December 29, 2000

Procter & Gamble announced they have reached agreement to form a new business that will provide other companies with best-practice marketing know-how and practical marketing applications and tools via a global technology infrastructure.

The company will use its marketing management tools and engage its employees in developing the company name. Until then, the company will use the working name "Project EMM," for enterprise marketing management.

The new company will build marketing proficiency, improve collaboration and increase speed across companies, their agencies and partners, enabling them to build brands faster, more efficiently and more effectively. "Project EMM" will target its services initially to the top 2000 global marketers and will expand to mid- and small-size companies from there.

"Three major trends are converging to change the way marketing is done: brands and businesses are globalizing; marketing teams - including agencies, partners and suppliers - are more geographically dispersed; and speed is increasingly a deciding factor in whether companies win or lose. Yet one thing hasn't changed: consumers demand a consistent, high-quality brand experience," said Hunter Hastings, chief executive of the new company. "As a result, marketers need a true enterprise marketing management system that accelerates the marketing process, allows global collaboration, coordination and control and continually raises marketing proficiency, across the enterprise and its partners."

The combination of partners fuses Procter & Gamble's century-and-a-half of proven marketing know-how and tools with Magnifi's global marketing infrastructure to create the enterprise marketing management capability customers want.

"We transform marketing know-how into marketing can-do," said Dan Maurer, president of the new company. "We do it by embedding proven marketing best practices into practical tools and deliver them to desktops across the enterprise." The company's Enterprise Marketing Management service comprises marketing know-how, tools and infrastructure:

Marketing know-how - all aspects of the marketing process with modules for marketing strategy development and deployment, concept development and testing, pricing strategy, package design, advertising development, media planning, direct marketing, interactive marketing, and sophisticated new know-how and tools for Internet-enabled product development and testing, among others.

Marketing Tools - applications for consumer research, forecasting, targeting, testing, media planning and buying, and market simulation techniques, among others, that launch from the desk-top.
Patented Software & Global Infrastructure - Global hosting centers on multiple continents, patented software for easy access to a digitally stored brand memory of all marketing assets (advertising, artwork, strategy documents, historical data, etc.) searchable databases and collaboration tools, all accessible at any time, from anywhere.

Procter & Gamble is contributing 160-plus years of marketing knowledge and expertise to the business and will be a significant shareholder in the company. Two P&G executives will leave P&G to assume top management posts in the company. In addition, P&G intends to deploy the system throughout its global business.

"P&G's first priority is to build our global brands. We will use the Enterprise Marketing Management service ourselves to collaborate more effectively, get our learnings from one end of the organization to the other more quickly, and free our brand managers to spend more time listening to consumers and creating winning brand strategies and marketing programs. This will pay off in stronger brands. It's the key reason we're part of this new company," said P&G Global Marketing Officer Bob Wehling. "Creating this new company also is consistent with P&G's interest in developing new business models and its desire to get greater financial value out of core assets like R&D inventions and marketing know-how," he added.

Beyond P&G, other customers of "Project EMM" include The Coca-Cola Company, BBDO Worldwide and Philips Domestic Appliance and Personal Care division.

The company will be led by a team of senior level executives formerly of P&G and Magnifi who bring a wealth of experience in marketing and technology. They include: Hunter Hastings, chairman and chief executive (formerly CEO of Magnifi), who has an extensive background in brand marketing and corporate marketing services; Dan Maurer, president and chief operating officer (formerly general manager of P&G's i-Ventures), who has extensive international marketing and management experience in P&G's European and U.S. operations; Wade Miquelon, chief financial officer (formerly finance manager for P&G's e-commerce area, general partner for P&G's Internet venture fund and CFO for its Thailand operations), who brings experience in M&A, corporate treasury, new business development, and strategy development; Pete Farner, vice president corporate development, (formerly Magnifi senior vice president sales and business development) who is an experienced and successful development executive in established and start-up businesses; and Eric Hoffert, chief technology officer (founder and former chairman and CTO of Magnifi), who brings 17 years experience in the development and launch of digital media and Internet businesses, products and services for the mass market, including for Apple Computer's QuickTime software and at AT&T and Bell Labs.

The company has offices in Los Gatos, San Francisco, New York, and London, will soon open a new office in Cincinnati. It also has global data centers in Los Angeles, Atlanta, London and a fourth data center planned for Asia.

The transaction is subject to Hart Scott Rodino regulatory review and other standard conditions.

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