OPEN
UNIVERSITY
0363
Virgin Portal Letter
[This is the covering letter for the final OU portal proposal. It also, however, describes the latter stages of the project – before its ultimate death!]
Many thanks for your reply. I look forward to talking again to Andy [Richard Branson’s director of new business] when he gets back. I should stress that, at this stage, all I want to do is to explore what the best match to Virgin's future needs might be; before, perhaps, taking it further. The last time I talked face-to-face with Andy I was only really considering Virgin as a supplier - as we were in the middle of negotiations with Cranfield School of Management for a joint venture (which would also have involved a number of other partners, such as Cisco, in support) - and, in that context, Brenda Ross might have been the obvious contact (though, especially in view of her workload at the start of the student year, her focus might - in view of the changed perspective - now be too close to student groups rather than affinity groups).
Since that time, however, the Cranfield deal has fallen through, due solely to the intransigence of Leo Murray (the Dean there) where his management team were very enthusiastic (and had put considerable work - many man months - into the project); and this has understandably caused me (and OUBS) to review the whole scheme. The outcome is that we have decided, in the first instance, to initially look for just one - highly entrepreneurial - partner. As you might expect, Richard Branson now becomes the obvious choice; should he be interested. In addition, from our point of view the wide spread of the Virgin.com business(es) seems to offer a very nice match; and, above all, from Richard's perspective the venture seems to very closely match his public service ambitions.
As I have said, Cisco are still helping us bring together a 'consortium', and Phil Smith, their Director of Development, might offer a direct route to Richard Branson, but I believe that an initial discussion with Andy might lead to a more saleable proposal; where we are quite flexible on most of the points - save only those regarding the ethical integrity of the scheme!
I take Andy's point about the more way-out numbers. We have never taken such hype seriously ourselves; since our own extensive investigations into e-commerce in general support Andy's comments exactly. In any case, the venture would be a long-term one. The AOL valuation, for instance, was only there as a teaser to gain attention - which it certainly did with OU management! On the other hand, we do indeed expect that the form of affinity group we are proposing will ultimately (albeit over the coming decades rather than weeks) be one of the most valuable developments in e-commerce!
In fact, all the financial justifications are on the basis of the profit stream alone - as befits a scheme with aspirations to benefit our alumni over their lifetimes rather than to speculate on an IPO in months. Even then, our projections have been made only on the back of the educational income; something we have a great deal of experience of predicting. But such comments are exactly the sort of advice I want from Andy; precisely so we do stand the best chance of success!
I won't impose on Andy the very minute he gets back, but will phone him on the following afternoon, Tuesday 5 September. In case he wants to get me - on my home number (01902 232165) - I will be in every afternoon that week.
Many thanks for your kind help. I hopefully look forward to meeting Andy early next month, for what I hope we will be a very fruitful discussion.
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