Disney chairman Michael Eisner has finally given shareholders what they’ve been clamoring for: a second in command. As president and COO of Walt Disney , Robert Iger will not only be Eisner’s No. 2 man, he will run much of the day-to-day operations.
    Wall Street, distressed by lethargic stock prices and slumping earnings over the last couple years, has been leaning hard on Eisner to pick a lieutenant and successor who could help straighten things out. Notably off have been licensing and merchandising profits.
    Disney’s internet venture, Go.com, has also been a river of red ink, and is expected to announce substantial losses in the first quarter, owing in part to its pricey acquisition of Infoseek. 
    In an attempt to minimize the damage, Disney announced in November it would separate Go.com’s stock from its own, but Disney’s internet ills raise questions about the company’s ability to compete in a 21^st century environment.
    Iger is credited with solving another of Disney’s thorny problems: the issue of how to integrate the ABC television network into its empire. Not that the process has been smooth; there was plenty of upheaval last summer with the consolidation of its studio into the network, drawing criticism from the press and prompting upper-level resignations.
     The outstanding performance of ABC’s "Who Wants to Be a Millionaire?" has also contributed to Iger’s reputation.
   By all accounts, Iger, who was the chief of broadcasting operations as well as president of Disney International, is well-spoken and likeable. 
    Affability is a crucial quality for a Disney right-hand man; Eisner clashed violently with his last No. 2, Michael Ovitz, and finally sent him packing in 1996, only 14 months into his tenure. Ovitz managed to snag an exit package worth $100 million, though, further galling his former boss.
    Since that time, top executives have been in shorter and shorter supply at Disney. Studio chief Joe Roth recently resigned, and other walkouts include Stephen Bollenboch, Richard Nanula and Oxygen founder Geraldine Laybourne.
    But the dark days may be nearing an end. The coffers of the Magic Kingdom are once again swelling, with a 9 percent increase in first-quarter profits and a slight uptick in stock price fueled by confidence among investors and analysts.
       Eisner is showing signs of relaxing his death grip on power at Disney: along with Iger’s promotion, he announced the creation of a new executive committee including vice chairman Sanford M. Litvack, CFO Thomas Staggs, chief strategic officer Peter Murphy and the heads of the various business units. Staggs and Murphy have been promoted to senior vice presidents.
    After his promotion, Iger will doubtless be regarded as Eisner’s inevitable successor, but that’s not necessarily the case, caution insiders. Eisner’s not due to retire until 2006, and a lot can happen between now and then in the wonderful, volatile world of Disney.