Rodale stirs up plan for Net revenue

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Seeking additional revenue through Internet media, Rodale today launches Rodale Interactive, a business unit devoted to developing online properties. Rodale Interactive not only will be charged with investing in online companies, but also, in a departure from Rodale protocol, will seek outside investors to develop its own separately branded dot-coms.

"This is a concerted effort on our part to make the Internet a big part of our revenue in the next three to five years," said Pat Corpora, president of Rodale Books and now also managing director of Rodale Interactive. Mr. Corpora is seeking two more executives to staff the business unit--one to handle business development and the other, e-commerce.

The publisher, noted for its extensive repertoire of books and magazines on healthy-living topics including gardening, fitness and cooking, already operates more than 50 Web sites, many tied to its publications. Other Web properties include an online bookstore and Rodale's Online Health.

'LET 1,000 FLOWERS BLOOM'

Thus far, the company's online strategy has been "quite the opposite of consolidation," said Mark Edmiston, managing director, AdMedia Partners, an investment bank. "Their strategy has been to let a thousand flowers bloom--to let the operating units decide for themselves how much they wanted to invest in the Internet. It's not a long-term strategy that would work, but it's an interesting short-term strategy."

The new division will focus on developing deals with online businesses similar to those struck with PetSmart.com and Women.com Networks, in which it's an investor.

"We are trying to invest in Internet companies that our information and editorial bring value to," Mr. Corpora said.

To that end, Rodale Interactive is talking with at least six online companies about potential partnerships and will soon announce a new, exclusive partnership with health products retailer MotherNature.com, said an executive close to the company.

GENERATING VALUE, REVENUE

As part of its future partnerships with e-commerce sites, Rodale Interactive also will provide access to Rodale's editorial staff and its marketing database

"In every partnership, we will have an equity stake, which is very important. There is a lot going on in the Internet and this is one way for us to leverage our assets in a completely new medium. To us, the additional effort and cost is relatively low. It's also a way for us to generate additional value" and revenue by getting a percentage of sales generated on the sites, he said.

Rodale Interactive also is charged with creating separately branded Internet start-ups, Mr. Corpora said.

"These would be unique sites establishing new brands," he said. "We would develop the editorial concepts, the business plan and the launch [strategy], but then we'd go out and seek investors to make it big. That's a bit of a departure for Rodale, which is all self-funded."

Rodale Interactive plans to launch its first online start-up, geared toward men, in December or January.

Copyright October 1999, Crain Communications Inc.

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