ConsumerSearch Finds a Buyer in About.com
ConsumerSearch, a Washington product-review Web site, was nearly a casualty of the dot-com bust of 2001. But years of lean living and a strong assist from Google kept the company afloat and helped it fetch a $33 million sale price from About.com last week.
The six-person company was launched in 2000 to aggregate and analyze the dizzying array -- and often dubious quality -- of online product reviews. The idea was to sift through reviews of, say, a particular cellphone brand, find the best, most credible ones and present them in digestible, sourced form. Then the site would send potential buyers to consumer sites, such as Amazon.com. ConsumerSearch makes money from advertising on its site and is paid by consumer sites for sending traffic their way.
"We created an analysis portal," said Derek Drew, site co-founder and editor in chief. "Even if people had ADD, they could do their shopping from our site."
Drew lured 24 angel investors who contributed $1.25 million to start the company. Carl Hamann is the firm's other founder.
The dot-com bust forced Drew to slash his 15-person staff to two and some freelancers. The company disbanded its original Fulton Street fish market office in Manhattan and employees worked from home. Drew, who is the husband of Washington Post assistant managing editor Jill Dutt, moved to Washington and worked out of the couple's home here.
Such events usually presage dot-com doom. But ConsumerSearch's freelancers kept churning out the copy on hundreds of products and the site benefited mightily from Google, which has an "ability to determine excellence based on its algorithm," Drew said. Google began featuring ConsumerSearch high in search results, which drove traffic -- more 3 million unique visitors per month -- to the site.
As a result, revenue doubled each year, Drew said, and is now in the seven-figure range, though he wouldn't be precise. The site, which became profitable in 2004, generated enough interest from suitors that it hired Bank of America to hold an auction in February. Out of more than eight serious bidders, the New York Times Co.'s About.com prevailed. Drew and the company's five other employees will go to About.com.
Drew would not disclose his take of the $33 million sale price or his exact ownership stake in the company. He would say he owns 39 to 49 percent of the company and that, aside from the original $1.25 million, he has no other venture capitalists to pay off, though other employees will get a small percentage of the sale.
ConsumerSearch's managing editor, Christine Frietchen, who will get a cut of the sale price, said preparing her site's reports is like writing a term paper, complete with footnotes. She is most proud of her report on air purifiers. "It's an industry full of misinformation and shadiness," said Frietchen, who also works as a theater tailor (she's done costumes for Siegfried & Roy). "It's a joy to be able to parse that out for people."
-- Frank Ahrens