Gerstner IBM, FOX CHURN TV & TECHNOLOGY REALIGNMENT

Published on .

IBM Corp. and Fox Inc. ignited mega-quakes last week and for the same reason: Both unveiled plans for massive restructurings certain to radically alter how they and rivals do business on a global scale.

Hyperbole-and shock-abounded after IBM's surprise consolidation of its $500 million global ad budget at Ogilvy & Mather Worldwide, and also after news that Fox raided 12 strong TV stations from CBS, ABC and NBC.

Together, these bold initiatives set the worlds of media, technology marketing and advertising abuzz with speculation about their global implications.

Take the fate of Merkley Newman Harty, tabbed just seven months ago to handle work for IBM's supposedly autonomous PC company. Although Merkley's Omnicom Group parent had outfitted it with a $1 million technology system and plenty of fresh troops, when IBM Chairman Louis V. Gerstner Jr. decided to recentralize, it wasn't enough.

Meanwhile, O&M traded in Microsoft Corp., the world's largest PC software marketer, for Big Blue, the largest computer company.

Thus, mighty Microsoft was unceremoniously in play, agency-wise. In turn, Microsoft's two dozen ad shops were up in the air as the Redmond, Wash.-based software company considers awarding its estimated $165 million ad business to a single agency.

At Fox, news that the broadcaster was recasting the Big 3 networks as the Big 4 touched off a new world order for the network TV business. "Overnight," one industry analyst observed, "you have Rupert Murdoch a lot farther down the road to a truly global TV empire."

In this article:
Most Popular