A mid the many corporate earnings announcements for the fourth quarter 2001, an unassuming release from Hoover's Inc. could be easily overlooked. The company, which went public only in 1999, had its first profitable quarter, with profits of $122,000 on sales of $7.9 million, or $0.01 per share. A modest performance to say the least, except that Hoover's is primarily a dot-com company, deriving most of its revenue from subscriptions to its Web service. This makes Hoover's performance look a little more impressive. Moreover, it occurred in the still-devastated aftermath of the dot-com collapse and was accomplished by selling information, a high-risk business model on the Web.
Hoover's first profitable quarter is the result of a deliberate, multipart strategy to transform a small, advertising-revenue-supported service for consumers into a large, subscription-based business portal for the business professional/enterprise market. The strategy has involved building new products, shedding non-core products, adding extensive third-party content, beefing up search capabilities, and changing the business model. Nevertheless, Hoover's maintains some of its most appealing characteristics, including its distinctive proprietary content and lots of good, free information.
WORKING THE LOW END
Hoover's began in 1990 as Reference Press, a publisher of print company directories with profiles of large U.S. corporations. It made an early move to the Web in 1994, as Hoover's Online [www.hoovers.com]. Two years later, Reference Press officially changed its name to Hoover's, after founder Gary Hoover. Compared to other print company directories and the large proprietary company databases of the time, Hoover's products were modest; it concentrated on a relatively small number of the thousands of U.S. corporations, its information was not extensive, and the search capabilities of the Web site were elementary.
Nevertheless, Hoover's print and online products established a foothold by focusing on companies of great interest to investors and business researchers. The company descriptions are informative and well written, with a dash of humor. One example: "Business is working out for Bally Total Fitness Holdings." Notably, Hoover's products have always been inexpensive. The print directories are available in many libraries, and the online content is widely distributed among other online services and Web sites.
HOOVER'S BEST CONTENT
Although Hoover's Online has become a full-fledged aggregator, its most distinctive content remains its proprietary company descriptions: Company Profiles and Company Capsules. The descriptions are based on public records and contain information that is freely available all over the Web, but the selection criteria and appealing writing style make them stand out among lots of commodity-grade company information.
Company Capsules contain a short, staff-written description, news, summary of operations, products, top competitors, and financial information. There are 18,000 profiles, including all companies traded on the New York, American, and NASDAQ exchanges; important private U.S. companies; large foreign corporations; and significant non-corporate enterprises.
Hoover's Company Profiles (a for-fee option) provide operational and financial information on 5,000 large and noteworthy enterprises--note the word is "enterprises," not "companies"--because Hoover's includes significant non-corporate organizations, as well as public corporations. Approximately 4,000 Profiles cover the largest U.S. public corporations; the rest of Hoover's profiles cover large private U.S. companies, large foreign corporations, and other prominent enterprises, including government agencies, associations, unions, foundations, universities, and even professional sports teams.
Each Profile has the expected elements: address, officers, line(s) of business, subsidiaries, locations and subsidiaries/divisions, competitor list, current news (from NewsEdge), and financials (from Media General). …