by Patricia Sellers

Ted Dimon Sr. started a new job yesterday.

Not just any job. Formerly a broker at Merrill Lynch, Dimon joined the brokerage unit of JPMorgan Chase (JPM). His son happens to be CEO of the parent company.

Word is, Jamie Dimon steered clear of the deal to hire his 78-year-old dad, who arrived with five other Merrill brokers in tow. According to people close to father and son, Ted Dimon Sr. initially reached out to Barry Sommers, the CEO of Bear Stearns Private Client Services, in the spring of last year, after JPMorgan Chase bought Bear on the cheap as the Wall Street firm was collapsing. Talks revved up in the past four months, as Merrill has been adjusting to its own integration into Bank of America (BAC) and new leadership under former Citigroup (C) exec Sallie Krawcheck.

It’s been musical chairs across the industry lately. (The Wall Street Journal reported yesterday that UBS’ (UBS) new wealth management boss, Bob McCann, who hails from Merrill, is hiring a team of top guns from his old firm.) For the elder Dimon, the rhythm could not be more different at 277 Park Avenue, where his office is directly across the street from his son’s. (“As I look from the third floor over Park Avenue, I have a bird’s-eye view of when Jamie gets in the morning,” Dimon Sr. said through a JPMorgan spokesman this morning.) Whereas BofA Merrill Lynch employs 14,979 financial advisors (as brokers like to be called), JPMorgan’s Bear operation is a boutique with just 380 such salespeople. Jamie Dimon, who is 53, wants to expand the business, though. He’s talked about upping the number to 1,000.

We hoped to chat with Ted Sr., but he’s apparently too busy building client assets. (He started his new job on the day the Dow hit a 13-month high.) We do have a sense of how the father-son dynamic will work at JPMorgan Chase. In Last Man Standing, the recently released biography of Jamie Dimon, author Duff McDonald says that when Ted Sr., the son of Greek immigrants who became a stockbroker 50 years ago, was working for Salomon Smith Barney under Jamie and Sandy Weill, “there might be a company name on his business card, but Ted Dimon Sr. reported to no one.” He was a “free agent,” and Jamie confirmed that “he would never say I was his boss.”

It was Ted Sr. who introduced Jamie and Sandy Weill decades ago when Jamie was a teenager and the families socialized together. If you’re familiar with the Shakespearean saga that followed, you probably know that Jamie wrote an economics paper at Tufts University, where he went to college,  about the 1974 merger of Hayden Stone (Weill’s company) and Shearson, Hammill (where Ted Sr. worked). Impressed with Jamie’s analysis, Weill hired the brash whiz kid to work for him.

And they went on to assemble the financial-services empire that became Citigroup. Their relationship unraveled over personal rivalries and jealousies. Weill fired Dimon. And Dimon went on to be CEO of Bank One and then, in 2005, JPMorgan Chase.

Now Ted Dimon is staking his future at JPMorgan, which outranks Citigroup, BofA, and even Goldman Sachs (GS) in stock-market capitalization. No dummy, that Dimon.

Gilt Groupe CEO Susan Lyne has joined the board of AOL–soon to be spun off from Time Warner (TWX).

Does Lyne love trouble, or what? Five years ago, after Martha Stewart began her five-month prison stint in West Virginia, Lyne stepped up from the Martha Stewart Living Omnimedia (MSO) board to be CEO of the company–and worked, eventually hand in hand with Martha, to rebuild the crippled company.

That was a slog (Lyne left last year), and so was her three-year stint on the board of CIT (CITGQ)–which she began in 2006 when it didn’t seem to be a terribly risky move. But it turned out to be. For the past few months, Lyne has had a seat at the table as CIT’s board and CEO Jeff Peek vied to save the company from bankruptcy. Peek failed. Lyne left the CIT board last week–one day before CIT filed Chapter 11.

So now Lyne is turning her attention to another once-mighty company that lost its way. AOL’s new CEO, Tim Armstrong, who joined from Google (GOOG) last March, is preparing for the spinoff from Time Warner by assembling a board that includes Procter & Gamble (PG) ex-global marketing chief Jim Stengel, former FCC chairman Michael Powell, tech investment banker Bill Hambrecht, and Jim Wiatt, who headed William Morris until he got squeezed out in a messy merger with talent agency Endeavor this year.

These people know pressure–and have their work cut out for them at the flagging web pioneer. Time Warner’s earnings report on Wednesday included news that AOL’s sales dropped 23% last quarter, while profits fell by half.

The good news for Lyne is that she has a positive story where, for her at least, it really counts: at Gilt Groupe. She joined the tiny purveyor of luxury goods last year, and it has become one of the fastest-growing companies in the Internet space.

by Patricia Sellers

Photo courtesy of Avon

Liz Smith, who was on track to succeed Andrea Jung as CEO of Avon Products (AVP), is moving to a new company and a new industry. Again.

The onetime star exec at Kraft (KFT), who made an unlikely leap from food to cosmetics in 2004, is the newly named chief executive of OSI, a chain of casual-dining eateries.

“What?!!” is a question that Smith admits she’s been asked often throughout her career. She says she follows her own guideline: “Be open to opportunity.”

There’s plenty of opportunity–and risk–at OSI, which you may not have heard of but is a giant in the casual-dining category. With 2008 revenues of $4 billion, OSI operates chains such as Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill, Roy’s, and Fleming’s Prime Steakhouse and Wine Bar. Good brands, as restaurant brands go–and as Bain Capital and Catterton Partners thought when they acquired the company for $3.2 billion in 2007. But the global recession brutalized the business, which operates across the U.S. and in 20 other countries. OSI lost $739.4 million last year, and it’s been suffering serious declines in same-store sales.

Which may be ideal for Smith, since she adores companies that are ripe for overhaul. “It’s really always been in my DNA,” she told my colleague Jessica Shambora in September, on the day she announced her departure from Avon.

Smith’s exit from Avon shocked many people, since she was crucial to the cosmetic giant’s turnaround, well-liked across the company, and widely viewed as Jung’s eventual successor. But “eventual” was looking to be too long from now. While Smith, who is No. 29 on Fortune’s Most Powerful Women in Business list, is just 46 years old and has plenty of runway ahead, she lost patience. That’s understandable since Jung, who was named Avon’s CEO at age 41 a decade ago, has no plans to retire.

So now, Smith–who began her career at Morgan Stanley (MS) and then, as a Stanford MBA student, “wanted to start the next Microsoft or H-P”–is off in yet another new direction. Geographically, this time it is Manhattan to Tampa, Florida, where OSI is based. Smith plans to commute initially and then relocate with her husband and two young sons.

And though retail isn’t entirely new to Smith–she’s on the board of Staples (SPLS)–she’ll be testing herself against her own measure of leadership. “Nothing is more important than a nimble, agile leader who is comfortable with ambiguity,” she told me a few months ago.

“We have to be comfortable figuring it out as we go along,” Smith added. Definitely, she’s living her philosophy.

by Patricia Sellers

Sallie Krawcheck

A hot job offer dangles before you. How do you know if it’s right? Sometimes you feel it in your gut. And sometimes you get a big, bloody warning sign. Like Sallie Krawcheck did before she opted to join Bank of America (BAC).

Krawcheck, the former Citigroup (C) star who joined BofA in August to head its Global Wealth and Investment Management unit, told a story last evening in an on-stage conversation with my Fortune colleague Carol Loomis at Manhattan’s Museum of American Finance. While she ducked all questions about who might replace departing BofA CEO Ken Lewis (she’s rumored to be in the running, but she’s a longshot), Krawcheck had the audience rolling as she talked about another job that she almost took–until things went awry.

This other job, explained Krawcheck, 44, was “a leadership opportunity at a troubled financial-services company.” The initial meeting with the prospective employer required a flight out of New York. “For the first time in my life, I overslept and almost missed the plane.” No time for a shower, she threw on her clothes. “I think my pajamas were on underneath,” she said.

She thought to herself: “This doesn’t feel very good.”

Krawcheck made it to the meeting, however, and it went well. The second meeting took place, conveniently, in Manhattan. This was a beautiful spring day. Wearing a new suit and new shoes, she recalled, “I couldn’t have been feeling more pleased with myself.”

That is, until Krawcheck, while walking down Madison Avenue to her meeting, caught the heel of her new shoe in a crack in the sidewalk.

“I went flying down onto a grate,” she said. “I stood up, spit out a tooth. Blood was everywhere.”

Still, she was determined: “I can make the meeting. I can make the meeting!”

“I did not make the meeting. Nor did I eat solid food for the next six weeks.”

“I ended up with six stitches, one broken tooth, a hairline jaw fracture, a dislocated jaw and whiplash.”

Yes, the meeting happened, eventually. In fact, the fit between Krawcheck and this financial-services company seemed ideal. She accepted the job offer.

And then, when she went to sign the employment agreement, “I promptly threw up. And I thought, I don’t think this is right for me.”

And that’s how Sallie Krawcheck, No. 30 on Fortune’s Most Powerful Women in Business list, passed up one big opportunity before accepting another at BofA.

Addendum: The Starbucks Via Taste Challenge kicks off Friday and runs through Monday in Starbucks stores across the U.S. and Canada. But I got a head start Tuesday morning, as I noted in the post below: I disagree with CEO Howard Schultz’s “guarantee” that you won’t be able to tell the difference between Starbucks’ drip and its new instant (or “ready brew,” as he calls it). Starbucks Bold drip handily beat Bold Via in my taste test–for what it’s worth. This morning (Wednesday) at my local Starbucks, I tried the lower-test brews: Pike Place drip vs. Columbia Mild Via, side by side. Verdict: Via wins. Then again, what true coffee lover loves Pike Place?

“We’ve literally cracked the code on being able to replicate a cup of Starbucks coffee that I can guarantee you would not be able to tell the difference.”

- Starbucks (SBUX) CEO Howard Schultz on his entry today into the $20-plus billion instant coffee market. I tried Via, Starbucks’ new product, this morning: The barista served me a cup of the new instant bold brew and a cup my usual bold drip coffee, and I drank them side by side.

Howard, I have to tell you, they do taste different. Your new Via lacks the burnt taste that causes some people to call Starbucks “Charbucks.” I actually prefer the burnt taste of your bold drip. Via seems to me to be short on flavor. Though the barista insisted that the regular Via is better than Pike Place drip.

It’s interesting that Starbucks is introducing its value brand, Via (“less than a dollar a cup,” notes Schultz in the video below), the same week that the guy who tried to balance value and quality and got the boot, Jim Donald, landed a new CEO job elsewhere. Former Starbucks chief executive Donald, whom Schultz replaced with himself in January 2008, has been under the radar for almost two years (roaming, rowing, speaking, teaching, and serving on boards), but he just accepted a job as CEO of Haggen, a food and drugstore chain based in Washington state. (Haggen’s website claims that it was the first grocer to have an in-store Starbucks Coffee shop, in 1989.) Donald’s earlier career was in grocery–senior posts at Safeway (SWY), Wal-Mart (WMT), and Pathmark–so he’s going back to his roots.–Patricia Sellers

I co-hosted CNBC’s Squawk Box Thursday morning, when we unveiled Fortune’s 2009 Most Powerful Women in Business list–topped by PepsicCo (PEP) CEO Indra Nooyi for the fourth year in a row.

With us on the show: bank-industry analyst Meredith Whitney, No. 39 in Fortune’s rankings. She stayed after co-hosting Squawk Box the hour before–and made news, by the way, predicting that home prices will continue to fall and unemployment will go higher. Here’s video of me revealing the 2009 MPWomen rankings and Whitney talking about the list and the Fortune Most Powerful Women Summit, which convenes next week in California.

http://www.cnbc.com/id/15840232?video=1248624903&play=1

We also talked with Xerox (XRX) chairman Anne Mulcahy, who recently ceded the CEO reins to Ursula Burns, who moved up to No. 9 on the annual MPWomen list.

http://www.cnbc.com/id/15840232?video=1248623553&play=1

Our third guest was Yahoo (YHOO) CEO Carol Bartz, No. 8 in the MPWomen rankings, who is as candid as CEOs come. Check out this lively–or maybe I should say rowdy–discussion about Yahoo’s search deal with Microsoft (MSFT) and Yahoo’s new direction:

http://www.cnbc.com/id/15840232?video=1248642312&play=1

For video of PepsiCo (PEP) CEO Indra Nooyi talking about managing in “the age of thrift,” click here.

Who’s more powerful–Oprah Winfrey or Yahoo (YHOO) CEO Carol Bartz? Disney (DIS) media boss Anne Sweeney or MTV Networks chief (VIAB) Judy McGrath? Who from Google (GOOG) made the 2009 Fortune Most Powerful Women list?

The new rankings are out. PepsiCo (PEP) CEO Indra Nooyi is No. 1 for the fourth year in a row.

And yes, there is a science to deciding these rankings. Here I talk with CNNMoney anchor Poppy Harlow about how we do it:

“You can run, but you can’t hide.”

- Media Link President Wenda Millard, calling this afternoon from the Gulf of Trieste on the Adriatic Sea, to share a few thoughts about her new gig revamping sales and marketing at MySpace.

While News Corp. (NWSA), MySpace’s owner, and strategy firm Media Link, had been discussing some sort of partnership since the start of the year, Millard tells me that her new assignment came unexpectedly during her 10-day vacation. “We want to call you in right now,” MySpace CEO Owen Van Natta told her when he reached her on her cell on Tuesday afternoon, as Millard was eating air-dried proscuitto and drinking local wine on an organic farm in Croatia.

Prompting the MySpace boss’s urgent call to Millard–who was once Yahoo’s (YHOO) ad chief and later co-CEO of Martha Stewart Living Omnimedia (MSO)–was the exit of MySpace sales and marketing boss Jeff Berman. Van Natta, a former Facebook COO who joined MySpace this past spring, is expected by his News Corp. bosses to do whatever it takes to improve the flagging social network’s relationships with the ad community.

This new set-up with Media Link is unusual–a one-year deal that will have Millard staying at Media Link and working on Los Angeles-based MySpace from her own space in New York. (Media Link CEO Michael Kassan, who recruited Millard to Media Link in April, is based in LA.) Millard says she’ll likely assemble a team of six Media Link execs to work on MySpace. On Monday, she’ll hit the ground running, she says, but right now, one more stop on her trip—Venice.

“If you spend your whole life focused on getting from here to there, then you won’t enjoy the trip.”

- Sallie Krawcheck, suggesting that her move to Bank of America (BAC), announced today, isn’t about chasing the golden rung–the CEO job there–but rather about fulfilling a desire “to get back in the fray.”  I’ve known Krawcheck, who had an unpleasant parting with Citigroup (C) last fall, for many years. And though I don’t doubt her ambition to rise to the top level, I think she’s more motivated to be a role model for her industry–in her case, managing investors’ wealth–than to be a big-bank boss, which isn’t very fun these days anyway. Who would want to be BofA CEO Ken Lewis, after all? The candidates are nevertheless lining up. For more on who they are and on Krawcheck’s reemergence, read “Behind Sallie Krawcheck’s move to BofA.”

“I don’t think you’re going to have those anymore. Bigness isn’t that great an asset anymore.”

– Tom Freston, former Viacom (VIAB) CEO, in a Reuters story about the waning influence of media moguls. These titans are being upstaged by the darlings of digital, like Facebook’s Marc Zuckerberg and Twitter’s Evan Williams. Old and new media alike are gathered this week at the Allen & Co. media summit in Sun Valley, Idaho.

Freston’s opinion comes from experience. After being fired in 2006 by one major media tycoon — Viacom chairman Sumner Redstone — he has gone on to help Oprah build her OWN cable network (which is likely to have a strong digital play) and to join U2 frontman Bono on his mission to reduce global poverty and AIDS. Read more about Freston in Pattie’s profile of “The Most Wanted Man on the Planet.” –Jessica Shambora