Issue: Is ImproveNet the Model for a Vertical
News: E-services site ImproveNet is
positioned as an alternative source of job leads for home improvement
contractors, many of them tired of the high cost and inefficiency of traditional
lead sources, including Yellow Pages. Even though it is a b-to-b dot-com
company, its common stock has taken a savage beating on the Nasdaq, spiraling
down to less than $5 at the May 8 close, compared with a first-day close
of $14.13 on March 16.
are a factor in the stock drop. ImproveNet lost $36.3 million in 1999
and $15.4 million in the first quarter of 2000 alone. Nonetheless, the
company is growing its share of revenue from e-services vs. advertising,
which suggests its revenue model is moving in the right direction. In
the first quarter of 2000, the company took in $782,000 in services revenue
and $510,000 in branding (advertising) revenue.
and Chief Executive Officer Ron Cooper recently briefed TKG on his company's
progress and how it defines success in the e-services space.