An old-line publisher morphs into an on-line star, discovering brand-new revenue sources in the process.
The Fourth Annual Inc Web Awards: Transformations
Company: Edmunds.com, in Santa Monica, Calif. URL:www.edmunds.com What we liked: A slow-growing 30-year-old publisher embraces the Web's real-time advantage and becomes a leading site for automotive information
The folks at Edmunds.com admit that their early Internet goals were, to put it mildly, off course.
In the mid 1990s, Edmund Publications viewed the Internet as just another place to promote its respected auto-buying guides. Today the Web drives the entire business. Meanwhile, its print line appears headed the way of the minivan: still available, still reliable, but no longer a consumer favorite or a company priority. "The books are a nice part of our heritage," says company president Jeremy P. Anwyl. "But they're not a major focus." In fact, books now account for less than 1% of the company's revenues.
The 1999 name change -- from Edmund Publications Corp. to Edmunds.com -- says it all. Like the venerable guidebooks, one for used cars and one for new cars, the Edmunds Web site offers a wealth of independent ratings, reviews, and pricing data for every make and model. But the two books -- which average 450 pages -- are published annually; Edmunds.com, with 800,000 pages, gets daily updates. The site also brims with interactive features: a tool for comparing up to eight vehicles side by side; a 500,000-member consumer forum; a searchable database of dealers; and calculators for estimating actual sale prices, ownership costs, and loan rates.
And the information on Edmunds.com is free. That's because the $50-million company makes its money primarily through ads placed by manufacturers and parts dealers, as well as through car-stereo retailers, insurance companies, commercial lenders, and other auto-related businesses. The books, by contrast, bring in only their cover price.
Founded in New York in 1966, Edmund Publications chugged along for 22 years, selling its guides to consumers, libraries, and credit unions. It was consistently profitable but never grew much. In 1988 the then-three-person company was sold to Peter Steinlauf. Shortly afterward the changes began.
Steinlauf kept the company name but moved it to car-happy California to explore new publishing options. First up was a CD-ROM, but the product proved short-lived. Then, in 1994, Steinlauf tried offering car- pricing data on demand through a pre-Web, text-only "gopher" site called the Electronic Newsstand. The service included invoice prices, which showed what dealers pay manufacturers for specific cars. At the time, that was tough-to-find information that could be a powerful negotiating lever. As word of the free listings spread by E-mail, car-pricing requests so overwhelmed the Electronic Newsstand that its owners told Edmund Publications to hit the road.
The company did so, launching its own Web site. Despite their earlier brush with Internet popularity, executives at first viewed the site as a way for consumers to sample Edmund Publications' print products. But they soon spotted lucrative opportunities, including steering likely customers to sales sites like AutoWeb and Autobytel and taking a bounty for every lead. Best of all, the company's pricing information -- always months out of date in the printed guides by the time they reached bookstores -- could be kept current.
AUTO FOCUS: Jeremy Anwyl leads Edmunds's transition from a slow-growth print publisher to a Web dynamo with many revenue streams and a reputation as the go-to guys for car buyers.
Initially, Edmunds collected data from several auto-industry research companies and then published it under the Edmunds.com brand. But growing demand for a steady stream of reliable, near-real-time information meant the company had to begin generating its own data. So in 2001 it launched a data-digging division, Edmunds Data Services, to compile all Edmunds.com content. (The division also sells and licenses its information to other companies, including competing Web sites.) Most of the data -- on pricing, specifications, and options -- comes directly from manufacturers, who provide it free. Company president Anwyl says that getting price information, in particular, was a coup because carmakers had shielded such data for decades. Edmunds.com got them to relent by convincing them that informed consumers are quicker to buy. "When they're comfortable, they make decisions faster," Anwyl says.
Today Edmunds.com employs 180 people. A new service, Edmunds2Go, lets consumers access much of the data through wireless devices like cell phones and personal digital assistants. And although Edmunds.com is pitted against some big names -- MSN CarPoint and Kelley Blue Book, among them -- it's zipping along nicely, collecting Web awards from the Wall Street Journal, Money, and J.D. Powers & Associates, among others.