One year later, Luminant's world, headed by CEO Mr. Marmol, 52, is perhaps more rooted in reality: Its market capitalization has dropped to $227 million; its stock has floundered.
Luminant's stock went public at $18 a year ago this week. From its Sept. 16, 1999, start and after hitting a high of $52 late last year, Luminant's stock traded at $8.38 at press time.
Once-hot Internet professional services are taking a hit because dot-coms can't afford them and traditional marketers are backing off from spending heavily for online work, assessing the landscape before deciding what to do next.
Mr. Marmol noted Internet professional services are an unpopular bunch with investors. Luminant has suffered from "guilt by association," he said. A second-tier player compared to Sapient Corp., Scient Corp. and Proxicom -- i-shops Luminant considers competitors -- Luminant is vulnerable to marketers' and investors' cold feet.
`SOMEWHAT OUT OF FAVOR'
It's way behind first-tier players: According to the Ad Age Interactive 100, No. 9 Luminant had 1999 U.S. marketing-related services revenue of $65.9 million and worldwide revenue of $98 million.
"Our entire sector has gone from being very sought after to being somewhat out of favor," Mr. Marmol said. "We have had a lot of company in terms of investors' rethinking their investment priorities. Having said that, our company's market valuation does not, in our view, reflect the opportunities we see in our firm. We need to persuade the investment community of that fact."
The skepticism developed at the end of the first quarter and accelerated since then, he said. But Mr. Marmol said Luminant is holding its own, and he's trumpeting its potential to a stock market that has so far refused to acknowledge its relevance.
"I believe the industry as a whole has a tremendous range of opportunity for it . . . [and] will be very strong in 2001," he said, adding that new clients will be bigger, more traditional marketers.
Additional stats support its long-term viability, Mr. Marmol said: The company has 1,050 employees, up from 720 a year ago. (A year ago, Mr. Marmol predicted Luminant's staffing would double in its first year.) Its client base has expanded from 100 to 125 now, and its top 10 clients' average annualized revenue grew to $7 million in the second quarter ended June 30, more than double the annualized rate in the third quarter of 1999.
None of its top 25 clients has left, said Jim Corey, president-chief operating officer. Notable clients include AT&T Corp., Verizon Communications, DeBeers, Dr Pepper/
Seven Up, IBM Corp., MasterCard International, Maybelline, Mars' M&M/Mars and United Airlines.
NEW ROLE: TOILET PAPER
Its newest client is Kimberly-Clark Corp., for which Luminant is developing a Web site -- showing how far the Web has come -- to launch a new toilet paper. Luminant beat out undisclosed competitors with a "very light (hearted) program that would work well on the Web," a particular challenge when dealing "with such a sensitive product," Mr. Corey said.
Providing online services for consumer-goods companies is an important focus for Luminant, Mr. Corey said. For Maybelline, for example, Luminant developed Maybelline 5, a site aimed at a younger audience, such as teen-age girls. The site (www.maybelline5.com) includes beauty advice and message boards.
Mr. Marmol said morale is "good," though the roll up caused some employees to leave. "There were some who were very excited about being part of a larger entity who could do larger-scale work for still larger clients, and some who preferred working in a smaller environment. That's behind us now, and we have a team in place that's a Luminant team," Mr. Marmol said.
Ventures wedded under the Luminant name were Align Solutions Corp., a Houston Web services and systems integrator; Free Range Media, a Seattle site developer; interactive shops Integrated Consulting, Dallas, InterActive8, New York, and Multimedia Resources, Larchmont, N.Y.; Potomac Partners Management Consulting, a Reston, Va., e-commerce consultancy; and RSI Group, a Dallas data processing company.
Young & Rubicam, Luminant's largest shareholder, owns 20.6%. Young & Rubicam's i-shop, Brand Dialogue, New York, also was folded into Luminant.
WPP Group is slated to close on its acquisition of Young & Rubicam at the end of this month. WPP could be an intriguing partner since it has invested in more than 30 Internet ventures.
"We met with Sir Martin Sorrell and talked about how Luminant can work effectively with a much larger organization," Mr. Marmol said. "[The deal] will give us an opportunity to work with some of the other agencies within the WPP umbrella, such as J. Walter Thompson and Ogilvy & Mather, and will probably help us reach more directly into Europe, which is a goal of our firm."
Luminant almost doubled revenue in the first half compared to last year's first half, as losses narrowed. Revenue for the first six months was $73.8 million with a net loss of $58.8 million.
During the next year, Mr. Marmol said he expects Luminant will increase revenue "well beyond the $200 million mark." The company also intends to expand its Chicago and European operations, as well as launch an ad campaign to promote the company. It will likely select a WPP agency to create the campaign, a spokeswoman said.
Moving forward, Mr. Marmol said Luminant plans to play up its relationships with established companies in the U.S. and abroad: "The more we have an opportunity to discuss our work and the benefits our clients are receiving from the results of our assignments, the more people will see the work we do is based on sound business practices," he said. "This is spending being done by our clients to improve the core of their business. That's a message that needs to be sent and one that we will be sending."