It would not matter who was running it-- the mkt will be floating downward on all these IPOs. Check the Street.com--- off about 40 already...
Timing;;;;;;;
By Dick Satran
SAN FRANCISCO, May 28 (Reuters) - For years now, IBM has
been telling its story for all who would listen: The one-time
mainframe computer giant is now the Internet-friendliest
company on the planet.
With an advertising budget worth hundreds of millions of
dollars a year, it was promising to put people in the
"e-business" driver's seat even before it was clear where the
Internet might take them.
Now, after mostly ignoring button-down Big Blue's
transformation into the "Web geek" of the high-tech industry,
some of IBM's fiercest competitors are deciding it's time to
get down with the Yahoos and the Excites of the wired world.
In just the past three months, Advertising Age estimates, some
$500 million in new high-tech ads have been planned.
Two of IBM's most direct competitors, Oracle Corp. and
Hewlett-Packard Co., have launched marketing initiatives this
month to boost the perception that they, too, are major
"e-business" players.
A recent boardroom coup at No. 1 PC maker Compaq Computer
Corp. was blamed largely on the "e-factor" as well. The company
cited the lack of a viable Internet strategy in the ouster of
chief executive Eckhard Pfeiffer.
More than just advertising, it's the entire strategic
direction of the high-tech industry that's shifted.
Microsoft and Intel, the long-time high-tech leaders, had
much-publicized Internet conversions in recent years, but
International Business Machines Corp. was sounding that alarm
long ago -- and now it's getting its payoff.
"IBM is setting the agenda in the computer business for the
first time in years -- taking back some of that role from
Microsoft and Intel," said David Card of Jupiter Communications
Corp. "They are creating the terminology of e-business and
becoming synonymous with all the things business can do
electronically."
That, in part, is linked to constant flow of advertising
sent out in recent years by IBM and its publicity-minded chief
executive, Louis Gerstner. One of the first things Gerstner did
after taking over a troubled IBM in 1993 was to come up with a
more focused advertising strategy. After once using dozens of
ad agencies, IBM consolidated its ad work with one agency, WPP
Group Plc <WPP.L>'s Ogilvy & Mather in 1995.
IBM focused the marketing message "so they had one agency
and one advertising theme across multiple media and products,"
said Jupiter's Card. They also innovated in the use of consumer
channels to reach business people.
"The e-business campaign from IBM has been terrific,"
concedes Oracle marketing vice president,Mark Jarvis. "They
have successfully created a category that the industry has been
able to deliver on."
Advertising alone doesn't make the technology business
stand up and take notice, said Regis McKenna, the famed Silicon
Valley strategist and public relations expert. "The high-tech
business likes winners -- and IBM is a winner," he said.
Because the industry moves so fast, it craves stability and
leadership, McKenna says, and a slip in profitability can
translate "directly to market share loss."
In practical terms, tech companies gravitate to winners
because they want products that connect to the most-used
operating systems. While they may not like the bigfoot roles
played by Microsoft and Intel, they need to follow the industry
standards set by the leaders.
IBM, increasingly, is playing that role in e-business.
While the "WinTel" desktop alliance is now two decades old,
the Internet is still in its infancy, and the scramble is still
on to capture attention in the growing business.
Rivals, however, say IBM's wins have been in the realm of
perception.
"IBM created a whole new category with the e-business
campaign," said Oracle's vice president for marketing, Mark
Jarvis. "But we've been the biggest winners -- we took the
revenues."
Oracle, which recently fired its ad agency and is shopping
for a new one, is preparing to launch a major public relations
initiative next week to tell how they already have become a
leader in e-business.
"We're preparing a fact-based campaign to show what we've
done," said Jarvis, adding that 90 percent of the top Web sites
and two-thirds of the Fortune 500 companies use Oracle systems
for e-commerce.
Bob Finocchio, chairman of database company Informix Corp
<IFMX.O>., said, "It's important to note that the number of ads
you run on television doesn't really say how big your business
is."
Both the database companies suggested that IBM has failed
to show significant gains in either Internet-related software
or hardware, but instead has won most of its $20 billion in
purported e-commerce sales from consulting services.
For its part, IBM isn't claiming total victory, and is
preparing for a new round of competition. In a recent note to
employees, Gerstner said, "Suddenly,that lonely ground we
staked out a few years ago is getting pretty crowded, as
competitors scramble to join the e-business revolution."
Citing IBM's "near-death experience" before its turnaround,
he said the company needs to stay ahead of competitors by
"taking our e-business strategy to the next level."
Erik Brynjolfsson, director of the E-Commerce and Marketing
Research Project at the Massachusetts Institute of Technology,
said IBM took bolder steps into e-commerce "because it was
staring into the abyss."
"A lot other companies are going to have to do the same
thing -- and it's not just going to be a matter of having an ad
campaign. It's a lot more fundamental. They have to find a
whole new way of doing business on the Web." |
