June 6, 2000
Dot-Com to the Stars
The Intersection of the Internet and Celebrity
By LAURA M. HOLSON
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Frances Roberts for The New York Times
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Robert Levitan, chief executive of Flooz.com, with a cutout of Whoopi Goldberg, the spokeswoman for Flooz, a gift-certificate company.
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AN JOSE, Calif. -- Joe Montana and
Ronnie Lott, former stars of the San
Francisco 49ers, were there. So was
Keyshawn Johnson, the outspoken New
York Jets wide receiver who was recently traded to the Tampa Bay Buccaneers.
So it was no surprise that dozens of
venture capitalists and various other
boys of Silicon Valley were giddily
gathering around their Sunday afternoon heroes seeking autographs and
exchanging back slaps.
But the fawning was mutual at the
Fairmont Hotel where an all-star roster of football and baseball players
gathered one rainy afternoon in February for the annual meeting of Champion Ventures, an investment fund set
up for pro athletes. The athletes may
not have seemed as star-struck, but
they were eager to be there, too, seeking a piece of the dot-com action and
hoping a little Silicon Valley magic
would rub off on them.
"Yeah, I want equity," said Mr. Johnson, eyeing his agent warily across the
ballroom. "I don't want to be just the
guy with the name."
Talk about convergence. For all the
buzzwords about the future melding of
high-technology, multimedia and telecommunications, the real buzz these
days has more to do with the coming
together of Silicon Valley money and
the culture of celebrity.
"It's that little extra cachet," said
Kevin Fong, a venture capitalist with
the Mayfield Fund who hopes big-name
athletes will give an advantage to the
companies he has helped foster. "Everyone is jaded. They want a hot company right on the fine edge. Celebrities
do that."
If Silicon Valley is beginning to resemble Hollywood, chalk it up to more
than the Spago in downtown Palo Alto.
A parade of agents and celebrities
has been making the pilgrimage to
the Valley in recent months in the
hope of using fame to cash in on the
dot-com boom. The days, it seems, of
demanding simply a paycheck for a
product endorsement are passé.
Now, celebrities expect to be owners.
Of course, the peculiarities of the
Internet phenomenon have made all
that possible. Web companies that
need instant branding but have little
cash on hand can offer the lure of
stock options and potential market
riches. And who better than a movie
star or athlete to help them? Especially considering the success of William Shatner, the former Star Trek
icon, who received 125,000 stock options -- worth millions today -- to
pitch for Priceline.com. Or Cindy
Crawford who became the name and
face of the online fashion retailer
estyle Inc. for a stake in the company
and a seat on the board.
Even Hollywood agents are getting into the act, carving out a niche
in the lucrative new-media trade.
The Creative Artists Agency has
teamed up with Idealab, the creator
of on-line ventures like Etoys that is
based in Pasadena, Calif., to build
entertainment sites for the agency's
clients. And that doesn't even begin
to factor in what will happen when
large media and entertainment companies catch up. Then the lines between e-commerce, sports and entertainment will blur further.
"A lot of companies are realizing
that entertainment might help them
get above the clutter," said John
Mass, a vice president at the William
Morris Agency in Los Angeles.
"There is finally a role for media and
entertainment having an effect on
technology."
As a result, venture capitalists are
beginning to act a little more like
Hollywood agents.
"To the extent
Hollywood is about access, we have
it," said Mr. Fong. And agents, who
control the talent, are beginning to
think more like dot-com venture capitalists.
If anyone would understand this,
Mr. Mass of William Morris would.
For eight years, Mr. Mass, a former
investment banker, has headed the
new-media group there, a talent
agency known more for its roster of
movie stars than its corporate accounts.
Several clients -- including Lucent
Technologies and Anheuser-Busch --
have knocked on his door recently
seeking help to execute their new-media strategies. In particular, he
said, William Morris arranged a
meeting between executives at
SportsLine.com and Intel before
SportsLine went public. As a result,
Intel made a 4.9 percent investment
in the company. "This gave SportsLine the halo of a technology company," he said.
William Morris has been equally
active in matching up stars with
Internet companies. Last September, an agent introduced Robert Levitan, the chief executive and co-founder of Flooz.com, which offers
online gift certificates for retail Internet sites, to Whoopi Goldberg.
Why? "Everyone realizes there is
no longer a distinction between marketing, branding and the experience," Mr. Levitan said. "Because
we had no brand equity we needed to
put brand attributes around the
product and service. Hollywood definitely wants a piece of that."
Mr. Levitan was looking for a
spokesman or spokeswoman for
Flooz. Ms. Goldberg, the star of "Sister Act" and a past host of the Oscars ceremony, was perfect for the
role, he said. She "speaks to all
groups, men, women, blacks,
whites," Mr. Levitan said. A 15-minute conversation turned into an
hour. And within a week, she had
signed a contract and was shooting
print ads -- becoming in the process
the third-largest shareholder in the
company. (Neither Mr. Levitan nor
Ms. Goldberg would disclose how
many options in the still-private
company she holds.)
"He knew what he was talking
about and I was ready to start," Ms.
Goldberg said in a recent interview.
But she has influence with more
than consumers. Mr. Levitan said
Flooz.com, which is based in New
York, recently signed a contract with
Barnesandnoble.com to offer Flooz
gift certificates. But Barnesandnoble.com was slow to follow
through. So he asked Ms. Goldberg to
give the executive in charge a nudge.
"I had her call and the secretary
was more than a little surprised,"
Mr. Levitan said. " 'It sounds like
her,' " he said the secretary whispered to her boss. It was just enough
to get the company moving on the
project. Besides, Ms. Goldberg said,
"I think it helped him understand
that this was not just a gig for me."
Indeed, what could be better than
having a hard-to-reach celebrity on
call? In January, Mr. Levitan made
the 45-minute ride to Ms. Goldberg's
home outside New York to show her
the coming year's marketing plan.
"What about Valentine's Day?"
Mr. Levitan said she asked him. He
had no commercials in the works. "I
have time next Tuesday," she told
him.
For Ms. Goldberg the experience,
so far, has been worthwhile. "People
say, 'Why did you do it?' " she said.
"I pay homage to William Shatner
because he made it viable to go to
folks like me. It was an opportunity
to make a little dough."
Besides, she added, it relieves
some of the pressure of relying solely
on movies as a source of income. "It
doesn't make you feel bad you didn't
have a huge opening weekend," Ms.
Goldberg said.
But access to celebrities can only
enhance success, it doesn't guarantee it. Silicon Valley and Hollywood
have a lot to offer each other, said
Daniel H. Case III, chairman of
Chase H&Q. The convergence of
technology and media is real. But, he
warned, "there is a growing numbness, a disconnectedness from reality."
Jim Breyer, a partner at the venture firm Accel Partners in Palo
Alto, agreed. He has talked to a number of celebrities looking to either
dot-com themselves or find a company looking for a spokesman. "Today
I can't tell you whether it will pay
off," he said. "Anyone who has spent
time putting these kinds of deals
together realizes it is really hard."
One concern is that in the crush to
cash in on the star of the moment,
business plans will be poorly thought
out. Just because a person knows
how to pose for a camera, for example, doesn't mean the poser knows
anything about building a Web business. Actors, too, are on location for
months on end and may underestimate how much work it takes to help
create a brand.
And while it may be
great fun to hang out with Joe Montana, Mr. Breyer said, "it is just as
important to talk about an idea."
That doesn't deter the likes of Calvin C. Lui, the 28-year-old chief executive of TheMan.com, a shopping and
lifestyle Web site for men. He recently hired Karen C. Sortito, a Hollywood marketing executive from
Sony Pictures Entertainment, as his
chief marketing officer. He was at
the Champion Ventures meeting,
picking up business cards, hoping
that one of the athletes would be
interested in his site and willing to
strike a deal.
So far, he has had no takers.
But
Mr. Montana is a wine drinker, he
mused, and maybe would be interested in writing a column about different vintages. Why not just hire a
professional wine columnist? Mr.
Lui grinned and sighed, as if pointing
out the obvious. "If Joe has a site
there," he said, "it will be read because it is Joe."
