Taking Stock: The Year in Business

Some business stalwarts took stumbles during 2004, a year that saw an iffy job market and yo-yoing oil prices threaten consumer spending and the transportation industry. From airline bankruptcies to Google billionaires and one domestic diva outfitting her prison cell with seasonal decorations, the business world was rife with news in 2004.

Google.com founders Sergey Brin and Larry Page were the big winners of 2004 as Wall Street went ga-ga over the market debut of their company. In a throwback to the late '90s dotcom boom, Google shares have jumped almost 80 percent since debuting on the NASDAQ in August. The newly minted billionaires gave the search engine a unique motto, "Don't Be Evil," and then followed that advice by letting the public get in on the action. The company insisted on forgoing the traditional practice of selling shares to giant investment banks for the initial offering, instead using an innovative auction where the general public could bid for shares online.

Real estate tycoon Donald Trump also made a big splash this year. Despite staring down bankruptcy in his casino business, Trump scored huge PR points, not to mention television ratings, by starring in his own popular reality show, "The Apprentice." The hit TV show and revamped public image assure he'll avoid the curse of his two favorite words: "You're Fired!"

But the return of "The Donald" and the Google guys' feel-good story were anomalies in a business year that saw more missteps and setbacks than victories. No, 2004 certainly wasn't all about winners.

Airlines, Wal-Mart Face Challenges

It was another turbulent year for the airline industry. Despite a return to pre-9/11 passenger levels, three of the country's seven-largest airlines faced financial troubles under pressure from high jet fuel costs and labor union disputes. Heavy competition from discount carriers also pressured the big airlines, leaving United Airlines and U.S. Airways both in bankruptcy while another major carrier, Delta Airlines, is teetering on the brink.

One of the most surprising business developments was that retail giant Wal-Mart took several hits during 2004. Voters in Inglewood, Calif., fearing a Wal-Mart would threaten local small businesses, rejected a ballot measure that would have permitted Wal-Mart to build a Supercenter without undergoing the usual environmental reviews. Wal-Mart poured millions into PR campaigns across the state to prevent similar votes.

The company also faced court cases accusing it of discriminating against female employees and employing illegal workers. And Wal-Mart holiday sales stalled early this season after a lack of good bargains led to a dismal turnout on Black Friday, the day after Thanksgiving.

Pharmaceutical Woes

The pharmaceutical industry battled a spate of bad news during fall and early winter. Merck's pain drug Vioxx was taken off the market in late September due to concerns about heart attack and stroke risks. The company has since seen $29 billion, or 30 percent, of its market cap disappear. Merck may have been just the first of the big pharmaceutical dominos to fall. The Pfizer drug Celebrex is now facing similar claims, and the company has said it will stop advertising the drug. Analysts say the controversy could lead to a major overhaul in the FDA's approval process and a round of consolidation in the drug industry.

And perhaps the most public corporate spectacle was the legal soap opera surrounding Martha Stewart. Stewart began the year at the helm of her self-built empire, Martha Stewart Living, and ended it behind the walls of a federal prison in West Virginia. A federal judge sentenced Stewart to five months in prison after a jury convicted her of lying to investigators about a fishy 2001 stock sale. But proving that it will take more than a prison jumpsuit to keep her down, the domestic diva closed the year with a bang by announcing that she'll star in a syndicated television program once her jail term is complete.

What to Expect in 2005

The 2005 business calendar will not be devoid of headline-grabbing corporate trials, as Enron officials Kenneth Lay and Jeff Skilling face the music in federal court next fall.

The American worker had an up-and-down year in which the economy added an average of 185,000 jobs a month, barely enough to keep up with population increases. The jobs issue played a central role in the presidential campaign, and many economists forecast a bleak future in coming years as increasing efficiency may allow companies to grow without adding to their payrolls.

Economists are on the lookout for the rise of China as a global economic competitor in 2005. In November, a Chinese company bought IBM's PC business, and most analysts believe more Chinese buyouts are on the way.

President Bush is expected to push hard for Social Security reform next year, and the entire world will be watching to see if the value of the U.S. dollar continues its 2004 slide.

Whatever the outcomes of these and other looming issues -- a tumble in the red-hot housing market, rising health care prices, a late-year stock market rally -- it is certain the business world will present a fresh batch of heroes and goats in 2005.