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CNN 10

CNN STUDENT NEWS For July 25, 2002

Aired July 25, 2002 - 04:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: You're watching CNN STUDENT NEWS seen in schools around the world because learning never stops and neither does the news.

MICHAEL MCMANUS, CO-HOST: We begin this Thursday with our eyes on Wall Street. Look for that in "Lead Story."

SHELLEY WALCOTT, CO-HOST: Keep your ears tuned to "Chronicle" to learn the finer points of debating.

MCMANUS: Later, African gorillas fight for survival.

WALCOTT: And we take a trip to somewhere in the world. Can you guess our destination?

MCMANUS: And welcome to Thursday's broadcast. I'm Michael McManus.

WALCOTT: And I'm Shelley Walcott. Thanks for looking in.

The Dow skyrockets, but market volatility remains.

MCMANUS: Investors hope it's a sign of better times to come. The industrial average surged nearly 500 points yesterday to post its second largest point gain ever. Still, investors are leery after reports of corporate financial abuses. The head of the Securities and Exchange Commission, Harvey Pitt, says he could do a better job policing companies if Congress would raise his agency to Cabinet level.

Now President Bush didn't address the Pitt issue but says the government is cracking down on corporate fraud. Members of the House and Senate today reached a deal on legislation to fight corruption.

Now many companies and industries have hit hard times, the dot- com world being a prime example.

CNN's Jim Boulden now on one executive who survived the dot-com bubble and the dot-com burst.

(BEGIN VIDEOTAPE)

JIM BOULDEN, CNN CORRESPONDENT (voice-over): She's young, bright, rich, and for a while Martha Lane Fox and her partner, Brent Hoberman, were the poster children for dot-com mania and then dot-com arrogance.

Their London-based travel Web site, Lastminute.com, went public in March of 2000, making them dot-com multi-millionaires, the very week that technology shares hit their peak. Lastminute's stock price then plummeted with everyone else's, despite the co-founders insisting their tiny e-commerce empire was thriving.

MARTHA LANE FOX, CO-FOUNDER, LASTMINUTE.COM: Reading the press at the time, you would have thought we were greedy, we were misleading the public, that we'd somehow said we were a billion dollar company when actually we were much, much smaller than that.

BOULDEN: Martha Lane Fox makes no apologies for ramping up the offer price just days before the flotation. It enabled Lastminute to get much needed cash to really take off.

FOX: Fundamentally we hopefully were completely consistent in the message we were giving out in highlighting the risks but also highlighting the potential of the company and doing what we had to do, which was put it in the strongest position for survival now and in the future, not just in the very short term.

BOULDEN (on camera): Speaking of survival, how did you survive it all?

FOX: Oh I think, and I can say this because you know it wasn't just my idea, it was Brent's idea too, that it's just a very good customer proposition. And it's one that got stronger and stronger and stronger. You know the idea was hairy for lots of reasons, but much more hairy at that point was the fact that we were growing a business at 300, 400 percent of year -- a year on a technology that was being held together with cello tape (ph).

BOULDEN (voice-over): To replace that technology, Lastminute had to quickly rollout a more robust Web site. It didn't go well.

FOX: We completely relaunched our technology in September 2000...

BOULDEN (on camera): Yes.

FOX: ... post-IPO, we're doing a big acquisition, all of these things were colliding together at the same time. And I don't think it's a secret that it was heavily delayed and took us a lot longer and it was a lot more difficult than we anticipated.

BOULDEN (voice-over): Sitting in her unassuming offices near Buckingham Palace, Martha Lane Fox has no awards on her desk, no mementos chronicling her part in the dot-com story. She's just glad the spotlight is now off of her and more on the fact that the share price is on the way up and that Lastminute.com is using that currency to buy up competitors while others are retrenching.

FOX: Opportunities that it's given us, the ability to move quickly, think strategically, to really live and breathe the business and all bits of it is something that I don't think I could imagine not having now. So we love it. And despite having seen in a paper that being a CEO is more loathed than I think something quite extraordinary like a traffic warden, I don't want to give up my job.

BOULDEN: And with Lastminute.com now Europe's top travel Web site, Martha Lane Fox is not likely to become the latest casualty in the top tier shakeout.

Jim Boulden, CNN, London.

(END VIDEOTAPE)