Active.com
Founded:
1998
Employees:
106, including 81 in San Diego
Revenues:
$1.2 million last year; estimated $8 million to $10 million in 2001
Headquarters:
1020 Prospect Street, La Jolla
President, CEO:
David Alberga
Business:
Online registration service for athletic events and recreation leagues, and provider of data management software to municipal parks and recreation departments
Last year, when Internet companies were dropping faster than the tech stock market, the people at Active.com were busy expanding their business operations, making key acquisitions that are beginning to pay big dividends.
Today, the 3-year-old dot-com that began as an online registration service for marathons and 10K races has expanded both its markets and business lines.
It’s still doing online registrations for such events like the Suzuki Rock and Roll Marathon in San Diego, but it’s also handling registrations for amateur sports leagues, for continuing education classes offered by cities and community colleges, and the sale of specialized software used by municipal parks and recreational departments.
“It’s all about acquiring access to participants,” said Active.com CEO David Alberga.
Active.com’s core online registration business entails getting a portion of fees collected in the thousands of endurance events that use the Internet to sign up participants, including some of the largest in the world such as San Francisco’s Bay to Breakers and Spokane’s Lilac Bloomsday 12K run. Each of those attracts more than 55,000 runners.
It also collects a percentage of online registrations from participants in amateur sports leagues such as youth and adult basketball, baseball and softball.
The latter market is huge and growing larger daily. According to data from industry sports groups and trade associations it stands at more than 115 million citizens who spend more than $18 billion annually, said Active.com spokeswoman Shelly Burnside.
The company also handles online registration for thousands of parks and recreation departments that use the management software it provides.
In addition, Active.com generates some 50 million page views per month, making it one of the more popular sports sites on the Web.
“We’re in the top 10 sports sites on the Internet, but we’re the only one that has anything to do with the sports that people do,” said Alberga, who has degrees from the U.S. Military Academy at West Point and Stanford University.
All this helped propel Active.com’s revenues from about $1.2 million last year to an estimated $8 million to $10 million this year. By next year, the company should double that figure, Alberga said.
More importantly, Active.com should break into the black, something many surviving Internet-related businesses can only dream about.
The achievement didn’t come without some pain. Over the course of about a year, the company cut its staff in half from about 200 employees in 1999 to 106 today. About 81 employees are at its La Jolla headquarters, while it maintains 25 at a Sacramento office.
Alberga said if the cuts weren’t made, Active might be inactive today.
“A lot of companies in this space assumed the money was always going to keep flowing,” he said. “We saw the markets going south and made adjustments immediately.”
Perhaps the most telling evidence of Active.com’s distinction as a successful Internet company was its ability to attract new capital at a time when investors were fleeing anything related to the Internet.
Last November, it obtained $21 million in a second round of financing led by ABS Ventures, the venture capital affiliate of investment banker Deutsche Bank Alex Brown, and included several original investors, such as San Diego’s Enterprise Partners. Combined with earlier VC rounds, Active has about $52 million in outside capital investment.
Peter Krasilovsky, an independent analyst for the e-commerce industry based in Virginia, said Active.com stands out from many other dot-coms.
“Their execution has been much better than most companies I follow,” Krasilovsky said. “I think the company has stuck to its knitting and has been pretty imaginative in creating new synergies and partnerships.”
Officially founded in late 1998, Active.com was the result of a merger between two similar online businesses, RaceGate.com in La Jolla, and Miami-based ActiveUSA. It was a classic joining of forces, said Alberga, who has been the CEO for about two years.
“They both realized they were fighting over the same marketplace,” he said.
Shortly after, the new firm called Active. com decided to diversify its business. Late last year, the company acquired two other California-based companies operating in the Internet arena. In October, it bought Sierra Digital Inc., a Sacramento firm that makes software used by parks and recreation departments to manage facilities and other operations. When the firm was acquired it had about $3 million in sales.
Last December, Active.com purchased eteamz.com, a Los Angeles-based Internet company that hosts Web sites for amateur sports teams. The firm provides teams with the tools to build customized sites giving scores and other information on the team and players.
Alberga said eteamz.com, now a division of Active.com, is growing at an average of some 1,000 teams a day and hosts sites for more than 650,000 teams hailing from all 50 states and several foreign countries.
Along with the tools to create community bulletin boards for the teams, Active.com provides teams with online registration capability. When league participants use the service, Active.com collects an average 6.5 percent of the registration fee plus 50 cents per transaction.
If the experience of one youth basketball league is any gauge, Active.com should have little trouble attracting new online business.
Russ Miller, president of Amherst Youth Basketball in western New York state, said the service has been “absolutely spectacular.”
The league used Active.com’s online registration to sign up players and teams for the first time this year, getting about 80 percent of the total registrations thus far.
“It’s done exactly what we wanted it to do, which is make life easier for parents to take care of things at a time that’s convenient for them,” Miller said.
Helping induce people to use the service is a fee that’s $10 cheaper than signing up in person or by mail. The lower fees collected by the league is worth it, Miller said.
Not only is the information on the registered players accurate, the data is easily downloaded to spread sheets and eliminates the cost of check processing.
“It’s saved significant time and effort on our end, and I haven’t heard any complaints about it,” Miller said.
The experience was similar for the Eau Claire, Wis., Parks and Recreation Department, which also used Active.com’s product for the first time.
“It’s been great. We’ve had 170 Internet registrations so far, and people seem to have responded to it very well,” said Cindy Gillette, a secretary for the department, which offers several hundred different sports and hobby classes.
Alberga and his team see good things for Active.com’s future as the firm solidifies its dominance of an ever-expanding market in sports-related online registrations.
“At one time we counted maybe 30 competitors and now there are only a handful,” he said.
While today only a small percentage of all event registrations are conducted via the Internet, the fact is that the percentage is increasing rapidly and should continue as more users realize the convenience, Alberga said.
“This isn’t about market share. I think we’ve just scratched the surface as far as online registration is concerned,” he said. “This is much more about executing. We spend our time talking about winning events one at a time, winning teams and leagues one at time, and rolling out our online registration software for parks and recreation departments one at a time.”
