Business - BusinessWeek Online

Lisa and Robert McIlwain are living a business owner's nightmare. It started when a tornado with 157 mph winds ripped through Fun Zone, their Montgomery (Ala.) skating rink and family entertainment center on Nov. 15, 2006. Although the 31 children and 11 staff members trapped inside the center survived, the 50-employee, $2.5 million business was wiped out. Fun Zone was the only source of income for the couple, who have six children. Their insurance payment went to pay off the mortgage on the damaged property.

Prices are going up all over, but it's common practice among economists to cite only the "core" inflation rate, which excludes food and energy costs.

Cass Business School in London was one of several dozen MBA programs tempted by a seemingly massive and untapped market for management education in China. It started a joint executive education program with the Shanghai University of Finance and Economics in 2004 and has had about 80 students graduate from its two-year program. But the British administrators Cass sent to China grew weary of the lengthy government approval process required for each new class of students. And they were frustrated by the effort it took to bring home the money they were making. ...

Last October, Kathleen Casey-Kirschling made headlines as the first of an estimated 78 million baby boomers to file for Social Security benefits. Born on New Year's Day, 1946, in Philadelphia, the retired teacher seemed to herald a gray tsunami of Americans born from 1946 through 1964 who would soon be exiting the workforce.

In 2000, a few members of the Lyman family moved out of its capacious ancestral home. Though the house, set on a sprawling farm in Middlefield, Conn., had been inhabited by Lymans since its construction in 1785, it was feeling too big for them. Two years later, the 180-member family decided to turn the homestead into an event space for weddings and other occasions. It was the latest in a series of business decisions that have kept the family business thriving for over 200 years.

Kathy Cloninger, chief executive officer of Girl Scouts of the USA since 2003, is in the process of transforming the venerable U.S. organization to ensure it remains as relevant to girls today as when it was founded in 1912. (I consider one of Kathy's predecessors as CEO, Frances Hesselbein, to be the greatest leader I have ever met.) The organization recently released a fascinating study on girls and their aspirations to leadership, so I invited Kathy to discuss what she sees for the next generation of women leaders. Edited excerpts of our conversation follow.

At around $125 a barrel, crude oil has more than doubled in price since the end of 2006. How is it possible that the vast majority of government forecasters, stock analysts, economists, traders, and journalists who follow the oil market failed to foresee this? Moreover, how can it be that even today, the bulls and bears on oil are extremely far apart, disagreeing not only on the oil outlook but even the present situation?

Pet owners, get ready for sticker shock. Retailers and manufacturers are hiking pet food prices, and the cost of kibble is expected to climb even higher in coming months. At PetSmart (NasdaqGS:PETM - News), the nation's largest pet-store chain, the cost of Hill's Science Diet dog chow is up about $2 a bag, to $36 this year, says Michael Sapp, vice-president of dog and cat consumables. Sapp notes that other top-selling brands such as Pedigree, manufactured by Mars, and Purina, made by Nestle, have been shrinking the size of their bags. ...

It didn't take long for Microsoft President Jeff Raikes to figure out his second career. Just four months after announcing plans to retire (BusinessWeek.com, 1/10/08) as president of Microsoft's business software operations, Raikes said on May 12 that he would become chief executive of the Bill & Melinda Gates Foundation, starting Sept. 2. "This is truly a dream job," Raikes says. When the Gateses dropped by his office in early May to offer him the post, "It took me a nanosecond to accept," he says.

Because of the credit crunch, conventional lenders are making it tough for any but the most creditworthy borrowers to qualify for private college loans. Now, a new breed of student lender is trying to get students to return the snub -- by writing off the Sallie Maes and Citibanks of the world in favor of relying on friends, family, and even perfect strangers to finance their college loans. "It's not a solution to the credit crisis in student loans by any means," says Mark Kantrowitz, publisher of financial aid Web site finaid.org. ...

Song Shi-nan, a blogger from the hipster Bullog blogging community, was blogging in Chengdu when an earthquake began swaying his apartment building and his computer screen on May 12. "I went to the balcony and saw all the buildings around were shaking I rushed downstairs and saw many people gathering there, mostly women, children and elderly. " A few hours after the quake struck, Song wrote, "there might be a blackout soon, and we must get out. So I took out the camping stuff and thought maybe I should just go camping with my wife tonight."

The oldest baby boomers start turning 65 in less than three years, but car-crazed American society isn't ready, and neither are the boomers themselves.

Richard Branson's parents told him to never criticize anyone. He still tries to apply that rule at Virgin Group. When Bobbi Brown was struggling to decide what to do with her life, her mother suggested a mental exercise that lead to the creation of her eponymous cosmetics business, Bobbi Brown Cosmetics. Napoleon Barragan, founder of 1-800-Mattress, remembers his mother washing his family's clothes by hand in the river, an image that inspired his drive to succeed.

Last month, a small Houston-based oil and gas company called Contango (AMEX:MCF - News) hired Merrill Lynch to explore the possibility of selling the company. Patrick Gundlach, portfolio manager of the Marshall Small-Cap Growth Fund (NASDAQ:MRSCX - News), which has a stake in Contango, wondered why, and asked the company's management. Was it the overwhelming interest in developing new sources for oil extraction? Was it the potential price that could be gotten in this market?

American International Group's financial results took a sharp turn for the worse in the first quarter and sent a shock wave through the equity markets, renewing concerns that there's likely to be more fallout from the credit crisis.

Over 5 million college students in the U.S. lack coverage under their parents' health insurance plans. Most colleges try to fill this gap by offering a school-sponsored health insurance plan. But a school's seal of approval does not mean the plan will be sufficient in a time of need. In fact, better options may be available elsewhere. Students and parents should thoroughly examine the plan before signing up. Here are a few things industry experts say you should consider when looking for a college health plan:

At the end of 2006 a new 4,000-square-foot home with a three-car garage in a small gated subdivision in Las Vegas sold for $1 million. On May 6 the bank that owns the now foreclosed property at 7604 Noche Oscura Circle agreed to sell it for $500,000 ($32,900 below the already discounted asking price).

European MBA programs may have traditionally lacked the brand recognition of their U.S. counterparts, but that's changing fast. The continent's increasingly dynamic business environment, improvements to curricula, and growing corporate demand for employees with international experience are attracting top-notch candidates from all over the world. In addition, most Europe management programs are cheaper, shorter, smaller, and more diverse than their U.S. rivals, which is drawing a growing number of American students to studies in the Old World.

I got a measly 3% raise at my recent performance review and I'm devastated. I was expecting at least 5%. My manager said I did a "good" job, and I'm not even sure what she meant by that. I'm sure the company is pinching pennies, but 3% won't even keep up with my rent increase. I don't want to look for another job, but I feel very insulted. Any tips for a bruised ego?

They eat from the same dishes and sleep in the same beds, but they seem to be operating in two different economies. From last November through this April, American women aged 20 and up gained nearly 300,000 jobs, according to the household survey of the Bureau of Labor Statistics (BLS). At the same time, American men lost nearly 700,000 jobs. You might even say American men are in recession, and American women are not.

Fannie Mae's worse-than-expected first-quarter loss, reported on May 6, shouldn't come as a surprise to anyone who has followed the news of continuing declines in home prices across the U.S.

With home prices continuing to drop and the pace of home sales slowing further, nobody has been looking for encouraging results from homebuilders.

Chris Lindgren needed money. His textbook price comparison site, Direct Textbook, depends mainly on the referral fees it gets when college kids buy books through it. But this past August, the four-year-old business had already used up most of its cash on online advertising, with weeks of the back-to-school rush season still ahead. Lindgren wanted to buy more ads, but revenue from previous sales wouldn't come in for months. His profitable three-employee company had tapped out two lines of credit worth $60,000 from banks in Salem, Ore. ...

Coupons are making a comeback. In the face of rising food prices and a slowing economy, consumers are clipping coupons once again. Only, they don't need scissors and a local newspaper so much as a computer, printer, and maybe a mobile phone.

Could Bank of America act like a troubled homeowner and hand the keys to Countrywide Financial back to the lender? That's the speculation on Wall Street as Countrywide shares fell 10.4%, to 5.36, on May 5. That's well below the $7-a-share price indicated when Bank of America agreed in January to buy the nation's largest mortgage company for $4.1 billion.

It's not always easy to get new employees to mix well with co-workers -- especially when they're scattered across the globe or speak different languages. Few companies know this as well as IBM , the computer services provider that last year alone added 20,000 new staff members, many from Brazil, China, India, and Russia.

Credit scoring giant Fair Isaac shocked Wall Street on Apr. 28 with weaker than expected quarterly results, and its stock sank 12% the next day on the news. But things could get even worse for the company, analysts warn. With banks pulling back on lending and consumers buying fewer cars and homes, demand for Fair Isaac's ubiquitous FICO score -- the three-digit number that signals a customer's credit worthiness -- is dropping.

The U.S. labor market continued its losing streak in April, but the amount of jobs lost during the month was far less than economists had feared.