February 02, 2000
For Bruce Twickler, life in the software business has been nothing if not a constant exercise in adaptability.
The founder, president and chief executive officer of Andover.Net (ANDN), the Acton, Mass.-based provider of news and information services for the open-source software community, started out as a MIT-trained electrical engineer. Like many of his generation, he passed up the lucrative, albeit mundane world of copper and silicon for a more exciting life on the 1980s software frontier.
Twickler and his colleagues attempted five hit-and-miss efforts before hitting their groove in 1992 with the launch of Andover Advanced Technologies, a software publishing company dedicated to helping small-scale developers get their products to market without kowtowing to the Eggheads and CompuWares of the retail world.
That is, until 1994, or The Year Everything Changed.
Although Twickler wasn't the first CEO to watch his company's market dwindle to zero as computer users switched from buying software off the shelf to downloading it off the Web, he was one of the few lucky enough to realize that the new fangled Internet did little to change the underlying fundamentals of the software industry.
"Even in the old software industry, shipping software out into the retail channel was merely a form of customer acquisition," Twickler recalls. "You had to do between 25,000 to 30,000 units before you made a decent profit, and even then, the real money source was the upgrades and services. The Internet simply made it easier to get those customers."
Buoyed by that insight, Twickler and his Andover colleagues eventually repositioned their company. By 1997, Andover Advanced Technologies had changed its name to Andover.Net and built up a slew of technical sites such as DaveCentral -- for developer tools -- and Slaughterhouse -- for Windows software -- along with metric sites such as Internet Traffic Report to draw in readers and help the company switch to an advertising-based revenue stream.
Jump cut to 1999. With Linux mania in full swing, Twickler senses another industry shift and decides to get out in front of the crowd. In June 1999, Andover.Net purchases Slashdot.org, the closest thing to an online town hall for the burgeoning open-source community. Two month later, the company purchases Freshmeat, a site catering to leading edge open-source developers.
Using the momentum from these purchases, Andover.Net files for an IPO in the fall, and sees its shares jump more than 250 percent on its Dec. 8 opener.
Looking back at the mad rush of events over the last seven months, Twickler laughs at the suggestion that his company might be making things up as it goes along.
"What we like to think we're doing is building a 21st century software company," Twickler says. "If you are going to design a 21st century software company, what would you do? The first step is to get something dominant."
"Getting something dominant" is Twickler-speak for finding the sites with enough traffic, soldering those sites into the pre-existing infrastructure and using them as a primary power source to pump current through the rest of the Andover.Net circuitry.
With the Freshmeat and Slashdot acquisitions, Twickler estimates that 51 percent of all Linux-related traffic over the Web currently courses through Andover.Net. The purchases also helped boost company-wide traffic to over 50 million page views per month.
So far, those page views have yet to translate into profits. Last week, Andover.Net reported a 103 percent year-to-year increase in fourth-quarter revenues, bringing in a total of $2.1 million in 1999 versus $1 million in 1998. Because of the costs associated with the recent acquisitions, however, Andover.Net posted a steep net loss of $15.7 million, or $1.58 a share, compared to just $3.2 million in the fourth quarter of 1998.
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