Profiting on Enron

Journal Record, The (Oklahoma City), Feb 27, 2002

ATLANTA (Cox) -- Fame, if not fortune, has blown into town for two Georgia Tech accounting professors. Their book on how to spot funny business in financial statements was published Jan. 18, just in time to benefit from the uproar over Enron. Co-author Charles Mulford has taken calls from, among others, The Financial Times, The Wall Street Journal and Investor's Business Daily. He's also appeared on Bloomberg TV.

Mulford has been the front man for the two, since colleague Eugene Comiskey has been tied up with classes this semester. "Like Chuck says, he's been sucked up into a tornado," said Comiskey.

Their book, The Financial Numbers Game: Detecting Creative Accounting Practices, is not about Enron. The only reference to the company is in a preface Mulford squeezed in at the last moment. "I was afraid the book would get dinged because it's not the Enron book," Mulford said. "The story is much more than just Enron." But the timing could not have been better for the pair's third book. "Suddenly there is this incredible interest," said Comiskey.

It wasn't like this six years ago, when the two published their first book, Financial Warnings. That one was about what to look for that would signal future earnings problems. "People didn't want to hear about it in 1996," recalled Comiskey. "Things were just too good."

Things are pretty good now, at least for the authors. The book was among the top 25 on Amazon.com's best sellers list last week, and through Feb. 15 Wiley, the publisher, had sold 938 copies. But Mulford doesn't expect to get rich. "If I wrote books like this for a living," he said, "we'd be living in a tent."

Advances in e-piracy

NEW YORK (NYT) -- There are few issues that enrage record labels and performers more than the downloading of songs off the Internet without permission or payment. Their problem may be getting a lot worse. A visit to a Web site with a fiercely loyal following indicates that a growing number of people are downloading not just individual songs but entire albums, cover artwork and liner notes included, in less time and with less hassle than it would take to download the songs individually.

The fans are relying not on a new technology but on one that existed before the advent of MP3s, the format that allows music to be compressed into smaller files. They are using zip files, which compress one or more files into a single, easier-to-manage one. Thus 13 songs and the images of a CD cover and booklet can be saved as one file that can be easily downloaded. Fans are loading these zip files on regular music-exchanging services but disguising them as ordinary MP3 audio files. On Audiogalaxy, a free music-sharing software and Internet site that has become the center of zip file trading, there are not just single albums by acts like Pink Floyd, Britney Spears and Creed, but entire boxed sets, like a three-CD collection of Stevie Ray Vaughan's music.

"I don't even bother looking for songs anymore, because all you have to do is type in `zip' and there are like 2,000 matches," said a sophomore at the College of Charleston in South Carolina, who spoke on condition of anonymity. "All you do is open WinZip, and you have the whole CD. It's a joke."

Most music executives remain unaware of this new wrinkle in downloading. Fred Croshal, the general manager of Maverick Records, said he had never heard of fans exchanging albums as zip files. "The tech kids are moving much faster than we are," he said. "By the time we agree on anything, it's already seven years old." Even officials at the Recording Industry Association of America, which led the music industry offensive against Napster, said the practice was new to them. Amy Weiss, the group's spokeswoman, said, however, that the organization was not surprised.

Few Internet users trade albums as zip files, but the practice appears to be growing quickly. Searches two weeks ago on the Audiogalaxy site, audiogalaxy.com, turned up 2,000 zip files; this week there are more than 3,000. These numbers, though, are minuscule compared with the hundreds of thousands of MP3 song files on Audiogalaxy. (The recording industry association has already threatened legal action against Audiogalaxy for allowing the transfer of standard MP3 files of copyrighted music.)

The snowmobile drive-thru

STOCKHOLM, Sweden (AP) - McDonald's has opened its first drive- thru restaurant for snowmobilers -- on the outskirts of Piteaa, a small city of nearly 42,000 residents about 430 miles (700 kilometers) north of Stockholm, Sweden's capital. Eva Olsson, a marketing manager with McDonald's, said she got the idea after learning that nearly 6,000 snowmobiles were registered in Piteaa. "Besides, there is a snowmobile track near the restaurant. I contacted the Piteaa Snowmobile Club and asked them if they couldn't draw the track via our so called drive-thru loop," she said. The club helped get the necessary permit and laid out a new track that includes the restaurant.

Only 300 shopping days left!

NEW YORK (AP) -- Today is the 58th day of 2002. There are 307 days left in the year. Here are some business and legal highlights from this date in history: