As the Bahamas-based telco pushes ahead with post-merger marketing plans, it is mired in a bidding contest with Qwest Communications not only for Frontier but U S West.
No matter who triumphs, Gotham wins. The agency is expected to get the Global Crossing account even if deals with Frontier and U S West fall through. Gotham will handle consumer and trade advertising, and will target new customers and the business community.
AGREEMENT EXPECTED THIS WEEK
Gotham declined comment. A Global Crossing spokesman acknowledged the company is in negotiations with an agency but declined to name it; he said the agreement would not be complete until this week.
Also believed to have been in contention for the account are DDB Worldwide, New York, which handles U S West, and J. Walter Thompson USA, New York, which handles Qwest.
The original request for proposals-sent before the bidding war began-estimated the post-merger ad budget at $40 million to $50 million. However, that figure later was adjusted downward. The Global Crossing spokesman declined to disclose a figure, but said the agency's billings would be "a fraction" of the original amount.
"While the choice of an agency could be considered premature, it actually might be a brilliant strategy," said telecom analyst Jeffrey Kagan. "It would show the confidence Global Crossing has in winning the deal and it shows the synergy-they're thinking about how this new company will build its brand and be a player."
SHIFTING THE BALANCE
In the struggle for corporate control, even small maneuvers can shift the balance of power. Just last week, Global Crossing released the Securities & Exchange Commission document that details exactly how Frontier and U S West fit into the company. Qwest has not released any details of its plans.
Global Crossing made its play for Frontier in March, followed by its deal with U S West in May. Qwest then jumped in with unsolicited offers of about $55 billion for both, trumping Global Crossing's estimated $45 billion bid.
Although Frontier and U S West had signed initial agreements with Global Crossing, the latter agreed to a waiver that allows it to have discussions with Qwest.
Both Global Crossing and Qwest are run by former highly placed AT&T Corp. veterans-Robert Annunziata and Joseph Nacchio, respectively. Each wants to buy Frontier and U S West to add heft to their bottom lines, as well as get a foot in the door with an established customer base.