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Jake Winebaum, CEO, Business.com

Jake WeinbaumJake Winebaum's foray into the online world began when he sold FamilyFun magazine to Disney in 1992. Seeing opportunities for the entertainment conglomerate, he led its move to the Internet as president of Disney Online, soon becoming chairman of Disney's interactive unit, Buena Vista Internet Group.

As chairman, Winebaum presided over the creation of Disney's portal play, Go.com, which launched at great expense in December 1998. The portal, which melded Disney properties, including ABC.com, ESPN.com and Infoseek, promptly became a spectacular flop by 2001. But Winebaum had bailed in 1999 to start eCompanies, an incubator and venture fund, with EarthLink founder Sky Dayton. The firm's holdings include Jamdat , a mobile game developer; Boingo Wireless, a network of Wi-Fi hotspots; and USBX, an investment bank.

In its heyday, eCompanies financed Icebox.com, eHobbies.com, eMemories.com, eParties.com and Business.com. ECompanies made history by paying $7.5 million for the Business.com domain name -- although Winebaum said it was an all-stock, funny-money deal.

Business.com went out large, luring the Los Angeles bureau chief of the Wall Street Journal to become editor-in-chief overseeing a staff of 60. When times got tough for ad-supported content sites, Business.com fell back on its directory-style search. Its directory now contains 26 major industry categories and more than 400,000 listings within 25,000 sub-categories.

Although the glamour is gone, the site boasts 12 million unique visitors a month and has carved out a niche providing its targeted search to online business publications.

Winebaum spoke with internetnews.com about the Business.com search model, as well as the site's ability to weather the dot-com storm.

Q: Business.com launched in 2000, but there seemed to be a two-year hiatus between 2002 and 2004. Is that the case?

We've been in stealth mode for a while. We learned a lesson: Deeds, not words. We built this thing out, kept it under the radar screen. Now, so much attention is being given to specialized search, we've been raising our hands.

Business.com started in 2000, and I took over as CEO in 2002. The company was rapidly heading for the wall. It started as a business search engine and became a portal. We focused on an original idea: Help businesses find information, news, jobs -- whatever they were looking for.

We grew 150 percent a year in revenue for the last four years, and we've been profitable for the last two years. We continue to get better at what we're doing. We've honed down on search and directory, with a taxonomy that now includes 100,000 categories, plus millions of business terms. That's a key asset.

We started off thinking there was a need for a search engine for business professionals as opposed to a general search engine. It's proved to be true. One of the big trends in search is specialization, taking a particular element, whether jobs, travel or shopping. [The competitive key is] who's going to have the most comprehensive index.

Q: How do you accomplish search?

Our core asset is our directory and taxonomy. We use an algorithmic search on top of that. We used Jakarta Lucene [an open source text search engine library written in Java] as the kernel, and built a number of applications on that. In 2002, we added paid search results. Sponsored links are a combination of Business.com's and Google's AdSense.

We use a combination of humans to create structure and then machines to use the structure to find relevant results. What's great about that is that we're different from other players. We determine relevance as to whether a company belongs in a specific category. Overture over the years has tried to do more of that. We don't allow promotional language, like "free." We want the listings to be as descriptive as possible.

Q: How do you see Business.com competing with the major search providers?

What typically happens in a new medium is that general interest products get established first. They have enough critical mass to afford programming and attract advertisers. It's the same whether you're talking about general interest magazines or television networks. Then, as the critical mass of users and advertisers grows, there start to be specific business models that can focus on the needs of part of a group of users. It happened in cable TV. ESPN was showing tractor pulls. They got enough audience to be able to buy the rights to sporting events or to develop their own.

That's happening in specialized search. Specialized search doesn't replace general search. We're complementary to Google, and we're partners with Google. We use it to backfill our results if we don't have a relevant listing in our database. And AdSense was a partner from the beginning.

Q: What went wrong at Disney? How could such a powerful brand and wealthy company finish last in the portal competition?

Infoseek was a defensive acquisition. As other portals became ascendant, Disney feared they would make things like ESPN generic. Why do you need ESPN.com if you can get sports scores through search? They weren't that worried about the Disney brand. They acquired the No.3 search engine for almost no money at a time when no one was paying attention to search.

The mistake they made was that they wanted to use the user base of search to introduce their brands as a portalization. One lesson from watching that was that a true portal is a gateway to other things. Google to date has been true to its mission to find the best that's out there, not its own content. For [Business.com], once we got rid of the content we published and helped users find information on the Web, that's when our business took off. Yahoo has a different balance, they have content of their own, plus search and Overture.

If Disney had focused on search when it acquired Infoseek as a standalone, and not tried to use it as a gateway to their own content, it would have been best.

The other mistake people made in 1999 or 2000 was that they felt that search was a business that would die. As users became more experienced, they would become more familiar with destination sites and go there directly. But people didn't imagine how many uses people would have for the Internet. They use the Internet for more and more things, so they use search more and more. That's the thing everyone missed. And business users are very heavy searchers, and the value of what they search for is much higher. If they search for consulting services or machinery, that might be a $2 million piece of business. And you can buy that query for three bucks.

Q: We saw a lot of glorious flameouts, and not that many of the original Internet companies have survived. What did you learn during the boom and bust that informs today's Business.com?

Focus. Knowing what you do and focusing on just doing that, and doing it well. We should have quit. Like all of our competitors, we should have packed it up. But we were convinced there was a real need for this. We kept at it, didn't get distracted, didn't let the hype of the demise of the Internet -- which was as big a hype as its rise -- get us down. We kept going, and it's paid off. We have a really unique position in a very attractive marketplace.