Once the domain of testosterone cowboys the Web becomes more mainstream
daily. Surprising then that few companies focus on half the Internet's
current user base: women/females.
Namely two companies. Two. Amazing.
In two words I can count the dose of estrogen-enhanced Internet on Wall
Street: iVillage and the soon to go public Women.com. The latter wants to
go public this week at a just-reduced price per share of $8 - 10. That
values each of its unique monthly users at $88 vs. the already-public
iVillage (IVIL) value per user of $158. The table:
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Women on Web/Wall Street
monthly users market value per user
iVillage 5.02 $792.00 $157.80
Women.com 4.62 $406.40 $87.91
note: Women.com is IPO market cap target; in millions except per user
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But that's not the whole story. iVillage results lead Women.com by about a
2-to-1 ratio. IVIL posted $15 million revenue for 1998 vs. $ Women.com's
$7.2 million. For the first six months of this year iVillage had $14.6
million revenue, already matching all of last year's top line.
Women.com, meanwhile, posted $9.7 million for the first six months of 1999.
But let's do some "all things being equal math" and see that if we took the
revenue on a comparison basis as a proxy for valuation then Women.com could
be properly valued at $104 per user or $481 million.
That assumes the Street sees the "real" value of either companies, which I
don't think it does. First of all with the scarcity of female-centric
Internet experiences I think the underserved demographic desperately seeks
affinity sites to surf to, buy from, and other likeminded people to
communicate with.
My own valuation on iVillage says that the world's leading women Web firm
should command a premium and a meaningful valuation. The overall top 10 Web
sites enjoy a wide array of values per unique user on a general purpose basis.
And those are mostly browsers not buyers.
Investors forget the shopping litmus rule. Translated it's that 80% or so
of all buying is done by women. Walk through any mall and see which items
are displayed first in any department store: women's clothes, women's
shoes, women's jewelry. No accident. Women are the buyers.
So a user of iVillage and Women.com ought to be worth more than a straggler
on a general purpose Web portal. The lifetime value of a e-shopper is
probably $250/year. That's 8 items bought per annum. $30 bucks per item or so.
Makes sense.
On that alone I believe that as both iVillage and Women.com "ecommerce-ize"
their content networks the value could become apparent. True that most
revenue today is derived from ads. That's also a great revenue flow for
bulk sites like these two.
Anyway, longer term a $250 valuation per unique user to me is a benchmark,
a 1x future shopper flow stream discounted into the equation.
On a present value basis I would bring it to a minimum of $175 for IVIL and
give Women.com the benefit of being a close #2. Indeed, Media Metrix
reports iVillage ranked 28th in the world and Women.com ranked 29th. In the
world. That's ALL Web sites globally.
With 150 million global users that's 75 million women surfing for a home to
call their own, with a weighting to the U.S. now in users overall.
The key for both these companies will be strong global media partners which
they both have. Women.com has Disney and Hearst. But more than partners it
will need to think in different cultures and languages. English is the
lingua Web now but Japanese, Swedish, German, French, Chinese, Portugese
grow in usage daily.
As Women.com makes it expected debut this week few may understand the
focus, the scarcity of these stocks on Wall Street or realize the value of
reaching one of the world's most powerful demographics.
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