SRDS faces competition from tiny online startups

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Two industry upstarts are hoping to carve a niche delivering Web-based media information to ad agencies, invading the turf that has long been dominated by the telephone book-sized directories of data published by SRDS.

Since July, Ed Innes, president of a tiny Fargo, N.D., Internet database company called Hyper Corp., has marketed Let's Do Lunch, an online database for consumer and business magazine ad rate information. His two-person staff and several college interns have been inputting magazine media kits to create a searchable, hyperlinked database of 1,000 magazines.


He's not alone. Eight months ago, William Duke, a publishing industry veteran who has worked at Hearst Magazines and Scientific American, launched Magazinedata, a New York-based company that designs electronic media kits on the Web for clients that include Worth, Money, BusinessWeek and Forbes. He is also offering an online media kit directory providing data for more than 230 magazines, many with e-mail links to magazines.

This is not the first time SRDS has faced electronic competition. Electronic Data Systems tried to offer media kits via CD-ROMs last year in competition with SRDS, but both projects were scrapped as unprofitable. "Getting the data is the easy part," said Edward Padin, VP-marketing at SRDS. "Keeping it fresh is a lot tougher, but it is really the most important part of the business."

The two-year-old Web site in October added its own Web-based media press kit service, known as E-Kit.

Early next year SRDS will begin beta tests for SRDS Direct Net, a $15,000 per year subscription service that will offer direct marketing list brokers information on mailing lists.


The upstart rivals have fashioned slightly different business models in their quest for success. Mr. Duke at Magazinedata charges magazines $3,000 to develop their Web-based media kits and then charges advertisers an additional $200 to run banners on his home page for six months.

"Right now most of our income is coming from developing the media kits,'' he said, "but we expect that will change." He estimates his one-man operation, plus several commission-only ad reps, will be profitable in its first year with revenues of $90,000.


This January, Hyper's Mr. Innes will begin charging $150 for an annual subscription to the site.

The database contains 1,000 magazines, and Mr. Innes' crew is adding 100 new titles per week.

While industry observers think that SRDS may have slowed down its development on the Web as it went through an acquisition by Dutch-based media giant VNU, Mr. Padin insists it is now moving ahead with Web expansion plans.

"It's probably not a five-year project, but it may be a one- or two-year project," said Mr. Padin.

"They [SRDS] own share of mind, but that's all they own," Mr. Innes said of his giant competitor. "We have them scared to death."

Contributing: Debra Aho Williamson.

Copyright December 1996, Crain Communications Inc.

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