1Business Model L.Ghafoorian

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Outline Introduction The Changing face of the media industry Women as a market History Target market The competition WWW.iVILLAGE.COM Financial issues iVillage’s Business Model iVillage‘s Business strategy

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Introduction Name value iVillage.com has an implication of women

society. iVillage comes from my village. Candice Carpenter is confounder and CEO of iVillage iVillage is extremely successful in market iVillage is the ultimate women’s online resource Competition in media (OXYGEN,…) In meeting with stockholders, innovation is most

important to remain in competition

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The Changing face of the media industry(1)

Internet is the most popular in the world Internet redefined the role of media Increasing number of internet users Low cost infrastructure Nature of its interactivity Anyone can access to computer and internet Commerce revenue on the internet increasingly rise With going internet, traditional media were going to

shake down

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The Changing face of the media industry(2)

with internet and e-commerce , traditional media can distribute and interactive and retain audiences

Internet has not managed to replace other media Internet was blurring the lines between different form of media Forcing traditional radio station,magazine,newspapers to build

a presence in other channel Media focus on the strength and elasticity the suitability to

different end user device iVillage created a strong brand on a specific market

Women aged 25 to 49

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Women as a market Women control 85% of all personal and household

goods spending Women consume media per day 8.2 hours to 8.8

hours Women comprise 57% of new internet service

provider subscribers 77% of women went online to explore, but 86%stayed

because they found information that helped them get through their daily lives

Why women’s websitesHave grown

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WWW.iVILLAGE.COMHistory Established in 1995 by CEO Candice Carpenter and

editor-in-chief Nancy Evans Carpenter as a mother of two childrens:

Women today are so pragmatic and they use to internet to find out how to get things done

iVillage was for women looking for information on topics such as children,health,family

Online community where members develop relationships

The consumers drive to the site's innovation The company has to respond by further developing the

offering to fit the needs and wants of its users

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WWW.iVILLAGE.COMTarget Market One of the most demographically targeted

online communities on the web Developed to the interests and needs of

women aged 25 through 49 iVillage was an attractive market segment for

advertisers and sponsors iVillage was recognized as a leader in

developing innovative sponsorships and commerce relationship

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iVillalge Demographic ProfileGender Female/Male 80%/20%

Age Average 33.7Household Income Average 54.744$

Material Status

MarriedLiving with parents

SingleSeparated/divorced/widowed

59.6%7.6%21.7%11.2%

Employment status

Full timePart timeWork from homeUnemployedStudent

55%9.7%9.3%5.6%9.1%

Education

Graduated collegeAttended graduate schoolPostgraduate degree

61.2%6.4%12.7%

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The competition

We must stay focused as opportunities are ours to keep

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Women. COM Owned by Hearst New media and technology Originally founded as a content site Exploit Hearst's rich database on women customers Include of some community features and started a

small commerce venture

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Oxygen media ,Inc. Backed by strong media and heavy investors Was founded by Geraldine Lay Bourne (most powerful women

executives in TV industry) Interested for innovative approach to satisfying women’ s need Combined (entertainment power of TV & power of internet)

interactive television and site Oxygen’s model was innovative , more comprehensive , and hard

to imitate To raise revenue

Attracted a board range of advertisers Attracted E-Commerce partners Charging fees per subscribers

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Oxygen media ,Inc. to raise money use by attracting advertisers Oxygen's business model is unique and innovative "The combination of Oxygen online and Oxygen cable is a

futuristic and visionary approach that will shape the future of the new media industry.“

iVillage and Oxygen are competitors in terms of same target market and on-line service. The more value they provide to the customer, the more attractive their

websites are. Thus, the company who owns a large number of customers would have greater competitive advantage

According to the intuition of women iVillage is quiet, safe and peaceful, while oxygen if full of adventure and exciting..

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WWW.iVILLAGE.COMProduct Network’s communities ,find solutions ,handle challenges Community

Friends with similar interest Devoted to discussion, debate, and sharing ideas

Goals of iVillage: Help women navigate through increasingly busy lives Maximize their potential in their various roles as parents, friends ,spouses

,partners ,career women, bread winner, employees ,individuals The first company that offer this type of online product to women content-only based community – based Information on finance or world news Provide group of experts for consultation Discussion boards of like-mind women to help and share

experience Women can get all kinds of information they wanted on iVillage.com

without buying newspaper or magazine. On this point iVillage offers their customer the lower cost products.

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Products

Software: library, book keeping,Billing ,legal, payroll,..

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Traffic Ivillage was the most successful women’s web sites Traffic flow is vital success and future potential in internet

business model Statistic in June 19982 million different visitors of ivillage Twice the traffic of competitor such women.com In April 1998 6 million pages view

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Financial Issue iVillage (like companies based on WWW) had accumulated a

substantial deficit Profitability was not a near goal

Due to restructuring iVillage’s business model

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iVillage’s business model iVillage (Based on content and community ) revenues:

Selling banners, text-link , sponsorship from other business Traffic attracting advertising client Business model volume-based model (volume is vital factor to attracting

advertising client) Successfully of advertising-based model Reaching the broadest possible audience/viewers/readers/visitors/so-called

eyeballs Advertising might be successful is to have a highly targeted and specialized

audience The number of viewers is also called the volume of viewers; hence this

model is: volume-based approach. But internet advertising :1% of the total revenue More web sites were competing for the advertisement

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Revenue Source Banner advertising Sponsorship Production e-commerce Content licensing Satellite television through the Newborn Channel Print media Direct mail Video production

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Sponsorship Charles Schwab & Co

Financia l or investing related sites. Ford Motor Media

Promotion of the sale of Ford automotive products across our Web sites. Fuji Photo Film USA

Exclusive sponsorship for the photographic film, disposable camera and digital camera categories throughout our network.

General Electric Exclusive sponsorship for GE Appliances of the speed cooking ovens category

throughout our network. Glaxo Wellcome

Exclusive sponsorship for certain disease categories throughout our network. Ralston Purina

creation of a pet channel and provider of content, experts, customer service and distribution for the pet channel.

Warner Lambert promoting and marketing a range of products.

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iVillage’s business model iVillage (Based on content and community ) revenues:

Selling banners, text-link , sponsorship from other business Traffic attracting advertising client Business model volume-based model (volume is vital factor to attracting

advertising client) Successfully of advertising-based model Reaching the broadest possible audience/viewers/readers/visitors/so-called

eyeballs Advertising might be successful is to have a highly targeted and specialized

audience The number of viewers is also called the volume of viewers; hence this

model is: volume-based approach. But internet advertising :1% of the total revenue More web sites were competing for the advertisement

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Advertising models Generalized portal (also called a horizontal/general

portal )Yahoo,msn. Personalized portal (which is a generalized portal that is customized

to the user’s preference) my.yahoo.com

Specialized portal (also called a vertical portal) Free model

some service or product is given free

Recommender system Community provider:

experts provide information in response to queries from community members.

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General vs.. Vertical Portal General Portal Attempt to attract a

very large general audience and then retain it on-site by providing in-depth vertical content channels

Vertical Portal Attempt to attract

highly focused, loyal audiences with a deep interest in either community or specialized content

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iVillage – Vertical Portal Focus on women aged 25 and above. Topics of high importance to women Health & Well-Being Beauty & Style Diet & Fitness Pregnancy & Parenting Home & Food Entertainment Magazine General Features:

Astrology, Message Boards, Blogs, Newsletters, Free Stuff, Quizzes, Games, Shopping, Multimedia, Search

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iVillage’s business model(2) In stead of congested banner and link and advertisement

new business Customer profile (different message board) iVillage develops its e-commerce especially for information

service When search brief information pay money whole information

customer can be benefited from two aspects: the information is updated because the communication

is ongoing every day. the information is much valuable and the customer can

use it to solve the problem in real life. Customer loyalty :more value to customer. It is an important differentiate strategy for iVillage. This cause e commerce business model generate profit

Register any conversation separated by location ,interest ,hobbies

�First Mover

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The shift to e-commerce For instance:

Amazon.com:2.5 million books,1998:124.5$ million loose Spend vast amount money marketing its product and services

But iVillage have distinct advantage iVillage launch iBaby to its existing customer base and online community Content site community site e – commerce new commerce revenues by selling products or services that have a high

degree of relevance to our members iBaby:

delivered baby products and gift service in world wide Quick and convenient shopping experience for it’s customer Offer more than 14000 baby related products Access to over 800 vendor

The combination of volume-based and e-commerce business model provides more value to the customer

iBaby

Ware housing

Inventory control

Customer service

Shipment flow precisely

Efficiency

effectiveness

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Business strategy BUILD STRONG BRAND RECOGNITION

branding expenditures toward offline branding on television and radio, through direct media spending and through strategic alliances with traditional media partners.

AGGRESSIVELY GROW MEMBERSHIP Once the user has visited iVillage.com, our mission is to convert that user to a

member ENHANCE AND EXPAND THE NETWORK PURSUE STRATEGIC ACQUISITIONS AND ALLIANCES

Promote iVillage name Drive traffic to iVillage website

Online Psych, one of the largest online health communities focused on mental health;

Lamaze Publishing, a multimedia provider of education information to expectant and new mothers

Family Point, a leading online meeting place for families, friends and groups with similar interests.

INCREASE SPONSOR AND ADVERTISING REVENUES GENERATE E-COMMERCE REVENUES

Differentiation

Strong competitors: Oxygen

Focus on the core business area

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Reference iVillage website statistic: www.corporate-ir.net /ireye/ ir_site.zhtm l?

ticker IVIL&script2100. Lisa Allen, Bill Bass, Chris Charron, and Jill Aldort, “Old Media’s New Role,” The Forrester Report, no. 5 (January 1999), p. 6. Allison Abraham, “Internet Communities,” Presentation in Electronic

Commerce class, New York University, Stern School of Business, April 12, 1999.

Heather Green, “For Women, iVillage is a Site of Their Own,” Business

Week, businessweek.com/1998/29/b3587126.htm, July 20, 1998. Susan Karlin, “It Takes an iVillage,” Upside Magazine,

www.upside.com/ texis/mvm/story?id=3665bcf40, December 2, 1998.

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