Tom Arnold doesn't use the internet that much. He primarily plays solitaire on his computer and only goes online to answer e-mail. Yet that did not sway the actor from joining the board of directors and acting as spokesman for Broadband Infrastructure Group, a St. Louis Internet company. Eventually he plans to launch an Internet talk show with the company's help.
Before joining Broadband, Arnold was approached by other Internet companies promising stakes in their ventures in exchange for an endorsement. "You get into these meetings and people have some very big numbers for you," Arnold says. "For a minute I believed them.
"But the Internet is just like Hollywood. Every movie is going to be a hit movie and everyone is going to make half-a-billion dollars and it doesn't always work that way. That's how the Internet goes."
To be certain, the Internet has produced a bumper crop of box-office flops of late, particularly on the entertainment front. Still, there has been no shortage of Hollywood movie stars, television actors, professional athletes, supermodels and pop music singers willing to lend their endorsements - or Internet companies vying for their attention.
For dot-com start-ups with little cash on hand, granting rich option packages to celebrities such as supermodel Cindy Crawford is a sure-fire method of securing instant branding and a measure of credibility for their sites. For the celebrities, it's a chance to gamble on the Internet bonanza like any other investor, and an opportunity to get involved in ventures in which they may share an interest beyond their mainstream careers.
Cover girl Crawford joined the board of fashion retailer eStyle last year and agreed to act as the spokeswoman for its Babystyle.com site in exchange for shares. Crawford, who gave birth to a baby boy around the same time, also writes a parenting advice column for the site.
"I'm going to be investing a great deal of my time and energy developing eStyle with [founder] Laurie [McCartney] over the next few years," Crawford said at the time. "I believed in what Babystyle.com was trying to accomplish and thought that I could make a positive contribution to the team."
While some celebrities simply represent online companies, a few, like Shaquille O'Neal, Martha Stewart and Oprah Winfrey, have become Internet moguls in their own right. Stewart runs Martha Stewart Living Omnimedia, which went public last year and includes her MarthaStewart.com site in addition to her Martha Stewart Living newspaper, magazine and television offerings. Winfrey, the reigning queen of talk shows, is a partner in Oxygen Media, a cable television station, and publisher of the magazine O and a network of Web sites targeting female viewers. LA Lakers' superstar O'Neal signed with CBS Sportsline.com in 1996 for a multiyear equity deal, the first time an athlete received a stake in a company in return for providing himself as content. His other Internet venture, Dunk.net, launched earlier this year, offers customized athletic shoes and clothing.
Singer Alanis Morissette may have made the most savvy deal to date. She and her management company reportedly got stock options worth about $30 million from music site MP3.com.
Beam Me Up, Scotty
But few celebrities have received as much attention for the success of their online endorsements as William Shatner, the Star Trek icon, who received 125,000 stock options - at one time worth more than $7 million - to pitch for Priceline.com. In a series of hip radio and television ads during the last 18 months, Shatner enabled Priceline to stand out from a throng of Internet start-ups, and in the process set his own star ablaze again. He was also able to beam out $3 million worth of his stock before Priceline's shares tanked.
While most companies have sought celebrities for branding purposes, a few have found valuable business partners in the process. In September, Robert Levitan, chief executive and co-founder of Flooz.com, which offers online gift certificates for retail Internet sites, was looking for a celebrity to bring attention to his start-up. An agent from William Morris introduced him to Whoopi Goldberg.
The movie star, television game show host and past Oscars host, was a perfect spokeswoman for Flooz, Levitan says. "Whoopi has got lots of attitude. She speaks to everyone," he says. "She speaks to men, women, young, old, blacks, whites."
In exchange for her endorsement through a series of print and television ads, Goldberg receives both cash and an undisclosed amount of stock in the company. Her deal has made Goldberg the third largest shareholder in Flooz, a privately held company.
The result is more than just a passing interest in its prospects. Every time Flooz lands a contract worth $1 million or more, Goldberg calls that company's CEO and offers her personal thanks, Levitan says.
Of course, getting a top-name celebrity on board is no guarantee of success. In the end, an Internet venture lives and dies on the strength of its business model.
Take the case of Pop.com. Ron Howard, along with Steven Spielberg and Jeffrey Katzenberg, backed what was to become a can't-miss Internet entertainment portal. Microsoft co-founder Paul Allen kicked in $50 million, and stars such as Steve Martin and Drew Barrymore agreed to make short films for the site. Despite its all-star cast, the venture flopped and closed up shop before it even launched.
The Internet is also becoming a haven for celebrities in need of a career boost. Gary Coleman has become the spokesman for UGO Networks which runs Underground Online in New York. The former star of Diff'rent Strokes writes a regular video game column and an advice column for UGO. Coleman got involved with the company after Underground held an online auction raising $10,000 to help Coleman after he filed for bankruptcy.
"There's more of a chance of me being on the Internet than in television," Coleman says. "I want to keep working. I don't want to be one of those dot-commers that disappears."
Coleman gets paid cash as a salaried employee of the Underground Online, says J. Moses, chief executive and founder of UGO. "It's helping us to establish our brand and it's doing it in a cost-effective way."
