The last of the Mohicans. That’s a good description of independently held e-network About.com . Is About.com the next bride-to-be?
That’s a question that investors and About.com CEO and chairman Scott Kurnit have to be asking themselves these days. A quick survey of the Web landscape quickly reveals that next to the likes of Yahoo! , About.com is the largest independent e-network left standing.
Old competitors like Infoseek, Lycos , Snap and Excite have all been sucked into much larger media, cable or telecom companies. One would have to believe that About.com could soon be next.
However, Kurnit sits in the unique position of not having to skipper the typical money losing dot com desperate to do a deal or raise cash. About.com needs neither right now. With nearly $150 million in the bank, the company recently moved forward its projected date of profitability to the first quarter of 2001.
We recently caught up with Kurnit to discuss consolidation among e-networks and About.com’s unique “human Internet” approach to the crowded portal space.
ISR: What is About.com really today? I’m not sure it’s fair to just call you another portal.
Kurnit: We are a content network, which is a concept not particularly well understood in the medium because there aren’t others quite like us. [We offer] seven hundred sites with high quality in each one of our verticals, which are each led by a professional expert guide with consistent look and feel across the entire network. So it’s very consistent for our users. They can go from “space” to “pregnancy” to “composite materials” quite seamlessly. This is obviously wonderful for advertisers and marketers because it’s how they target a customer set.
ISR: How important is the human element of the “guides” at About? I’ve always thought of the “human face” you put on things as really different from the competition.
Kurnit: I know. It’s a critical differentiator. Obviously, people come partially to use our directories and meet other people, but the fact that there’s a human touch across the network, which is evident in our tag that we introduced a few weeks ago- “the human Internet”- speaks to that. You don’t see it in other places. You obviously see people popping up here and there across the Net. But there is no service where people are first and foremost with putting their credibility on the line and providing service to users.
ISR: From day one, you’ve always been focused on covering lots of niche and specialized areas with your guides. Today we call these areas “verticals.” Why’d you start out in this direction, though?
Kurnit: A couple of reasons. One, everything we did starts with the customer. It was clear to us that customers wanted a different way. It doesn’t mean Yahoo isn’t a fantastic service, because it is. But as we looked at the “cookie-cutters” of Excite, Lycos, Snap, and GO – it was clear that a different kind of service – a different way to organize information made sense. So to be able to organize seven topics with fifty thousand subjects underneath each led by a recognizable person was a different kind of service and would be a good customer experience.
ISR: Okay. What about the production side of things?
Kurnit: On the production side, being able to carve a very broad network that covers fifty thousand topics with a million links to other resources on the Net into “bite sized chunks” so that an individual could oversee it from anywhere. We have guides operating out of twenty countries. So to be able to run a distributed work force of high quality and highly talented people…
ISR: And very cost effective as well I might add.
Kurnit: Oh, absolutely and to be able to do it efficiently. The good news is that obviously it matched consumer differentiation and consumer need and then obviously the business realities of having
the components led by an individual in each one of the verticals.
ISR: Why do you think we haven’t seen any other major players head down this path?
Kurnit: First and foremost, when we started four years ago, most people thought that it couldn’t be done. Actually, I ran into someone in a suburban hardware store the other day – whom I had gone and pitched very early on in the business – who congratulated us on our success and confessed along with many other people that it must be that much more pleasing for you guys because there were very few [believers]. If you go back and read the news reports or the analyst reports from the likes of Jupiter and Forrester…
ISR: That all said – “Scott’s crazy.”
Kurnit: Yes. That we’d never see the light of day. That it was not a viable model and obviously they were dead wrong.
ISR: Let’s talk a little bit about consolidation because all of the portals you mentioned earlier have now merged with either a media company or a telco. It’s hard for me to imagine that a year from now you’ll still be independent?
Kurnit: Well, there’s no question that the industry is consolidating. We’ve had very rapid growth and have the ability through financial resources – we have well over $150 million dollars in the bank – and a solid march towards profitability. This is evident in our reduced quarterly loss over the last several quarters, to continue to be not only an independent company but also a consolidator of others. So far, we’ve bought six companies since going public in March of 1999. But at the same time, we’re in this to create value for shareholders.
ISR: Okay. Of course.
Kurnit: If consolidation makes sense, where we’re consolidated, we’re certainly open to it. The good news about our model is that it’s very efficient. We’ve got the financial resources, and it’s a differentiated offering, which allows us to really dictate those terms and play it the way we think is best both short term and long term.
