CKS Group (USWeb/CKS; MarchFirst)

Founded as CKS Partners in Campbell, Calif., 1991; incorporated as CKS Group, 1994; merged with two extensions of the CKS brand?CKS Pictures and CKS Interactive, January 1998; CKS Partners merged with USWeb Corp. to form USWeb/CKS, 1998; merged with Whittman-Hart, 1999; renamed MarchFirst, 2000; declared bankruptcy and went out of business, 2001. In 1991, three former executives of Apple Computer?Bill Cleary, Mark Kvamme and Tom Suiter?formed CKS Partners in Campbell, Calif. In so doing, they pioneered what became known as "interactive advertising," combining advertising and e-commerce with the capabilities of personal computers. CKS was among the first shops to be named interactive agency of record for many of its clients. The three founders of CKS Partners first met as executives at Apple Computer in the mid-1980s. Mr. Kvamme was an internal hardware manager for the Apple IIc; Mr. Cleary was a consumer marketing manager; and Mr. Suiter a creative director for the computer giant. CKS Partners was set up to be a one-stop shop: an agency that combined traditional advertising and media placement with product design, corporate identity solutions and multimedia content for technology and non-technology-oriented clients. Mr. Kvamme, CKS Partners' president-CEO and later chairman-CEO of CKS Group, had a vision to bring new efficiencies to marketing: Technology companies were cutting their normal product development cycles in half to rapidly roll out new products; they needed marketing strategies that would integrate with newly available advertising media such as CD-ROMs, the Internet and the World Wide Web. To Mr. Kvamme, the way to accomplish these efficiencies was through a great investment in new technology, including personal computers for every employee and skilled programmers to create the software and applications to drive their enhanced design needs. The advertising industry was slow to accept these changes, but as CKS Partners began to capitalize on the new advances, the industry began to take notice. CKS, however, did not work only for California-based software companies in its early years. In the second half of 1992, United Airlines chose the shop to handle an image overhaul that encompassed everything from its logo to its ticket counters. CKS utilized new technologies pushed to their limits, as it had only six months in which to design and implement the new blue and gray look for United. In early 1993, CKS partnered with BBDO Worldwide in what was referred to by an Apple spokeswoman as an "equally important" role in rolling out Apple Computer's Newton MessagePad hand-held digital assistant. CKS helped with Newton's packaging and created in-store displays and brochures. The shop also developed a 90-second digital in-store demonstration of a MessagePad written by CKS programmers. In 1994, the partners incorporated under the name CKS Group, with headquarters in Cupertino, Calif., and offices in Campbell; San Francisco; Portland, Ore.; and London. The company began operating 24 hours a day, seven days a week to maintain a data center and its clients' Web sites. It designed and implemented Web sites and integrated marketing campaigns for Microsoft Corp., McDonald's Corp., General Motors Corp., Clinique Laboratories and Prudential Insurance Co. of America. In November 1994, the agency began the first of several large projects for MCI Telecommunications to develop and maintain a new online service, internetMCI. In May 1996, CKS began a campaign to introduce MCI One?an integrated communications service that provided customers with services ranging from long distance to the Internet for a flat fee-with packaging, a Web site, direct mail and after-market services, as well as the company's corporate Web site. At the beginning of 1995, CKS Group caught the eye of the Interpublic Group of Cos., an agency holding company. Interpublic invested heavily in CKS, then valued at approximately $20 million, and came away with a minority stake and a means to advance the integration of its own technological aspirations. CKS in turn gained access to Interpublic's considerable resources. CKS began an IPO in December 1995 at a valuation that had exploded to more than $200 million. Interpublic in 1996 sold back many of its shares, keeping a 20% stake. CKS' successful IPO inspired a revolution of similar considerations for some of its contemporaries such as Interpublic's Poppe Tyson and True North Communications' TN Technologies. After CKS went public, it began pursuing a program of acquisitions, beginning in August 1996 with New York agency Schell/Mullaney and continuing with another New York shop, Donovan & Green, and McKinney & Silver, Raleigh, N.C., both in January 1997. That March, CKS purchased Electronische Publikationen GmbH of Germany and Gormley & Partners, Greenwich, Conn., followed by another interactive ad agency, SiteSpecific, in June 1997. Acquisition of outside companies proved a popular trend for a while among integrated marketing companies, which could increase resources and revenue more quickly through acquisitions than by building from within. But in November 1997, CKS Group announced fourth-quarter earnings for that year would remain significantly below expectations; as a result, investors began to abandon the company, and its stock dropped to an all-time low. The company explained the disappointment as the result of accounting methods that relied heavily on expected future projects, making valuation hard to pinpoint. Investors, however, feared that the company had gotten too caught up in an industry not yet come of age. At the beginning of 1998, CKS' creative reputation was still riding high, as the agency tallied more 1997 Web awards from the Web Marketing Association than any other interactive agency, including three Best of Industry Web Awards and five Outstanding Web Site awards for a number of clients. Later that year, CKS won an assignment from Levi Strauss & Co. to set up its first e-commerce endeavor. In September 1998, CKS Group reached an agreement with another Internet-consulting pioneer, USWeb, Santa Clara, Calif. In a stock swap valued at $300 million, the two businesses merged, forming USWeb/CKS. The combined company had more than 1,800 employees in more than 50 offices in six countries. USWeb CEO Joe Firmage became CEO of the newly merged company, while Mr. Kvamme became chairman, and Toby Corey moved from president-chief operating officer of USWeb to those same titles at the merged company. In November 1998, the company recruited Robert Shaw, exec VP for Oracle Corp.'s Worldwide Consulting Services, as CEO; Mr. Firmage became chief strategist until leaving the company with Mr. Corey in January 1999. Mr. Kvamme relinquished his post as chairman later that year to become a partner in the venture capitalist firm Sequoia Capital; he remained on USWeb/CKS' board. Mr. Shaw continued to try to meld the 47 different businesses USWeb and CKS had made in the preceding four years. In December 1999, Mr. Shaw found himself at the helm of a company?now with 4,000 employees in 13 countries?preparing to merge with business-to-business technology consultant Whittman-Hart. The merged company claimed combined revenue of $991.8 billion in 1999, with 9,000 employees in 70-plus offices worldwide, making it the largest consultancy devoted entirely to the Internet. On March 1, 2000, the venture announced its new name, MarchFirst. One month after the merger's completion, Mr. Shaw resigned to launch his own venture capital firm. Whittman-Hart was left with a company that was exploding with opportunity but that faced a major challenge: how to meet expectations that its massive size and talent could integrate its complex systems and marketing strategies in record time for several hundred clients all at once. In its first several months, MarchFirst took on more than 1,500 clients looking for Internet professional services. Despite strong early projections, by November 2000 it seemed that the company was not reaching its intended goals. MarchFirst's stock had dropped nearly 100% since the day it opened, to just over $1; the company cited too much dependency on dot-com clients. It was forced to lay off a considerable portion of its employees and announced a change in strategy that included building tighter and more strategic relationships with its key clients, and cutting contracts with more than 1,000 mostly dot-com companies to focus on top clients. In April 2001, MarchFirst filed for protection from creditors under Chapter 11 of the U.S. bankruptcy code. Subsequently, it was liquidated.

CKS Group (USWeb/CKS; MarchFirst)

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