Hoover's Online - Constructing An Online Business Information Portal, 1996-2001

CONSTRUCTING AN ONLINE BUSINESS INFORMATION PORTAL (1996-2001)

Over the next several years Hoover's would evolve from a traditional reference book publisher to a provider of business information and electronic commerce across different media. By 1997 Hoover's database contained information on more than 10,000 public and private companies. During 1997 the company gained two equity investors, Internet search engine InfoSeek and Media General, Inc., a provider of news, information, and entertainment services. Both companies gained seats on Hoover's board of directors.

In 1998 Hoover's Online redesigned its site to create a portal that provided visitors with a variety of free, subscription, and personalized online services and databases. The focus of Hoover's portal was information about companies. By March 1998 the company's subscriber base reached 15,000, more than doubling over a six-month period. During 1998 the company partnered with Amazon.com to launch the Store at Hoover's, where visitors to Hoover's Online could purchase books, magazines, and CDs.

Hoover's Inc. went public on July 21, 1999, with an initial public offering that netted $42 million for the company. For its fiscal year ending March 31, 1999, Hoover's reported revenue of $9.2 million and a net loss of $2.2 million. During the coming year Hoover's losses would mount as the company spent more on sales and marketing and product development. During the year Hoover's formed new strategic partnerships and alliances and expanded existing ones. It signed an agreement with AltaVista Search Service to include its company capsules and profiles on AltaVista's investment area. An agreement with Reuters news service gave Hoover's access to additional information for new company profiles, while Reuters users could access Hoover's company capsules and industry snapshots. Hoover's also agreed to license some of its company information to CNBC.com and began co-producing exclusive editorial content for use at CNBC.com and on-air at CNBC. CNBC parent NBC purchased a minority interest in Hoover's, as did Knowledge Net Holdings and Nextera Enterprises. Hoover's also gained access to additional content through agreements with Media General Financial Services, Dow Jones & Co., and News Alert, Inc.

In September 1999 Hoover's launched a $10 million advertising campaign that included print ads in national business publications as well as the New York Times and USA Today. The campaign, which featured the tagline "Know Thy Stuff," also appeared in 15-second television spots on CBS, CNN, CNBC, ESPN, and MSNBC. At the time the campaign was launched, Hoover's was generating about 20 million page views per month and boasted more than 100,000 paying subscribers. The campaign was intended to introduce the newly designed Hoover's Online: The Business Network—developed through partnerships with Monster.com, Internet Travel Network, and Knowledge Universe—which offered a wider range of business-oriented services, including career information and business travel services. The site also featured a News and Analysis section, where users could find news items about specific companies and industries.

During 2000 Hoover's continued to enter into strategic alliances to gain additional content and wider distribution of its information. Through an agreement with Vault.com, Hoover's users could access Vault.com 's Employer Reports, which provided inside information about companies that was useful to job seekers. An agreement with Gomez Advisors gave Hoover's users access to rankings of Internet brokers and a link to Gomez.com. Other new content added to Hoover's during the year included Salary Wizard, made available for free from Salary.com, and interactive financial "tombstone" advertisements that announced the sale of new securities. During the year Hoover's invested in Intellifact.com and agreed to provide data to Intellifact's vertical Web sites. Hoover's also acquired Powerize.com for $17.1 million. Powerize.com was a content aggregator, and its Web site carried a wide range of business research and analysis.

Hoover's maintained an established presence in the United Kingdom through its London-based subsidiary, Hoover's Online Europe. At the beginning of 2001 Hoover's expanded its European presence by opening localized Web sites in France, Germany, Italy, and Spain. However, 2001 was a difficult year financially for Hoover's. It posted losses of $21.6 million in the quarter ending March 31 and of $2.8 million in the following quarter. In September 2001 the company announced it would close its London office and pursue international sales through its Austin, Texas, and New York offices as well as through sales agencies overseas. The company also said it would reduce its workforce by about 20 percent. During the year Jeffery Tarr, formerly CEO of now-defunct All.com, became Hoover's president and CEO, while Patrick Spain moved to his new position as executive chairman of the board for a time before he resigned to serve as chairman in a non-executive capacity effective. In a company news release, Tarr said that by sharpening its focus, streamlining its product offering, reducing its cost structure, and shifting the responsibilities of several key management positions, Hoover's expected to return to net income profitability by the quarter ending March 31, 2002.