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When the Los Angeles Lakers hit the hoops again in the fall, there will be a new face in the lineup: Jeeves, the cartoon-butler mascot of Internet search engine Ask Jeeves.com. This month, the elegantly dressed servant got a gig answering sports-trivia questions on the Jumbotron at Lakers' games.
In what has become a new growth area for Hollywood, wheeler-dealer Michael Ovitz brokered the deal through Lynx Technology Group, his technology-investment firm, and Artists Management Group, his management company. In the same month, Lynx also signed National Basketball Assn. star Jason Kidd and tennis champ Pete Sampras as Jeeves pitchmen.
Jeeves may have to set more places at the table. In recent months, new-media companies increasingly have turned to talent agents and managers for help brokering deals. As the scramble to survive accelerates, they're hoping celebs and other bigwigs will help create brand recognition and drive much-needed revenues and profits.
"They come to us because they need to form a range of relationships and a depth of understanding of the entertainment industry," says Dan Adler, head of Creative Artists Agency's new-media department, which has quadrupled in size over the past year. "They might be able to do that on their own over some course of time, but because of our contacts, we can get them there much quicker."
WRONG STRATEGY? Is this savvy marketing on the part of the Web companies? Or yet another example of cash-strapped sites throwing money out the window? That's a reasonable question, especially for askJeeves.com. While the site's revenues increased twelvefold, to $12.6 million, in the quarter ended Mar. 31 compared with the same period last year, net losses skyrocketed from $6.1 million to $47.7 million. In May, with Jeeves stock near an all-time low of about $22, President Ted Briscoe resigned. Today the stock trades at around $17.
With numbers like those, even Pete Sampras might not be powerful enough to resuscitate the ailing Internet butler. "To slap a celebrity on and assume that's going to build your business is a strategy that doesn't necessarily work online," says Patrick Keane, a senior analyst for Jupiter Communications, which tracks Internet trends. And though the talent brokers are eager to increase their clients' exposure on the Internet, the Hollywood-Web marriage isn't always a happy one because the two cultures are fundamentally different.
Still, the dot-coms continue to flock to Hollywood. Even business-to-business companies are jumping on the bandwagon. Among the deals CAA has brokered recently is a partnership between video-technology outfit ipix and pop.com, which broadcasts original video entertainment and boasts Steven Spielberg among its founders. Previously, ipix' products -- which allow site designers to create interactive, rotating images -- hadn't made much headway in the entertainment industry. Since the pop deal was signed, says CEO James Phillips, ipix' phones have been ringing off the hook.
"CAA has provided us instant credibility in the entertainment industry and tremendous momentum," Phillips says. Two other major Hollywood talent brokers, International Creative Management and William Morris Agency Inc., are also seeing a surge in Web business.
BEYOND ACCESS. The Internet companies say that going Hollywood is part of a broader approach to marketing that will extend their brands beyond traditional advertising and give them identities that transcend the Web. For help on that score, Hollywood agents are providing more than just access to celebrities. William Morris, for example, recently arranged meetings between teen portal Alloy Online and several production companies. Alloy, which also publishes a number of book series for teens, hopes the meetings will result in TV shows and movies based on the books.
Still, the Hollywood trend has some Wall Street analysts scratching their heads, largely because Internet companies often won't reveal details about how much they're shelling out to the agents or what the payoff has been. "Maybe this is a good way for them to raise their profile," says Tim Albright, who covers William Morris client eBay for Salomon Smith Barney. "But at the end of the day, it's hard to figure out the return on investment."
But then again, the investment may not be that great. Many dot-coms, including Jeeves, are paying the agents and celebrities completely or partially in stock. And in general, the promotional events that come out of these relationships can be economical -- running six figures, as opposed to the millions typically spent on TV advertising. Jeeves, which got a balloon in the Macy's Thanksgiving Day Parade before joining up with Ovitz, claims it spent only $337,000 on the event. The week after Thanksgiving, traffic doubled on Ask Jeeves for Kids.
Indeed, a well-planned promotion can work wonders for visibility, and many marketing experts applaud dot-coms for moving beyond advertising and toward more creative brand-building tactics. On the flip side, they say, Web companies run the risk of allying with celebrities that don't enhance their image.
RIGHT IMAGE? "Actually, I see a bit of a stretch with askJeeves and Pete Sampras," says Erich Joachimsthaler, CEO of the New York-based Brand Leadership Company and author of the book Brand Leadership. "These dot-coms need to be careful that the association the celebrity stands for is linked to the site's brand identity. A celebrity alone can't create brand awareness anymore."
Agents also need to look before they leap. Ovitz found himself in a perilous position in mid-July, when several movie studios and recording companies sued Scour, in which Ovitz owns a 20% stake. The suit claims that Scour -- a site where visitors can share music and films -- facilitates piracy of copyrighted material. Ovitz is reportedly looking to sell his stake in the company.
Whether this controversy helps to stem the flow of deals between dot-coms and Hollywood talent brokers remains to be seen. For now, with a host of deals still in the works, it's clear that many dot-coms continue to bet that agents and the luminaries they represent will boost their bottom lines.
"Pete Sampras is the greatest player of all time, and that will add value to our brand," says Heather Staples, vice-president for marketing and communication at Ask Jeeves. But if it doesn't, Jeeves could be looking for a moonlighting gig.
By Arlene Weintraub in Los Angeles Edited by Beth Belton
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Copyright 2000, Bloomberg L.P.
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