When James Savage heard about Planet-All -- a community-based service that helps people stay in touch with business associates and friends--he was so intrigued that he left his VP-general manager position at ZDNet last month to become the startup company's CEO.
Mr. Savage, a 1997 Ad Age Digital Media Master, had helped take the ZDNet site from an area on CompuServe called ZiffNet to the No. 3 tech Web site in ad revenues, according to Jupiter Communications' December Interactive Content Scoreboard, which reported ZDNet's revenues for the first six months of 1997 as more than $9.3 million.
"In the future, the way people will stay in touch and stay up to date with contact information is digitally," Mr. Savage said. He also liked PlanetAll's universal appeal and utility. "It hits at a personal and business level."
550,000 REGISTERED USERS
Until now, the Cambridge, Mass.-based company has focused on building its technology and a membership base, which just topped 550,000 registered users, with a target of business professionals. This year, Mr. Savage said it's gearing up distribution and revenue models and increasing funding. The company won't disclose how much it's raised from investors CMG Information Services, @rts @lliance and Sun Capital.
PlanetAll's revenue model is a mix of ad banners sold for $30 per thousand impressions, sponsorships and commerce opportunities that mix contextually with its services. Current advertisers include Amazon.com, Virtual Emporium and electronic greeting card company Greet Street.
Mr. Savage points out that Greet Street recently had double-digit click-throughs with banner ads placed on an area of the site with birthday reminders.
Other ad categories that Planet-All is pursuing include telecommunications, scheduling software and gift companies, as well as online travel and related services for transaction-sharing.
Licensing the technology behind PlanetAll's services is another important revenue source. Services range from its Virtual Address Book, which is automatically updated when a friend changes his or her personal information, to Crossing Paths, which notifies members via e-mail when a business associate is in the area.
LICENSING DEALS IN THE WORKS
So far it has licensed Virtual Address Book to GeoCities, where the service is co-branded as GeoPlanet; and the Bernard C. Harris Publishing Group, a leading publisher of alumni and professional directories. Harris is incorporating the Virtual Address Book into the 50 alumni sites it's building. Other distribution partners include Infoseek, WhoWhere? and MonsterBoard.
However, advertising on the site has been slow to develop. PlanetAll hired Perry Allison, VP of advertising and sponsorship sales from Digital Equipment Corp.'s AltaVista, to ramp up ad sales. But Ms. Allison went back to AltaVista after less than a month for personal reasons and the position has yet to be filled.
One obstacle is gaining the critical mass needed to attract big name advertisers.
"I think their biggest stumbling block is that they rely on people to get their friends into the service," said Mark Peabody, research analyst at Aberdeen Group, Boston.
Mr. Peabody advocates Planet-All's strategy of licensing its technology to affinity groups and partnering with an Internet service provider or major browser.
"There are clearly sponsorship opportunities," he added, noting that PlanetAll's database of contact information, which it shares with advertisers as aggregate data, is very attractive.
"I like PlanetAll because it focuses on so many things people are ignoring--real relationship building," said Jerry Michalski, managing editor of Release 1.0, a publication of Internet think tank edVenture Holdings, New York.
"Too many Web sites are just a destination and not enough Web sites find a way to weave themselves into customers' daily lives--that's something that PlanetAll understands well."
A DIFFICULT AD SELL
At the same time, Mr. Michalski can see why PlanetAll might be a harder advertising sell. "They just don't fit into a category easily," he said.
PlanetAll was founded in September 1996 by Brian Robertson, chief technology officer, and President Warren Adams, who was traveling and working overseas and wanted to find a way to stay in touch with friends. Prior to starting PlanetAll, Mr. Adams worked as a senior research associate at Greenwich Associates, while Mr. Robertson was a software development engineer at ON Technologies Corp.
While Mr. Savage agrees that the startup faces many challenges building awareness and brand identity, he said that once he gets the message across to users, partners and advertisers, "it resonates immediately."
In 1998 "the focus is building critical mass," he adds, noting that his goal is to have registered users in the "millions" by yearend and synchronize PlanetAll to work with the leading scheduling software on the market. "We think the building blocks are now in place to really start driving revenue."
Copyright January 1998, Crain Communications Inc.