By Allan Maurer
UPDATED ATLANTA, GA—HowStuffWorks Inc., has raised $75 million in private equity from Capital Research & Management and Chilton Investment Co., it plans to announce Thursday, a company spokesperson says.
The company, founded by North Carolina University professor Marshall Brain in 1998, was purchased by the Convex Group in 2003. Brain remains a company “expert.”
Well-known Atlanta dot com entrepreneur Jeff Arnold, a founder and former CEO of WebMD Inc., is chairman, CEO and part owner of the company. Arnold tells TechJournal South that it plans to expand its content with the new funds.
A skyscraper of content
“We’re building a skyscraper of unbiased, universal content,” Arnold says. He notes the site recently hit a milestone of 10 million unique users. “That’s amazing because we spent no money on marketing,” Arnold says.
In addition to online guides to how just about everything from car engines to cell phones and stem cells work, the company also publishes Consumer Guide and Mobil Travel Guides online through a partnership with Publications International Ltd.
Arnold points out that the number one reason people go online is for information. Often, the information they seek is universal. An explanation of how a hybrid car works is as valid in Brazil or China as in the United States.
While the site covers many serious topics such as avian flu, it also explains “How Pirates work on the big screen and the high seas,” and “How Superman works,” and “How the Batmobile works,” when blockbuster films such as “Pirates of the Caribbean,” “Superman Returns,” and “Batman Begins,” are released.
Arnold runs The Convex Group, which acquires and integrates various entertainment and distribution assets to create new media enterprises.
In addition to HowStuffWorks, The Convex Group owns LidRock, which sells CDs and DVDs attached to the lids of fountain drinks and Flexplay, a patented, self-destructing DVD for no-return rentals.
Flexplay, Arnold says, recently raised a new $5 million round and offers a blank DVD for downloading movies that “disappear after five days.” That, he notes, means consumers can buy them for $2 instead of $12.
LidRock has changed its model from promoting outside product to DVDs that drive people to the HowStuffWorks Web site. “Fast food outlets are taking a lot of heat for promoting child obesity,” he says. “So we might take an instructional sports video from a player on the Atlanta Hawks on how to play basketball to help kids get off the couch and start exercising.”
Last year HowStuffWorks International (not HSW domestic, which did the current raise) teamed with INTAC International Inc. (NASDAQ:INTN) to invest $50 million to create a Web publishing venture in China.
Launching video service
The company is also launching an educational video service and hired Atlanta-based ViTrue to provide the necessary technology for uploading the videos.
The company says thousands of videos from sources such as Sony Electronics and Georgia Tech Research Institute will be posted. It has an exclusive partnership with “how-to” video provider TotalVid. It will add over 200 instructional videos on topics such as “How to play guitar,” and “How to prepare for a tornado,” which will accompany relevant articles on the site.
Look for our exclusive interviews with Jeff Arnold and Marshall Brain of HowStuffWorks Wednesday.
For more information see: www.howstuffworks.com
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