RealTime IT News

On the Record with Chris MacAskill

Is FatBrain.com a low margin books e-tailer, a b-to-b information management solutions provider or an emerging digital publishing machine? Take your pick. The answer to this question still appears unresolved for FatBrain shareholders.

While the company's roots lie in hawking technical manuals and books to corporate users, FatBrain has emerged in the past two years as a full-fledged information management provider. The company's document solution services now serve 300 of the Fortune 1000.

Last year, the company also launched eMatter, an innovative digital publishing initiative, which immediately captured worldwide attention. With interest for eMatter growing amongst consumers, FatBrain then decided to spin off this side of its business into a new company called MightyWords back in March.

All of this corporate re-shuffling, combined with the perception that FatBrain is still a pure e-tailer, has resulted in the market not treating FatBrain's stock price kindly to say the least. FatBrain's shares are down over 80% from its 52-week high.

We recently sat down with FatBrain CEO Chris MacAskill to better understand his company's overall future direction.

ISR: Let's strip away all the buzzwords and online publishing hype. What is FatBrain.com really today?

MacAskill: It's evolving, but it started as a professional bookstore that sells business-to-business. That is still the core of what it does, but it's heading in a very interesting direction. First off, to say a little bit about the professional bookstore, we go into people like Sun, Cisco, Microsoft and Intel and become their official bookstores.

ISR: On their corporate intranets, right?

MacAskill: That's right. So those companies will buy $300,000 worth of books from us a month. Their own employees buy these books individually, but then they get centralized billing and reporting. They really love that. As you know the business model for e-tailers in general is a very difficult model and no one has completely cracked it yet. I don't think there's a profitable e-tailer on the Internet yet.

ISR: E-tail has definitely been a tough nut to crack so far.

MacAskill: In any case, we've been laboring away at this business model for about three years, [while] knowing the difficulties of making profits with it.

ISR: I think that most people have the impression that you're still solely an online bookseller of technical manuals and books. You seem to be moving away from those roots actually?

MacAskill: Well, that's where we started. It is still the bulk of our revenues so I can understand the perception, but the company is migrating from that in a logical way. So in the future, it's not going to be anything like that.

ISR: Could you talk a little bit about your Information Exchange solution?

MacAskill: Basically, Information Exchange combines all the strengths of our company to solve a problem that is a headache at every Fortune 1000 company that I'm aware of today. Fundamentally, every corporation wants to go digital with their own documents to save time and cost.

ISR: Right. Definitely.

MacAskill: They all want a centralized repository of those documents that has a Web user interface. They love using FatBrain, Amazon and barnesandnoble.com. They don't like using their own internal document management software that is complex. They love the Web interface. So we do three things for them. First of all, we build them a Web site that can be branded for their company, but we run it. It is the "FatBrain experience." You get the cover scan, the ability to search quickly, descriptions of everything and it's your internal documents. It could be your annual report, your human resources manual or a research report your company wrote for internal consumption.

IS