A man who stumbles upon the iVillage network of Web sites while surfing
the ‘Net might feel as though he has parachuted into the middle of a
women’s magazine.
Everywhere he turns he is surrounded by headlines touting advice on
dieting, relationships, fitness and beauty, money management, parenting
and careers, with a little astrology thrown in for good measure.
ESPN.com it ain’t.
Nor does it want to be. iVillage CEO Candice Carpenter’s vision from the
start was to create a network of Web sites devoted to women (ages 25 to
49) and what’s important to them. Men assuredly are welcome at iVillage
— indeed, they make up 18% of its nearly 1 million core members — but
don’t expect the latest box scores.
iVillage is banking on its status as the best-known women’s club in
cyberspace with a much-anticipated IPO the company hopes will raise
$47.5 million. The offering of 3.65 million shares, expected to price at
$12-$14 each, could be made as early as Monday. Lead underwriter is
Goldman Sachs.
The company also has attracted some high-profile investors, including
America Online — which will own 10% of iVillage after the IPO — NBC and Silicon
Valley venture firm Kleiner Perkins Caufield & Byers, an early and
influential backer.
iVillage was co-founded in 1995 by Carpenter, a former president of Time
Life Video and Television. Carpenter fun facts: She has a biology degree
from Stanford University and spent several years as an Outward Bound
instructional leader. The company’s first Web site, ParentSoup, went
live in early 1996.
Along the way iVillage has expanded its Web offerings through the
acquisition of content providers and competitors such as
ParentsPlace.com, Ourbaby and Health ResponseAbility Systems — deals that
have helped contribute to iVillage’s sizeable losses to date (more on
that later).
iVillage’s home page is the hub of a network of 14
Web sites (or channels) organized by subject matter. In addition to
those mentioned above, there are iVillage network sites devoted to
family, books, food, shopping, travel, pets and working from home.
Recognizing that women in general prefer interaction and communication
to mere information collection, iVillage also provides features that
enable members to ask questions of experts, use message boards and chat.
Basically, to hang around longer.
Sure, sites that aren’t female-centric do the same thing, but it’s
really emphasized at iVillage. Go there today and the most prominent
feature on the home page is something called “Speak Your Mind.” (The
question: “What would you do if you saw your friend’s husband with
another woman?” Clearly iVillage recognizes that, in addition to
providing useful information, sex and controversy don’t hurt either.)
While iVillage is developing electronic commerce revenue through iBaby,
a retailer of baby-related products, the company’s bottom-line bet is on
advertising and sponsorship, which comprised 80% of all revenue in 1998.
And why not? One of the greatest fear of Internet advertisers is that
they’re wasting money because they’re not effectively zeroing in on
their audience. Thus, iVillage’s promise that it offers “one of the most
demographically targeted online communities on the World Wide Web” is
compelling.
So too is iVillage’s claim that “women control or influence 80% of all
purchase decisions” made by consumers. Given the $3 trillion that
consumers spend annually, well, you don’t even have to do the math to
know that we’re talking about big bucks here.
Now about those losses. They’re quite impressive, and growing. In 1997
iVillage reported a net loss of $21.3 million against $6 million in
revenue; last year losses more than doubled, to $44.3 million,against
$15 million in revenue. Those aren’t pretty numbers, but not out of line
for companies growing through acquisition.
Still, the larger view is that iVillage is one of the first companies to
perfect the online advertising model — build a recognizable brand,
attract a huge yet targeted audience, and persuade visitors to linger.
If you believe advertising revenue will emerge as a legitimate (i.e.
profit-generating) basis for an Internet business model, iVillage seems
like a no-brainer, a sure winner.
Expect its IPO to blast off the launch pad, and expect iVillage to grow
into profitability.
