Buzz MSP revisits ties to Divine

Firm, consortium discuss financing, ownership

By Barbara Rose  Tribune Staff Writers  October 24, 2000

The marketing firm that helped generate buzz early this year for Internet consortium Divine Interventures Inc. and its founder, Andrew "Flip" Filipowski, is now creating a stir of its own.  First, Buzz Divine changed its named to Buzz MSP, partly to distance itself from Filipowski's enterprise and make it easier to woo clients outside the Divine orbit.  Now the company is in talks with Divine on how much money Divine will continue to invest in Buzz and whether Divine will remain the dominant owner of the integrated marketing firm.  Divine financed Buzz's start 15 months ago and owns about 80 percent of the company.  Buzz, with about 90 employees, is among the faster-growing and more successful of the services firms Filipowski funded as part of his initial idea to create an incubator where Internet start-ups could quickly get vital services.  But these services firms, which provide everything from real estate to recruiting assistance, have struggled to counter a perception that they are wholly-owned arms of Divine and thus would favor clients in which Divine had invested.  In an interview Monday, Buzz founder and CEO Karen Andre said about 50 percent of her firm's 22 clients are not related to Divine.  She also denied rumors that have circulated in recent weeks that Buzz is being sold, though she said the firm is talking with companies interested in investing in Buzz.  Such talks about strategic partnerships and funding "are a critical part as any start-up moves forward in their business," Andre said. "We are very early in our process."  One of the firms rumored to be interested in Buzz is Citigate Cunningham, the global technology division of London-based communications consortium Incepta Group PLC.  That firm's founder, Andy Cunningham, who built Cunningham Communication Inc. into a leading independent U.S. technology consultancy before selling to Incepta in July for $45 million, is a board member of Divine. But a Citigate Cunningham executive said there have been no talks with Buzz.  "We've had no substantive conversations with Buzz MSP about any kind of equity investment or an acquisition," said Morris Denton, who heads partnerships and acquisitions.  Buzz, with about 90 employees and a string of dot-com clients, including Ubid.com and Yesmail.com, promotes itself as a new type of integrated marketing firm, or "marketing solutions provider."  The MSP acronym is a nod to the tech jargon for one of the hottest Internet niches--ASP, or application service provider, which charges monthly fees to clients that essentially rent software to run their businesses.  Andre said Buzz approaches its offerings in a similar, pay-as-you-go way, letting clients pick what they need as they grow.  About 75 percent of its clients are start-ups--a red flag to investors who have seen public consultancies get burned when demand from struggling dot-com clients slows sharply.