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Virgin Marketing

In this month's Wired cover story on -- and no, I will not call him "rebel billionaire" -- Sir Richard Branson's new Virgin Galactic (AKA Sub-Orbital Tourism for the Wealthy and the Comfortably Well-Off) is a great explanation of why, in the end, Virgin wants to send people into space:

Will Whitehorn is barking orders into a cell phone. Standing in the lobby of a sleek London hotel, he wears a black leather jacket and carries a flame-red helmet. What he calls "my office scooter," a hulking 650-cc Honda Deauville, is parked outside. At 44, the former North Sea oil-rig helicopter crewman is Virgin's group director of brand development, which usually translates as Branson's right hand...

It was Whitehorn who registered the idea of a Virgin space-travel company back in 1995. Four years later, amid talks with a now-defunct Mojave outfit called Rotary Rockets, he and Branson took the next step, trademarking the name Virgin Galactic...

Among Whitehorn's other contributions is a neat bit of business jargon, "branded venture capital." The phrase describes what Virgin does: fund and launch companies that can benefit from the group's accumulated experience and shrewd application of the Virgin logo. From an 80-person West London headquarters only a short stroll from Branson's town house, Virgin Management controls nearly 200 companies organized in a dozen major groups, with a total of 50,000 employees. Branson and a small group of other shareholders fund new businesses from a $600 million war chest fed by profits, sales of mature assets, and IPOs. Three Virgin companies are on stock exchanges in the UK, Belgium, and Australia, a number Whitehorn says could triple over the next several years, starting with Virgin Mobile's US offshoot in fall 2005. "We're like a little investment bank with a marketing department," he explains.

Virgin Galactic has the potential to be more than just the latest addition to the portfolio. "We've been looking for a flagship company for the 21st century," Whitehorn says, "especially for the US." The trans-Atlantic reference is no minor detail. Virgin Mobile found a sweet spot selling pay-as-you-go cell phones to young Americans who don't want long-term contracts. Still, overall, the US accounts for only 10 percent of Virgin Group's global revenue. So next in line is a low-cost, high-frills airline, Virgin America (Whitehorn calls it "JetBlue with business class"). Even much-maligned Virgin Cola will be getting a new US push.

"Galactic will put the Virgin brand on the American map in a way money can't buy," Whitehorn says. "It will cost us $100 million to take people to space. Vodafone is spending $100 million putting decals on Formula One racing cars. Every time someone mentions space travel, they'll mention Virgin."

I love this. It's brilliant. Whitehorn hits it dead-on. Look at how much press Virgin is getting for this already, and they haven't even finished designing their spacecraft.

This will go down as one of the cleverest uses of a $100 million marketing budget ever.

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