By Allan Maurer
ATLANTA, GA–Jeff Arnold, CEO and chair of HowStuffWorks (HSW) and its parent company, The Convex Group, opened the Arizona Republic newspaper this week while traveling. In an article on ice cubes, he saw a reference to HowStuffWorks.com entry on the subject. It demonstrated just how pervasive a resource the Web site, which just raised $75 million, has become.
Arnold, speaking to TechJournal South while on the road, discussed the big $75 million raise the HSW to be announced Thursday, Atlanta’s growth, and the future of his companies.
The Atlanta-based serial entrepreneur remembers the hot-headed days of the Internet boom when “a lot of bad ideas got funded that muddied up the market.” The advertising that supports many current Web sites, also “was not there yet,” Arnold says.
Now, however, “Really good things are going on,” he says, both at HowStuffWorks and in its headquarters city of Atlanta.
HowStuffWorks plans to blast its already impressive Web site encyclopedia of what makes things tick to an even more comprehensive and universal level with the new funds. The company plans to invest the money in content, says Arnold. A TV show may be in the works soon because numerous media companies have expressed interest.
Atlanta a great spot
Arnold sees a resurgence in Atlanta as a tech hub and in the Internet as a business. “The Internet has come all the way back,” he says. “And Atlanta is getting good momentum again.”
Atlanta has grown so much that when Arnold goes to Los Angeles, he hears complaints about Atlanta traffic. “You know it’s bad when people in LA are talking about Atlanta traffic,” he says.
On the other hand, Arnold says, “Atlanta is a great spot. You can pull a lot of talent from the Research Triangle, Nashville, the University of Florida, Emory, Georgia Tech. It’s a hotbed for recruiting.”
Arnold’s Convex Group bought HowStuffWorks in 2003 and since, he says, “We really take it seriously. It takes a commitment, the whole editorial process, how you update it, how you make sure it’s accurate. Making sure you have quality, unbiased content.”
Patience worked
That’s easy to say now, but back in 2003, “The whole Internet was crashing. We’ve been patient and kept investing. Marshall (Brain, founder of the company) had done such a nice job.”
Patience paid off. But then, Arnold, formerly CEO of WebMD, had a solid understanding of quality content. “Health information is critical,” he says. “There’s no room for error. It has to be 100 percent accurate.”
So when Convex bought HowStuffWorks, “Our whole focus was quality,” says Arnold.
That paid off, as media outlets and people searching the Web more and more found themselves using and quoting HowStuffWorks.com universally. “People are searching for the same things on Google in India, China, Brazil and the U.S.,” Arnold notes, whether it’s HDTV, cell phones, or wireless connections information.
That, says Arnold, is a boon to selling advertising on HSW. “More and more people go to the Web before they buy a product or service,” he says. “Whether it’s a new basketball goal or life insurance, at the end of the day, companies need content around their product or service. That’s exciting because you can do business with anybody. Every company, no matter what they sell, needs a content strategy.”
It’s especially important, he notes, that the content be unbiased. If it’s on a company site, a certain bias is assumed and no one really pays all that much attention to it. So it’s natural for a company that wants to promote a product or service to advertise next to the unbiased report on the HowStuffWorks site, he says.
In addition to the private company’s domestic raise this week, its public subsidiary, HowStuffWorks International teamed with INTAC International Inc. (NASDAQ:INTN) to invest $50 million in a Chinese publishing venture.
And the market is limitless. “When we think about content to develop, it’s endless,” says Arnold.
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