading around to $158 a share.

Responding to criticism over extravagant executive pay, last month the bank announced that as a bonus, CEO Lloyd Blankfein would collect 58,381 shares of restricted stock -- valued at $9 million -- but no cash.

Top 50 rank: 9
Rank in General Merchandisers: 1
(Previous rank: 1)
Overall score: 7.14

With $405 billion in revenues, the world's largest retail chain has earned the respect of business by managing an elephantine network of discount stores that employ more than 2 million people in 15 countries -- stores that welcomed new customers seeking low prices in a troubled economy.

With more than 100 million shoppers per week, the company now accounts for 10% of retail sales in the U.S., and managed a 8.8% profit gain last year by cutting costs.

Not that it's immune to recessionary pressures: In January, the company announced it would lay off 11,000 workers in its Sam's Club stores.

Coca-Cola trucks decorated with holiday lights ride through Berlin.

Top 50 rank: 10
Rank in Beverages: 1
(Previous rank: 3)
Overall score: 6.98

While sales lagged in the U.S. last year, the food and beverage maker saw growth in emerging markets like China and India, as well as Europe, where favorable exchange rates have helped bring fizzier revenues.

Coke has been a leader when it comes to environmental issues: It is aiming to be water neutral -- meaning every drop of water used by the company will be replenished -- by 2020, and CEO Muhtar Kent participated in climate change talks in Copenhagen in December.

But Coke is perhaps most admired for one thing: the strength of its brand. As the company watched consumption patterns change in the U.S. -- where consumers are becoming more health- and cost-conscious -- it focused marketing on its take-home division.

Kent has strong opinions when it comes to what it takes to preserving a corporate reputation: "There are two things in this regard a CEO can never delegate," he told Fortune. "The first is communicating your organization's vision for the future, and the second is ensuring that you are developing the right leaders to execute that vision. Everything about a company's reputation emanates from those two sources of influence."

Attendees try an interactive display at the International Consumer Electronics Show in Las Vegas in January.

Top 50 rank: 11
Rank in Computer Software: 5
(Previous rank: 5)
Overall score: 6.54

The successful launch of Windows 7 and the debut of search engine Bing – a noble effort to win over Google detractors -- shows that Microsoft is still holding onto its title as king of the software business. In the works at the house that Gates built: software for a mobile smartphone and a new tablet OS to vie with Apple; a new version of the company's Office application suite; and a revamped xBox console to compete with Nintendo's Wii.

Top 50 rank: 12
Rank in Airlines: 4
(Previous rank: 3)
Overall score: 6.26

Despite facing the most difficult economy ever for the airline industry, the leading low-cost U.S. carrier gained market share and extended its flight map. Southwest added new routes, including gates at New York's LaGuardia, and made an unsuccessful bid in August to acquire bankrupt rival Frontier Airlines for $170 million. And while other cash-strapped carriers have started adding fees for checking a bag, Southwest will still carry two for free, earning from consumers and business the respect it touts with its stock ticker symbol: LUV.

Top 50 rank: 13
Rank in Delivery: 2
(Previous rank: 1)
Overall score: 7.26

Business looks to FedEx as a barometer for the economy, and as customers sent fewer packages during the recession, decreased revenues led to the company's first-ever layoffs last November. The delivery specialist dropped slightly in its favor with executives, falling six spots from No. 7 last year. But increased demand in its international business, particularly Asia and Latin America, as well as the company's ability to strictly manage costs without sacrificing service, has enhanced the company's reputation for reliable on-time deliveries.

Top 50 rank: 14
Rank in Food Services: 1
(Previous rank: 1)
Overall score: 8.08

The fast-food king saw sales dip last year as competitors offered heavy discounts and recession-crunched consumers cooked at home.

But Mickey D's fought back, beating the competition with its dollar menu and offering a variety of new products, including espresso drinks and wraps. As it catered to patrons with less to spend in the recession, McDonald's posted huge profits.

The restaurant giant's nimble reactions caught the attention of our respondents: It climbed two spots on our list this year from No. 16.

Top 50 rank: 15
Rank in Information Technology Services: 1
(Previous rank: 1)
Overall score: 7.60

Big Blue's decade-long transition away from hardware and into software and services continues apace: Its software business has nearly tripled in the past 10 years, and its services division continues stellar growth. In 2009, the company also bucked the recession and watched its stock climb 60%. Part of the reason: IBM is leading the Unix market in midrange servers -- beating Oracle and Intel -- and recently introduced the new Power7 chip, which runs four times faster than its predecessor. Who says big companies can't change -- or, for that matter, innovate?

Why is the adult film business in dire straits? Sasha Grey and other stars answered The Daily Beast’s question this weekend at the porn industry’s annual convention in Las Vegas.

Every January, the Adult Entertainment Expo in Las Vegas is the biggest annual gathering of the adult film industry. But the biggest is suddenly a lot smaller. The 2010 AEE convention, which ran Thursday through Sunday, had shrunk from packing two floors of the Venetian’s Sands Expo Center last year down to one floor (and that one with lots of empty space).

“The AEE show is an example of what the business faces. There are fewer fans, less foot traffic, and less companies exhibiting,” said Steve Javors, editor in chief of industry trade publication XBIZ. “During the 2000s, porn kept expanding outward. We thought there was an insatiable appetite for porn, and there would keep being more companies and more porn stars. Now, we are finding out that is not true.”

“People used to be ashamed to say their girlfriends did porn. That is gone. Anyone can afford a Web site now,” said Pete Housley, who aggregates porn on Twitter.

As for the concurrent, AVN Awards—AVN being another adult industry trade publication—which the porn world bills as their Oscars, it moved from the arena-size Mandalay Bay Events Center to the few-thousand-seats theater at The Palms. AVN head Paul Fishbein sounded like he was echoing the words of Spinal Tap’s manager when he described the venue switch as not so much to a smaller space, but one more “selective and intimate.”

• Douglas Rushkoff: The Internet Mob’s Porn Bomb So, what happened to the porn business, which had been magnificently profitable since the arrival of the VCR? The attendees at this year’s Adult Entertainment Expo gave a number of reasons for its problems.

Here are the Top 5 reasons why it is harder than ever before to make a living selling porn:

1. Piracy.

Lanie Crossman According to porn star Dana DeArmond: “If people don’t realize it is stealing and start paying for their porn then performers are going to stop performing.”

Among the acts DeArmond performs (solo or in group sex with men and/or women) are anal sex and double penetration. “I don’t think people are just going to do what porn stars do for free and put it on the Internet,” she said.

“It is stealing, and unfortunately it is hitting the adult industry hard right now,” said Sasha Grey, the current porn It Girl.

According to XBIZ’s Javors, thanks to illegal downloading and “Tube” sites like YouPorn, sales of porn’s most profitable product, DVDs, have taken a huge hit this past year. Javors said: “Piracy is the biggest single factor contributing to the economic malaise we are in. How can you compete with free?”

Dan O’Connell, president of Girlfriends Films, explained how his company has been among the few to claim an increase in DVD sales from 2009. “We’ve been able to grow our DVD sales, because we have been aggressive going after piracy. In the past eight months, we have taken down 17,000 pirated videos of ours by just sending out letters warning them that we will sue.”

But Girlfriends Films is just one company that averages about five movies a month. And even Grey does not see DVDs sticking around much longer. “I think DVDs are going to be a collectors’ medium like vinyl,” she said.

2. Video on Demand Meets the Masturbating Fan

Paying online hasn’t worked out so well for porn. Unlike conventional movies, the other Hollywood has a serious Achilles’ heel. “People look at VOD as the salvation that is going to be this huge revenue generator. But it is expensive to shoot a feature,” said Pete Housley of Candid Tweet. His company sits between fans and the industry by aggregating porn stars on Twitter. His perspective: “If you think about the costs of making a movie, and then selling it for 6 or 7 cents a minute, well, that is great for Hollywood. The problem for porn is that a guy watches 4 or 5 minutes, jerks off and is done. So, residual payouts are becoming less and less.”

AVN’s Fishbein said: “A lot of the studios that depended on DVDs are trying to make it up through video-on-demand. That is where you have people struggling, because they haven’t figured out how to fully monetize that content.”

John Stagliano, owner of Evil Angel, one of the largest DVD distribution companies in porn said: “We make money on VOD, just not nearly as much as comes from DVD sales. But we are making money on VOD. It isn’t the newspaper business yet.”

3. The Taboo Is Gone

“People used to be ashamed to say their girlfriends did porn. That is gone. Anyone can afford a Web site now,” said Housley.

Lanie Crossman So, Housley has developed criteria for his various feeds. For example, PornStarTweet requires that the performer has appeared in at least one DVD. Still, there are close to 500 qualified porn stars on this feed.

Mark Spiegler has been an adult talent agent for almost 20 years. His clients include some of the biggest names in the industry, like Dana DeArmond and Belladonna. But he no longer has to look for his talent: Aspiring porn stars email him in droves: “I send away at least two girls a week who think they can do porn,” he said.

Not everyone gets sent away. Spiegler likes to tell of the email he got in 2006 from the then recently turned 18 Sasha Grey. He immediately put Grey in her debut, a John Stagliano film.

Lanie Crossman Though Spiegler no longer reps her, he nostalgically keeps Grey’s first email on his phone. This weekend, reporters on the red carpet at AVN Awards asked to see this initial email. It appeared that it wasn’t the first time he had performed this ritual. He read the email aloud like a proud father, omitting only her real name, and ended by turning the phone around to display the long, long list of all the sex acts Grey was willing to perform on camera. The reporters turned totally silent as Spiegler scrolled down the list.

“Very few people are cut out for this business. Almost all of the girls who contact me, I send away. In my entire time doing this, there has only been one person who was perfect in every way for the porn business and that is Sasha Grey.”

At that point Grey, walking the carpet, came up behind Spiegler and the two warmly greeted each other.

4. Online Gaming

Lanie Crossman One of the strangest challenges porn faces is competition from online games like World of Warcraft, though the connection may at first seem random. “It is all entertainment that you are getting involved in the same way as porn is entertainment,” said Aiden. “I won’t say everyone, but a lot of people in the industry play videogames. The games are competition for porn. Fans jerk off to porn and are done, but you can keep playing a game.”

Aiden (no last name, this is porn!) should know, as he is also Webmaster for his wife Belladonna’s successful site EnterBelladonna.com. As for his online gaming, his wife wants him to cut back. “Yeah, my wife and I occasionally argue about the amount of time I spend playing.”

5. Porn Star Hookers

Why fight for the diminishing supply of work in the porn business, doing those double penetrations, when you have fans who will pay you more for basic missionary-style sex with them? It is a logic that is increasingly making sense to some porn stars as fans are able to connect ever more directly with them via Facebook and Twitter.

Few will talk about this, but one well-known veteran put it this way: “A lot of hookers make a few movies just so they can put ‘porn star’ on their escort Web site. That did not used to happen and still doesn't with the top girls. But a lot has changed in the past few years. It used to be girls in porn were unattainable fantasies. But they also used to be able to work five days a week if they wanted to. Now, very few of the younger girls can get that much work.”

Perhaps the clearest sign of this efficiency was the booth at AEE occupied by the legal brothel Mustang Ranch, located over 400 miles from Vegas. The brothel is starting a porn production company using their hookers as stars. They hope to have their first release, One Night at the Mustang Ranch, out by spring. But don’t look for it on DVD. It will be Internet only.

by Richard Abowitz

By Adam Lashinsky

Yet for all his hanging out with copywriters and industrial designers and musicians -- and despite his anticorporate attire -- make no mistake: Jobs is all about business. He may not pay attention to customer research, but he works slavishly to make products customers will buy.

He's a visionary, but he's grounded in reality too, closely monitoring Apple's various operational and market metrics. He isn't motivated by money, says friend Larry Ellison, CEO of Oracle. Rather, Jobs is understandably driven by a visceral ardor for Apple, his first love (to which he returned after being spurned -- proof that you can go home again) and the vehicle through which he can be both an arbiter of cool and a force for changing the world.

The financial results have been nothing short of astounding -- for Apple and for Jobs. The company was worth about $5 billion in 2000, just before Jobs unleashed Apple's groundbreaking "digital lifestyle" strategy, understood at the time by few critics. Today, at about $170 billion, Apple is slightly more valuable than Google.

Its market share in personal computers was plummeting back then, and the cash drain was so severe that bankruptcy was a possibility. Now Apple has $34 billion in cash and marketable securities, surpassing the total market cap of rival Dell. Macintoshes make up 9% of the PC market in the U.S. today, but that share is increasingly beside the point.

With 275 retail stores in nine countries, a 73% share of the U.S. MP3 player market, and the undisputed leadership position in innovation when it comes to mobile phones, Apple and its CEO are no one's idea of underdogs anymore.

In 2006 Disney paid $7.5 billion to acquire Pixar, the computer animation film studio Jobs had nurtured and controlled. Jobs, in turn, became a Disney director and the blue-chip company's largest shareholder. His net worth, solely based on his stakes in Apple and Disney, is about $5 billion. Other executives have had stellar decades but none can compare with Steve's.

With Jobs back at the helm of his company, plenty of challenges lie ahead. Will the Goliath role suit him nearly as well as playing David clearly has? How will he respond to the competition he has awakened, particularly in smartphones, even as the personal computer fades in relative importance? Has he fashioned an organization that can succeed him? Can he possibly be as dominant in the decade to come as the one that is ending?

The "decade" of Steve actually began in 1997, when he returned to Apple after having been ousted a dozen years earlier. That was a year of triage, of a humbling investment from Microsoft, of paring Apple's product line to a bare minimum of four computers.

How's this for a gripping corporate story line: Youthful founder gets booted from his company in the 1980s, returns in the 1990s, and in the following decade survives two brushes with death, one securities-law scandal, an also-ran product lineup, and his own often unpleasant demeanor to become the dominant personality in four distinct industries, a billionaire many times over, and CEO of the most valuable company in Silicon Valley.

Sound too far-fetched to be true? Perhaps. Yet it happens to be the real-life story of Steve Jobs and his outsize impact on everything he touches.

The past decade in business belongs to Jobs. What makes that simple statement even more remarkable is that barely a year ago it seemed likely that any review of his accomplishments would be valedictory. But by deeds and accounts, Jobs is back.

It's as if his signature "one more thing" line now applies to him as well. After a six-month leave of absence in the early part of this year, during which he received a liver transplant, he is once again commanding a 34,000-strong corporate army that is as powerful, awe-inspiring, creative, secretive, bullying, arrogant -- and yes, profitable -- as at any time since he and his chum Steve Wozniak founded Apple in 1976.

Superlatives have attached themselves to Jobs since he was a young man. Now that he's 54, merely listing his achievements is sufficient explanation of why he's Fortune's CEO of the Decade (though the superlatives continue). In the past 10 years alone he has radically and lucratively reordered three markets -- music, movies, and mobile telephones -- and his impact on his original industry, computing, has only grown.

Remaking any one business is a career-defining achievement; four is unheard-of. Think about that for a moment. Henry Ford altered the course of the nascent auto industry. PanAm's Juan Trippe invented the global airline. Conrad Hilton internationalized American hospitality.

In all instances, and many more like them, these entrepreneurs turned captains of industry defined a single market that had previously not been dominated by anyone. The industries that Jobs has turned topsy-turvy already existed when he focused on them.

He is the rare businessman with legitimate worldwide celebrity. (His quirks and predilections are such common knowledge that they were knowingly parodied on an episode of "The Simpsons.") He pals around with U2's Bono.

Consumers who have never picked up an annual report or even a business magazine gush about his design taste, his elegant retail stores, and his outside-the-box approach to advertising. ("Think different," indeed.)

It's often noted that he's a showman, a born salesman, a magician who creates a famed reality-distortion field, a tyrannical perfectionist. It's totally accurate, of course, and the descriptions contribute to his legend.

By the following year Steve's regime had kicked into gear. Jobs completed the hiring of a new management team, which included several executives from his previous company, Next. Those top players would form the nucleus of the Jobs brain trust for nearly 10 years.

Then came the first Macintosh after Jobs' return, the iMac, a breakthrough all-in-one computer and monitor that heralded Apple's return to health. The success of the pricey iMac, coupled with drastic cost cutting, allowed Jobs to build a cash cushion. By repairing Apple's balance sheet, he prepared the company for big investments to come, a shrewd business move if ever there was one.

Jobs laid the foundation for Apple's leap from stable to stratospheric when things looked darkest. In 2000, Apple missed its financial targets in a September earnings announcement, sending its stock price plummeting in subsequent months to the equivalent of $7 in today's prices. Yet Jobs by this time had set in motion the key elements of Apple's rejuvenation.

Over the course of 2001, as global markets fell and the world headed into recession, Apple launched the iTunes music software (in January), the Mac OS X operating system (March), the first Apple retail stores (May), and the first iPod (November), a 5GB model that Apple bragged would hold 1,000 songs.

The market didn't catch on quickly to the significance of those events. iTunes was just music-playing software embedded into Macs and lacked an online store that sold music. The new operating system, though impressive, powered a niche product. The iPod was a snazzy MP3 player in an established market.

As the company's stock languished, takeover rumors appeared from time to time. What was never reported was that Jobs seriously contemplated taking the company private with the help of newly formed buyout group Silver Lake Partners. An Apple buyout would have been the deal of the century, but according to people familiar with the talks, Jobs ultimately shut them down.

That was actually the second serious proposal to buy Apple. In 1997, Jobs' friend Ellison, later an Apple board member, lined up financing to take over the company on the assumption that Jobs would run it. In a recent interview Ellison said Jobs didn't like the idea of being "second-guessed" if it looked as if he'd returned simply to make money. "He explained to me that with the moral high ground, he thought he could make decisions more easily and more gracefully," says Ellison.

For those paying attention after Jobs' return, the CEO was telegraphing Apple's trajectory. "I would rather compete with Sony than compete in another product category with Microsoft," he told Time in early 2002. "We're the only company that owns the whole widget -- the hardware, the software, and the operating system. We can take full responsibility for the user experience. We can do things that the other guy can't do."

Jobs was convinced that the masses would turn to Apple, but only if he could speak directly to them -- and not just to faithful Macintosh users, a club that included mainly artists and students. The strategy of building company-owned retail stores, so integral to Apple today, was derided at the time as a risky cash drain.

"He did this with a nervous board," says Bill Campbell, a former Apple executive who went on to become chairman of Intuit and an Apple board member. "He knew that this is what customers wanted." What's striking looking back is how little there was to sell in the original Apple stores. Jobs knew how he'd fill them.

Jobs made it his business to know everything about Apple. "He's involved in details you wouldn't think a CEO would be involved in," says Ken Segall, a former Chiat/Day creative director who has worked with Apple on and off for years. Jobs commissioned the iconic "Think different" campaign, says Segall, well before any of Apple's new products were introduced -- or even described to the ad team. "He'd say, 'The third word in the fourth paragraph isn't right. You might want to think about that one.' "

The rare pairing of micromanagement with big-picture vision is a Jobs hallmark. Early in his return to Apple, he recognized that gorgeous design was a differentiator for Apple in a computer industry gripped by the successful blandness of Dell, Microsoft, and Intel.

"I cannot count the number of clients who have marched in and said, 'Give me the next iPod,' " writes Tim Brown, CEO of product-design consultant Ideo, in his new book "Change by Design." "But it's probably close to the number of designers I've heard respond -- under their breath -- 'Give me the next Steve Jobs.'"

Jobs also has a knack for pouncing at the right moment. The music industry had failed repeatedly to develop its own digital-music sales site before Apple came along with iTunes, which was by then prepared to become a store for buying music.

Jobs cleverly made his pact with the record labels when iTunes worked only on Macs, which in 2002 had a personal-computing market share in the low single digits. Apple's humble position -- before iTunes became compatible with Windows, expanding its potential market share to nearly all PCs -- was a virtue. This made iTunes an experiment rather than a destructive paradigm shift.

"I don't understand how Apple could ruin the record business in one year on Mac," said Doug Morris, the head of Universal Music, according to "Appetite for Self-Destruction," a new book about the record industry's ills by Rolling Stone writer Steve Knopper. "Why shouldn't we try this?" Writes Knopper: "By the time Steve Jobs came around, he was the last resort. He was merely smart enough to know it. He played tough, but not any tougher than any lawyer for a major label who had negotiated an artist contract in recent decades."

A key Jobs business tool is his mastery of the message. He rehearses over and over every line he and others utter in public about Apple, which authorizes only a small number of executives to speak publicly on a given topic.

Key to the Jobs approach is careful consideration of what he and Apple say -- and don't say. Harvard professor David Yoffie estimated that in the months between announcing and selling the first iPhone in 2007, Apple received $400 million in free advertising by not making any public statements, thereby whipping the media into a frenzy.

Jobs himself is careful to avoid overexposure, preferring to speak only when he has products to promote. He didn't disclose his 2004 cancer surgery until after it occurred, and then only in an employee e-mail that was strategically released to news outlets. Similarly, he told the world of his recent leave in another employee missive, with no additional comment from him or anyone else at Apple.

Nobody in Jobs' sphere speaks without the permission of the company's media relations team, which reports directly to Jobs. Apple declined to make Jobs available for an interview for this article. It did bless the participation of some people in Apple's orbit to speak about him, while nixing requests for others.

The secrecy has rankled corporate governance experts, who insist the health of such an indispensable CEO warrants greater disclosure.

Jobs was initially mum as well about a stock options backdating scandal that embroiled the company's former finance chief and general counsel. In an eventual SEC filing, Apple said Jobs was aware that the company had adjusted option grant dates so that the grants were more profitable for employees. Jobs apologized for the backdating, calling the episode "completely out of character for Apple."

Jobs manages the money, the message, the deals, the design, and more. Consider the case fairly made that the long-ago enfant terrible of the computer industry has built up impressive business chops and that his company is peerless. But if nothing else, his recent illness is a reminder that Steve Jobs is mortal. When he's gone, how long will his company thrive without him?

Apple's future.

This past September, when Steve Jobs made his triumphant return to the public eye, he thanked precisely one Apple executive by name: Tim Cook, Apple's chief operating officer.

At an event to introduce a new line of iPods, Jobs first informed a crowd of journalists, analysts, and Apple developers that he now possessed the liver of a "twentysomething liver donor who had died in a car crash." Then he thanked Cook and the rest of the management team for "ably" running Apple in his absence. Cook, in turn, led a standing ovation for Jobs, his arms raised over his head from the front row of a San Francisco auditorium.

With Jobs back at work, the conversation has been postponed as to whether Cook, or anyone else, is prepared to fill Jobs' shoes. "At Apple the hierarchy is determined by who Steve calls," says a former Apple executive. "There's a lot of value in 'Steve said.'"

Larry Ellison, a CEO known to dislike the topic of succession, says of his friend, "He's irreplaceable. He's built a fabulous brand. He's got a wealth of products. Whenever he leaves, I hope he retires in good health and he's sailing off in his yacht in the Mediterranean. But they're going to miss him terribly, because it's a consumer products company. The product cycle is so fast."

There are signs that Jobs has inculcated the troops enough to last awhile without him. "The organization has been thoroughly trained to think like Steve," says someone with contacts among the Apple executive team. "That's why the six months went so smoothly. People could envision, 'This is what Steve would do.'"

Jobs, in fact, inspires far beyond Apple. Larry Pag