Thursday, August 17, 2006
Interview with Chuck Hoover, Internet Brands
Los Angeles-based Internet Brands (www.internetbrands.com) has been on a roll lately with several acquisitions of web sites. The firm just announced last week that it acquired CruiseMates.com and CruiseReviews.com, two web sites that provide reviews and editorials on cruise lines; and prior to that, it purchased BBOnline, WikiTravel, and World66. Since lots of our readers are entrepreneurs, I thought it would be great to chat with Chuck Hoover, Senior Vice President of Marketing and Business Development for the firm, to get some better insights into how the company has made the decision to purchase those sites, and the thoughts behind the strategy.
Ben Kuo: It looks like you've been pretty active buying companies recently. How many web site have you bought recently?
Chuck Hoover: We've acquired 15 web sites in the last 12 months.
Ben Kuo: It's interesting to see how many you've made. I'd be interested in some of the thought behind this acquisitions--why the high level of activity?
Chuck Hoover: It goes back to what the company's strategy is, which is to help consumers with big ticket purchases. We help them in a couple of ways. One is to research those purchases, or help them transact or make those purchases. We are in three categories--travel, automotive, and real estate and mortgage. We're looking for web sites that can help consumers research and transact in those three categories.
Ben Kuo: How big have the firms been--it looks like some of these have been enthusiast web sites or small projects?
Chuck Hoover: We never reveal the terms of the deal. In terms of the deals, in many of these we are not doing company kind of acquisitions. We find acquisitions that extend us into a business line we're not in, or complement an existing one, and which helps us build market share in that category.
Ben Kuo: Can you share some of your strategy on how you find and decide to buy these sites?
Chuck Hoover: This is done by a group of people at the company that are out scouting for sites that would help us further the goals. Everyone doing this is an operator, not a big corporate development team. These are people who are running their businesses, and are looking to for opportunities to grow.
Ben Kuo: I imagine this is often a simple buy versus build decision?
Chuck Hoover: Yeah, that's exactly what we're doing. We do a combination of both, where we have bought a number of sites, but have also launched our own sites and added improvements to existing ones.
Ben Kuo: Are you integrating these web sites or expanding them, once you've purchased them?
Chuck Hoover: It depends on the category and the reason we bought the site. In general, what we do is we centralize the operations here in El Segundo, but we maintain the site independently.
Ben Kuo: I imagine you are adding employees with the acquisitions?
Chuck Hoover: Sometimes yes, and sometimes no. In instances, we'll leave the entire company and team in place, and other times we'll acquire no employees.
Ben Kuo: Are you planning on making more acquisitions?
Chuck Hoover: It's hard to say. It's always around the strategy and is dependent on if there is something attractive that also has attractive pricing. We've had good organic growth, and are continuing that organic growth.
Ben Kuo: We have a lot of entrepreneurs who are readers, is there anything you can talk about on what makes a good acquisition for you?
Chuck Hoover: I'd point back to our strategy of helping consumers research purchases. We're looking for great content to research big online purchases or facilitate those.
Ben Kuo: Are you buying traffic, or content?
Chuck Hoover: It could be anything, and it could be all of those things--traffic, content, or it could be the technology.
Ben Kuo: So you've also been making acquisitions for technology?
Chuck Hoover: One of the benefits with the ClientShop acquisition was their live transfer technology. ClientShop is the company we acquired in San Diego on the mortgage side.
Ben Kuo: Thanks for the insights!