HOME IMPROVEMENT SITES DRILL FRESH ONLINE NICHE: IMPROVENET, HOMEPORTFOLIO ATTRACT PROSPECTS

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While the Internet home-improvement category is small, it's growing steadily as manufacturers catch wind of the Web's potential to reach consumers.

ImproveNet, a Redwood City, Calif.,-based start-up, is one player trying to connect consumers eyeing a home-improvement project with potential architects, builders and manufacturers.

Its main revenue comes from a service in which it matches registered users with local, prequalified builders and designers. Contractors pay a lead fee to have access to prospects and then an additional fee if they win a project through the service.

CUSTOMIZED PITCHES

ImproveNet (www.improvenet.com), which has about 271,000 visitors a month, also offers SmartLeads, a program that uses information about consumers' projects--size, scope and timing--to sell direct-marketing e-mail opportunities to manufacturers. For instance, homeowners receive up to two customized marketing messages within ImproveNet Express, a weekly e-mail with home-improvement tips. Each message is linked to a marketing area on ImproveNet's site, which can contain anything from coupons to detailed product information and ways to find the closest dealer.

ImproveNet is not the only site competing in this category.

The main focus of HomePortfolio, a site (www.homeportfolio.com) created by BuildingBlocks Interactive Corp. of Newton, Mass., is to supply consumers with a selection of products from appliances to kitchen sinks to windows and exterior doors.

"We're creating the one-stop home-shopping place consumers can use for home decorating or renovation projects," said Tom Ashbrook, publisher of HomePortfolio.

The site's editors select products based on their quality. Those manufacturers are then encouraged to buy enhanced content areas to show off inventory and direct consumers to the nearest dealer. Manufacturer partners include Viking Range Corp., E.I. du Pont de Nemours & Co.'s Corian, Grohe faucets and Gaggenau appliances.

Mr. Ashbrook said he doesn't view ImproveNet as a competitor because ImproveNet's main focus is its referral service.

MORE THAN PRODUCT INFORMATION

Tony Glaves, senior VP-strategic relations and business development at ImproveNet, says most competing sites post manufacturers' product information online.

"We do that also," said Mr. Glaves, "but that's the least important thing we do. We're getting so much information up front that we can direct-mail electronically to people who are in the red zone," or the buying mind-set.

ImproveNet, which launched in 1997, has focused on building distribution and manufacturer support and financing. It's currently in its third round of financing and has Allstate Insurance Co. as one major investor. ImproveNet plans a first-quarter print and online campaign with a budget in "the millions," said Mr. Glaves. While ImproveNet creates its own advertising in-house, Avenue A, San Francisco, handles its media buying.

Distribution is a key part of its marketing. Current partners include Excite; Netscape Communications Corp.; Microsoft Corp.'s MSN, on which it's a partner on HomeAdvisor; and on America Online's Home & Garden area. ImproveNet also is talking to Intuit to be in its home area and with Infoseek Corp. to be in the Go Network.

INTRICATE WEB OF HOMEOWNERS

Ad and sponsorship packages usually fall under the SmartLeads program. Advertisers include KraftMaid Cabinetry; HomeStyles plans; Pozzi Window Co.; Monier Lifetile roofing; and Sears, Roebuck & Co. Banner ads range from $30 to $55 per thousand impressions depending on the targeting. Anchor partnerships cost about $15,000 a month. Advertisers can also choose to be in the Display Showcast, where users can view manufacturers' inventory.

"We're in a very fragmented industry in terms of trying to reach homeowners and builders," said Andy Mallen, marketing communications manager for Pozzi. "What they've created is a very interesting and intricate network of homeowners who are in the prime time of making buying decisions."

Ms. Mallen said Pozzi plans to tap key distributors to track leads and sales resulting from ImproveNet.

Lise Buyer, director-Internet/New Media Research at Credit Suisse First Boston, said ImproveNet is a company that couldn't exist in any other medium.

It's something "that provides a terrific solution to a real-world problem," she said. While the company is young and has a lot to prove, it's "conceptually

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