RealTime IT News

CMGI Plays the Name Game

In an effort to boost its bruised ego, CMGI announced it would acquire the naming rights to the New England Patriots' yet-to-be-built $325 million stadium. In exchange for the "CMGI Field" vanity plate, the Internet venture capitalist will pony up $120 million over the next 15 years for the privilege. Investors cheered the deal, sending shares climbing 15% on three times average daily volume, and adding nearly $2 billion in market cap to the beleaguered stock.

CMGI's plan is to raise awareness for its brimming portfolio by driving foot-traffic from football fans to its network of Web properties. While some may question the worth in spending $7.6 million per year, it's comparable to most dot-com's branding budgets; and desperate times do call for desperate measures. Although CMGI doesn't sell sugar water or Web access to consumers, the name recognition could pay dividends in other ways.

Companies eager to pair with the pigskin have high hopes for blockbuster nationally televised games. It also helps if you're partnered with a big market team who has a healthy record for winning. The Patriots score on both counts, having gone from duds to studs in less than a decade ensuring that couch potatoes everywhere will be sure to tune in. In addition, CMGI will have a share at first dibs on cushy executive suites to wine and dine bigwigs, as well as a wheelbarrow full of tickets to pass along to its employees.

The name game has been running rampant in a booming economy crowded with upstarts desperate to nail down an intuitive branding strategy. It's also a byproduct of the soaring costs associated with building swanky new stadiums to attract players, ticket sales, and respect. Rather than saddle taxpayers with sticker shock, owners are sniffing out interested corporations to foot a substantial portion of the bill. But, prices for naming rights are easily outpacing simple inflation in an effort to keep pace with explosive demand.

With a limited number of worthwhile stadiums to attract deep pockets keen on high-priced toys, stadium owners are scrambling to unlock more hidden value than the tomb of Egypt's boy king. Recent deals include PSINet's 20-year, $100 million deal for the new Baltimore Ravens stadium. Qualcomm plunked down a modest $20 million to lock in its name on the San Diego Chargers' stadium for the next two decades. But hands-down, the most successful branding initiative belongs to 3Com , with its wildly controversial name swap of San Francisco 49ers' Candlestick Park for a paltry $4 million over 5 years. In the hotbed of technology, the networker's deal didn't hurt in establishing itself as a household name.

Will CMGI be able to mirror the branding success enjoyed by other technology firms? Well, for starters, the name isn't all that catchy outside of high-tech or investing circles, a sentiment echoed by one Bostonian who opined, "sounds like a pregnancy test." But if the gamble should pay off, the price paid for CMGI's long-term partnership will likely prove relatively cheap in hindsight to rivals who consider following suit. Bottom line - the deal looks like a snug fit for an Internet bellwether walking a high-wire act without a net.

Any questions or comments, love letters or hate mail? As always, feel free to forward them to kblack@internet.com.

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