TRIUMPHS IN TECH: While tech stocks are suffering loudly, a handfulof hi-tech firms are thriving quietly. But how can they convey theirsuccess without appearing insensitive to public mood? Robin Londnerreports

Since bulls turned to bears in last year's tech market implosion,

all types of technology companies have been mauled. In the

July-September 2001 quarter alone, science and technology stock funds

lost 38.9%. For the year, the funds are down 53.7%.



But amid the gloom there are a number of success stories. At first

glance, the biggest challenge for PR execs at these still-thriving

technology companies is to contain their glee. But putting out good news

in a struggling sector can be a communications minefield of perceived

insensitivity and reporter disbelief. In fact, many PR execs interviewed

for this article say that rather than reporters calling them to discover

their company's secrets to hi-tech success, it's often up to the PR

person to source that success through quarterly statements or, in the

case of private companies, internal revenue reports.



As in the days of the dot-com explosion, hype overload may explain

reporter hesitancy. Om Malik, senior writer at Red Herring magazine,

says he usually receives 15 phone calls and 50 e-mails per day hyping

successful hi-tech companies. One or two of these, he says, he actually

deems successful.



"Unless a company has some customers, and/or a perceptible technology

edge, it's a tad hard to believe anyone," says Malik, who covers

internet infrastructure, telecoms, and private equity. "If it's a

company on my beat, I have a fairly good idea of the overall topography,

and it is not very difficult for me to figure out what is good and what

is bad, and which companies are successful."



Camouflaging success



September 11 has made the battle to break into good press even more

treacherous.



Practitioners representing hi-tech companies that stand to profit from

increased security concerns stemming from the terrorist attacks may

worry that communicating their products or business model may make them

seem more like preying vultures than proud American eagles.



"Now, more than ever, we need to be strategic," says Julie Pacino, GM of

Stanton-Crenshaw Communications in Huntington Beach, CA, which

represents udate.com, one of the many online dating services that saw a

bump in business after September 11. The public company reported Q3

earnings of $2 million.



A Reuters article 17 days after the attacks quoted the company CEO as

saying site traffic was up by 15%-20%.



"We should be moving forward and advising our clients to continue with

their programs as long as we are being cautious and not doing anything

in bad taste," says Pacino.



While many e-marketplaces that propose to link buyer and seller in

cyberspace saw their fortunes reverse along with their stock prices, a

few have survived.



Take AutoTrader.com, for instance. The company's listings of both used

and new cars for sale gives it buoyancy in a cyclical economy -

high-end, new vehicles in good times, used cars at cheaper prices in

lean times.



As a result, revenue at the privately held company actually increased

86% over the past year, with a $15 million rise in what for many

companies was a disastrous Q3 of 2001.



To communicate AutoTrader's success, PR coordinator Jody Scott steers

media conversations away from the gutted e-auto sector, and toward the

thriving online classified companies, such as Monster.com and

Realtor.com



The reason the strategy works, Scott says, is because AutoTrader, unlike

many e-auto sites, does not aim to sell cars. Instead, the company's

business model is based on the classified model. Comparing like to like

ensures the company will be featured in articles detailing the success

of online classifieds, not the demise of the majority of e-auto

sites.



"Media has the tendency to lump AutoTrader.com in with every other

company that has something to do with cars on the internet," says Scott.

"Since we are a survivor in a landscape that's been littered with e-auto

casualties, we've been positioning ourselves as an online classified

company - a media company, really - that doesn't rely on

transactions."



Another successful hi-tech area is the dot-com that offers information

to a specific audience under-served by competitors. For example,

CollegeRecruiter.com caters to college students and recent college

graduates seeking employment, and is therefore more focused than general

job sites. The company that runs the site has been profitable every

quarter for a decade. Steven Rothberg, president and founder, says

careful spending with an eye toward ROI has kept the company in the

black, while a PR strategy that ignores the competition has kept media

notices positive.



"We feel that virtually everyone we communicate with understands that

the vast majority of dot-coms lose money," says Rothberg, who handles

the PR function himself. "So when we say we've been profitable every

quarter, we have confidence that they can draw the inference that we're

different from our competitors, yet we don't have to criticize or bring

any direct attention to them. We want the focus to be on what we do, not

on what our competitors are doing (losing money) or failing to do (make

money)."



Rothberg's strategy differs markedly from AutoTrader's tactic of

positive comparisons with similar business models, but it has netted his

company press coverage with ABCNews.com, BusinessWeek.com, the Chicago

Tribune, eCompany, Fortune, Small Business, and The Wall Street Journal,

among others.



Agency involvement



While Rothberg has kept his PR function closely held, other hi-tech

companies credit their agencies for bringing additional communications

strategy expertise to media plans. Keith Goldberg, VP of marketing for

Biz360, praises Peter Evers, president of Magnet PR in Oakland, CA. Even

with 100% quarter-to-quarter growth, an online PR and marketing

measurement service might be expected to be tough on its own PR

representation. But Biz360 has been working with Evers for nearly a year

now, after numerous extensions to an initial four-month contract.



"In this time, people are very unfocused and are only really interested

in covering what they absolutely have to," says Goldberg. "So mainstays

like Microsoft and Compaq end up getting more of the ink than usual. For

that reason, Peter's ability to dial up a long-time contact at Fortune

or Smart Business and guarantee a meeting is key for us or anyone."



But since September 11, many hi-tech companies and their agencies have

increased concerns over communications. Wary of appearing to capitalize

on fear, firms that are in a position to profit from security issues

raised by the terrorist attacks must communicate a genuine ability and

readiness to help, but not appear eager to profit from a skittish

public.



Eight-month-old iJET, an "intelligence agency for the global travel

industry," leapt from obscurity to prominence at 10am on September 11.

The immediate challenge for its newly hired agency, Alexandra, VA-based

Periscope Communications, was to position iJET's travel safety and

counter-terrorism personnel as experts, without appearing to profit or

shill in the wake of human loss.



"No one wants to look like a jerk making money on the backs of the

dead," says Periscope CEO Dan Baum. "We knew September 11 was a defining

moment, and we knew we had to react fast and react appropriately. So

iJET temporarily waived fees for its services to avoid the perception of

profiting from disaster."



While a PR strategy specific to a successful hi-tech company is

important, some PR lessons apply no matter who the client, and no matter

what the circumstances. Merilee Kern, owner of Kern Communications,

represents eDiets.com, a subscription-based online diet center that

posted Q3 revenues of $7 million, up 85% year over year. Kern

insists, "A compelling, relevant, and timely proactive pitch, and a

tenacious, yet cautious, follow-up is still the key to successfully

generating interest within the media and to getting the often elusive

ink."



That basic newsworthiness, according to PR professionals and technology

reporters alike, is still the bedrock for media coverage of

e-companies.



And hi-tech PR folks can take that to the e-bank.



HANDSPRING BALANCES SENSITIVITY WITH HOLIDAY SALES



Handspring's stock may be down more than 93 points from its all-time

high of 99 just over a year ago, but the handheld computer manufacturer

still expects 16% growth in 2001.



Jennifer Colton is a VP at Switzer Communications, where Handspring is a

two-and-a-half-year top account served by nearly a third of the

24-person agency staff. Colton says the tough tech market has changed

the company's communications strategy from fun add-ons such as games,

cameras, and other luxury items, to an emphasis on value and

innovation.



But increasing competition in a shrinking sector means Handspring is

counting on a profitable 2001 Christmas season to end the year with

targeted revenues of $312 million to $316 million. To

ensure its products hit Santa's sack, Handspring had to announce two new

handhelds just one week after September 11, and a new product on October

15.



"We didn't want to seem insensitive, but we had a job to do," says Brian

Jaquet, Handspring's corporate communications manager.



Jaquet says company pitches were restricted to beat journalists who

needed to cover the company. Later, anthrax scares slowed shipping

samples to reviewers, which he says helped justify the decision to

announce earlier rather than later. Through e-mail and telephone

conversations, reporters let the company know if their beats or

priorities had changed.



Media strategy, Jaquet says, is based around what his competition is

doing. For that reason, new products or innovations define his media

plan.



"This market would be a lot more difficult if we had nothing to talk

about."



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