Lacking local impact, Buzz falls short of expectations

CHICAGO: The long-delayed July 12 IPO for Internet incubator Divine InterVentures has the PR world wondering whether Buzz Divine, the company’s marketing and PR arm, will follow through on plans to become a major Midwest hi-tech player.

CHICAGO: The long-delayed July 12 IPO for Internet incubator Divine InterVentures has the PR world wondering whether Buzz Divine, the company’s marketing and PR arm, will follow through on plans to become a major Midwest hi-tech player.

CHICAGO: The long-delayed July 12 IPO for Internet incubator Divine

InterVentures has the PR world wondering whether Buzz Divine, the

company’s marketing and PR arm, will follow through on plans to become a

major Midwest hi-tech player.



Buzz created its own buzz earlier this year, hiring PR and IR pros from

the likes of Financial Relations Board/BSMG and Hill & Knowlton. Since

then, however, the firm has been noticeably absent from the local PR

scene.



’When they first came to town, I was worried,’ said the head of one

national agency’s Chicago office. ’But I haven’t seen Buzz snare any

tech business this year.’ Two sources added that they heard Buzz has

pulled out of competitions for PR accounts in recent months.



Buzz director of PR David Onak said he could not comment because of the

quiet period surrounding its stock offering. He promised, however, that

Buzz intends to go after PR clients not affiliated with the ventures of

its parent company.



Buzz’s Web site lists three clients, including Click Interactive. But

Click director of PR Larry Mathias said, ’We are not currently working

with (Buzz) in any regard.’



Divine InterVentures is the brainchild of 49-year-old Andrew ’Flip’

Filipowski, who made a reported dollars 290 million when he sold his

last company, Platinum Technology. Filipowski has garnered widespread

coverage in Chicago during the past year, positioning himself as the

poster child for hi-tech development in the Windy City.



But as the stock market soured on Internet incubators, Divine ran into

problems with its IPO, through which the company was hoping to raise

dollars 460 million. Ultimately, Divine raised dollars 128.6 million in

its July stock sale.



Analysts estimate the company is burning through anywhere between

dollars 5 and dollars 15 million a month. Divine has started 54

companies since its birth last year but posted only dollars 5 million in

revenues during the first quarter, losing dollars 77 million.



’Divine is trying to attack the Internet from all angles,’ said

Morningstar stock analyst George Nichols.



Jeff Hirschkorn, a senior market analyst with IPO.com, said the

publicity Filipowski generated for his company might have created

unreasonable expectations.



’Divine has a lot of problems,’ he said. ’It’s got to get out of its own

shadow. They have to centralize their business and decide what they want

to be as a company.’ Whether PR will be part of the eventual mix is

unclear, he added.



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