Bono Caught In Palm V. Blackberry Controversy
July 24, 2009 at 4:55 AM (PT)
U2 lead man BONO appears to have broken one of the most basic rules of marketing -- promote your own interests, not a competitor's, reports THE NEW YORK POST. The issue arises from his role as one of the co-founders ELEVATION PARTNERS, an investment firm which has put $435 million into smartphone maker PALM, and the work he's doing in commercials for PALM archrival RESEARCH IN MOTION, which makes the BLACKBERRY.
THE POST writes BONO's dual role could drag him into lawsuits by other PALM investors, who've held high hopes in the last six months for PALM's comeback with its new, device, the PRE.
PRE sales have stalled, overtaken by demand for BLACKBERRY's new models and iPHONES. PRE's sales are down at SPRINT stores from 140,000 in its first week to barely 22,000 in its sixth week, according to JNK WIRELESS CONSULTANT IGR. PALM CHAIRMAN-CEO JON RUBINSTEIN told analysts last week he's "very happy" with the launch and said "demand is strong and growing."
However, some feel BONO isn't helping PALM's sales with a commercial like the one he's done for the BLACKBERRY. BONO's TV spots for BLACKBERRY are tied-in with the release of U2's latest album, "No Line on the Horizon." While BLACKBERRY sales are healthy, sales of the U2 album are less than expected, with just 955,000 sold.
Whether investors will complain about PALM's early rough ride isn't clear. It's possible they might be able to use a well-worn legal argument that an employee who discovers a commercial opportunity for a competitor must first offer it to his employer for first refusal. "Someone could make the case using the principle that BONO knew he was coming out with his new album, and should have taken this commercial opportunity for an endorsement to PALM first," said BILL SINGER, a securities lawyer.