Future developments

Another development under discussion is the advent of broadband. Extra bandwidth will give community sites like iVillage greater capacity to provide interactive services and introduce additional offerings, such as video and audio. 'We don't subscribe to the notion that cable networks and internet brands are meant to be in some sort of marriage,' says Carpenter. 'But we do feel that as bandwidth becomes available there will be ways to use it in support of our position - helping women do things, choose things and make choices.' She continues:

'Most research shows that women use TV to recuperate. So it's not clear that putting something that women use as a tool on a medium they use to relax is going to work.

'What we are looking at are shorter versions. In other words, instead of assuming that television just moves to the internet, we're assuming television stays television and then on the internet you'll ultimately be able to use more voice, more video to support the same goals.'

Carpenter cites the example of recipes, which are already searchable and downloadable from iVillage, as something that could benefit from a two-minute video clip. 'But we're not going to add a half-hour cookery show because that's not the point.' The point is, she says, that visitors come to the site to get help and information quickly and succinctly - and the new video offerings will support that premise.

5 hurdles… for Candice Carpenter and Nancy Evans and iVillage Persuading visitors to spend more. Increasing and improving e-commerce opportunities. Building the iVillage brand against increasing competition. Taking iVillage into other media. Convincing investors of the iVillage business model.

Such developments are important to iVillage as it seeks to exploit its undeniably strong position. However, its keenest challenge remains an ironic one: how to persuade women to stay on site and shop. Attracting women in as a resource is one thing, and the advertising revenues it brings in its wake are obviously welcome. But few doubt that those portals and community sites with the brightest future are those that can leverage their positions with regard to e-commerce. iVillage's showing in this area has been disappointing, although it has been pushing hard to improve matters.

The company's desire to increase e-commerce revenues has seen a flurry of end-of-year deals, including the $26 million acquisition of FamilyPoint.com, a photo gallery, address book and chat site. It also received $22.5m from PlanetRx for the drugs and vitamins group to sell its products via the iVillage site. Yet its share price is languishing. In a market where the appetite for net stocks remains ravenous, iVillage struggles to stay above its IPO price of March 1999.

The hard figures from the company's most recent results make typical reading for an internet company determined to spend its way to success. The question is whether, amid all the red ink, the building blocks to future revenue generation are being laid.

In its filing for its IPO, the company disclosed it had lost $76.3 million since its inception. In the nine months to September 1998, it achieved revenues of $9 million and made losses of $33 million. Its content, marketing and development costs amounted to $42.2 million. The company also warned, as it must, that 'Although our revenues have grown in recent quarters, we cannot assure you that we will achieve sufficient revenues for profitability.'

Marketing costs rose again in the third quarter of 1999, the group's most recent results, taking losses from $12.2 million to $28.4 million. Revenues jumped, however, from $4.29 million to $10.7 million. Advertising revenues continued to make up the bulk of the group's revenues.

Evans and Carpenter remain resolute in the face of their continuing losses and maintain that the group has a bright and independent future. 'Of course we've had plenty of approaches,' says Carpenter. But she says iVillage is very different to those community sites that have been snapped up by media companies:

There is little doubting iVillage's value as a web property. Leveraging that value is the challenge for Carpenter and Evans

'Tripod and Geocities are what I'd call pure social community sites where people go for self-expression. We are much more of a demographic destination. In addition to a community, we have stores, personal shoppers, planning tools, experts - it's a very goal-directed place. I think that differentiates us quite a bit. They're about gathering - we're about gathering to get things done.

'The other thing is that those community sites did not monetize well when they were bought. iVillage has the highest revenue per user of any major internet site, which shows that we've been able to monetize it well. Our revenue per thousand page views is around $31, Yahoo is $5. Of course you'd expect a difference because we have a totally different business model. But even CNet is only at $26 and even the next women's site is at $17.

The power of community - how Ford learned to love women Nancy Evans: The reason Ford came to iVillage as a major sponsor was not to sell cars - although that would have been an additional benefit. They came onto the site to become the car company that women liked, and they began by asking iVillage women what they wanted in a car. Ford had suddenly realized that women are buying more cars than men, not just influencing the purchases, as they have done traditionally. And those figures eventually prevailed on their marketing wisdom. Now what they have done is taken the ideas from literally thousands of our members and incorporated the top ones into a prototype car called the 'iVillager'. Women are so wonderfully common sense. Ideas they suggested included: Seat belts designed not just for men - for us they either strangle us up here or cut across less than desirable places. So now they're going to be fitting seat belts to suit women as well. Accelerator pedals wreck women's high heels, so they're changing the way the accelerator operates. Cup holders everywhere in the car so that kids and not just the driver have somewhere - I mean this is all so basic. And make those containers flexible so they hold different sized drinks. What about little tray tables that come down off the back seat so that kids can use them for drawing? How about another mirror next to the driver's one so that I can look up and see my kids in the back without having to turn round and cause an accident? And when you go grocery shopping and you put the bags in the boot and they all fall over - how about having dividers so the bags stand up? It was the most beautiful thing, and the replies are still coming in. Now how valuable a thing was that for Ford? They got all this fabulous research from real women, and women got to change the way cars are. Candice Carpenter: People loving your brands is as important as knowing your brands. Nancy Evans: And there is no more powerful medium than the internet for making that happen.

'So this combination of community, intentionality, problem solving and women is very powerful economically. Those other community sites almost had to be bought because they hadn't geared up totally to their business model. They got enormous amounts of traffic but hadn't balanced it up as to how you monetize it as a business. They were born to be adjuncts of something else, whereas iVillage wasn't.'

There is little doubting iVillage's value as a web property. Leveraging that value is the challenge for Carpenter and Evans. Would the company be better off sitting under the wing of one of the big portals, such as Yahoo or MSN, and receiving the traffic - and revenues - that would generate? Or perhaps sitting with a deep-pocketed traditional media company?

The two entrepreneurs would argue that it has been their independence from such organizations that has allowed them to develop the business the way they have; returning to the big company confines, particularly in the latter case, would stifle their corporate creativity.

But there remains a sense that iVillage's expenditure, and the length of time it must continue to bear that load, will at some stage require it to seek help. A merger with other women's sites might be one way forward. Certainly the flood of IPOs at the end of 1999 suggests that the market for multi-brands in the women's market is as strong on the internet as it is in the traditional media market of magazines.

As the biggest in the sector, iVillage would certainly approach any consolidation in a strong position. Whatever the outcome, the energy and drive of Candice Carpenter and the operational expertise of Nancy Evans are likely to ensure that the two entrepreneurs' roles are undiminished.