Monday, February 26, 2007
Interview with Jake Winebaum, CEO of Business.com
Jake Winebaum is the CEO of Business.com, which recently started a new web site, Work.com (www.work.com), which uses user-generated content in a business context to allow experts to provide advice and create business guides, and receive comments and ratings. socalTECH's Ben Kuo caught up with Jake about the company's new site, where the company is now, and Winebaum's views of Southern California's future.
Thanks for the interview! What is Work.com, and how does it fit into Business.com?
Jake Winebaum: We launched Work.com back in October. At its core are how-to guides for small businesses. Basically, the guides cover all of the common problems that small businesses face. We've got about 1400 guides, and they are written through our community platform that allows business experts to write a guide on their subject of expertise. They are different from traditional articles from publishers, in that they combine both content that helps the entrepreneur understand the problem, and action steps. If you go to the site, they all have a common format, starting with an introduction to the problem or task and running through action steps--anywhere from the 3 to 5 steps that an entrepreneur takes to solve that problem. These action steps typically include links to places on the Internet which address that particular step, such as lists of recommended providers, blogs, and discussion groups on that topic. These guides cover a broad range of subjects common to business.
You can write a guide on any subject on which you're an expert. The community aspect is both the ability to write a guide and the ability to rate those guides on the how well they solve a problem. The guide display rules on the site are based on the utility and popularity, activity level, and comments on each guide. You can see which guide is the most popular, and also find the highest rated experts. The experts are given a cumulative score based on the ratings of the guides they've written, the popularity of those guides, and community engagement on those guides.
Back to the original question, which is how does this fit Business.com. You'll see that some guides are now integrated into Business.com, correlated to tasks business people want to accomplish. We have two types of users--people searching exactly for what they're looking for, and other users who don't yet know enough about the subject to select suppliers or a service provider. The guides help this second group better understand the problem, and where to go on the Internet to find solutions.
Why would people want to add content to your expert guides?
Jake Winebaum: It's a lot of what's driven user-generated content on the consumer side, however here it's using more a business rationale. People want to be known as experts on a subject. They want to show off their expertise. There are two reasons for that. One is fame, the other is fortune. If you are an expert that writes highly rated guides, you get lots of visibility and activity. Each guide has a link to the profile of the expert, on that profile page you'll see the ability to contact the expert directly. What's in it for them? Say you are an expert writing a guide to business in Latin America or Mexico. Chances are, someone reading that may be interested in engaging with you as a consultant. It's a great source of referrals.
Business.com has been around for a few years, but you have been fairly quiet, where is the business now?
Jake Winebaum: We started in 2000, and we've been growing steadily since. We have been profitable since 2003, and we did a financing in 2004 that was led by Benchmark, IVP, and Evercore. We have continued to grow. We were named to the Inc 500 last year, and have been growing well over 50 percent a year. We are the leading business search engine and directory, and we had six million unique visitors in January. We also have a business ad network we launched in 2002 - you may have seen our press release last week announcing that we added the Wall Street Journal to our network. Our network now reaches 26 million business users a month across BusinessWeek, The Wall Street Journal, Forbes, Entrepreneur, CNET, GlobalSpec - almost all of the major business sites. We have some 7,000 advertisers who advertise on Business.com, and those ads are also distributed out to the network. If you search on something like "accounting software" on Business.com, you'll see some of those same results on Forbes, BusinessWeek or The Wall Street Journal. We've been profitable since 2003, and are continuing to grow very nicely, and have a really unique position in the marketplace.
A lot of people know you for eCompanies, how are things going there now?
Jake Winebaum: In 2000, eCompanies became more of a holding company for the various companies we started as investments. We had a great year last year. JAMDAT, one of our startups, went public and then sold to Electronic Arts. We were the lead and seed investor in LowerMyBills, which sold to Experian last year. I think the price on Electronic Arts was around $700M, and the acquisition of LowerMyBills was around $400M. Business.com is the largest holding, and Boingo is also one of holdings, and USBX, which was a marketplace for businesses for sale and is now an investment bank. USBX is the leading mid-tier investment bank focused on homeland security mergers and acquisitions. We had our dark days, as did most Internet companies in Southern California, but really had the persistence and stubbornness to not give up.
Let's talk more about Business.com, how do you compete against the big portals?
Jake Winebaum: We've been partners with Google since the beginning. We partner with them in many ways, and we feel we are very complementary. We get much deeper and more granular on business topics, particularly for entrepreneurs. Hence, they will start a search in Google and then drill deeper into the topic on Business.com -- in that respect we are quite complimentary. In the consumer space there's a difference between general search engines and vertical search, such as with travel. That differentiation has been slower in B2B, where you've needed a critical mass of companies and advertisers. We've stuck with it and focused, and are the only one in our space that survived. We've reached critical mass of advertisers and audience and maintain our own very significant customer base of engaged users. That makes for a great business. We co-exist with the big portals, and continue to co-exist nicely.
You probably won't like this question, but I'll ask it anyway. Have you obviously have a nice healthy business, but have you ever lived down the purchase of the Business.com domain name a few years back for what I think was a record $7.5M?
Jake Winebaum: It's an interesting question, after reading your article the other day on Richard Rosenblatt who just raised $200M for a company to buy domains. I think that we feel the same now about Business.com as we felt at the time -- Business.com is a very important address on the Internet. We are the highest level business domain that you can search on. If you search for "business" on Google or MSN we show up first. We think that a domain, by itself, is not worth that much money, but its worth a lot more with a very powerful business behind it. We think that the acquisition we made at the time was a good move, and now we think it's an even better move. The transaction at the time was a stock transaction, so it's not fully known yet what we paid for the domain. My hope, sincerely, is that the guy who we bought it from makes more than $7.5M, and over time it's worth a huge amount of money. My feeling was that it was a good move, though it got a little more notoriety than I would have liked, and I think over time people will judge it as a very smart move.
What's next, and where do you see the future?
Jake Winebaum: Since you're from Southern California, you know that last year was an amazing year for Internet companies. I'm on the board of Shopzilla, and had involvement in Neopets, and certainly JAMDAT and LowerMyBills. The LA market has helped us attract a very talented team at Business.com, and that's also evidenced by Yahoo's move down here and Google's move down here. The difference in LA is that companies here are not technology focused, they're audience focused. They build technologies to serve the user, and serve them exceptionally well. We build very good technology to serve our users and customers--for example, we built our own search engine and ad platform and publishing system. Southern California is a great place for Internet companies. There's been a huge amount of growth, and we're really happy to have stuck it out down here. We stuck with it through a tough market, and achieved scale, even when people had dropped out. We're now coming into a really strong market, with scale, ahead of the competition. I don't know if you know, but of the recent exits over $300M, fifty percent were from Southern California. In terms of Business.com, the future for us is to improve our product for the needs of our users and our clients, the advertisers, and we feel very confident that we'll be able to do that with the team and experience we've been able to put together in Southern California.
Thanks for the time and great insights!