BabyCenterService Industry

Craig Lizotte

Mission StatementMission Statement

To build the most complete resource on the internet for new and expectant parents-a resource that would improve parents’ confidence and make their lives easier.

History October 1996 Matt Glickman and Mark Selcow, who

went to Stanford Graduate School of Business together left their corporate jobs to raise money.

Established headquarters November 1997 in San Francisco with 25 employees.

Online store was launched in October 1998 and had 55 employees.

April 1999 eToys made an offer to join with BabyCenter.

2007 Web Marketing Association awarded BabyCenter with the Webby Award for outstanding achievement in website development.

Management team

Matt Glickman – CEO and co-founder

Mark Selcow – President and co-founder

Primary Stakeholders

Affiliates Community members Competing companies

Goal and Strategy

To provide guidance to new and expectant parents.

Focus was on preconception to 2 years, which allowed the company to address topics such as: Fertility Labor Childcare Financial planning for education

Goal and StrategyGoal and Strategy To create a strong brand name. To gain credibility, they hired a staff of medical

experts, obstetricians and pediatricians to advise, contribute and verify content.

They hired staff from respected magazines such as Parenting, Parents and Health.

Personalization was BabyCenter’s main strategy because, parents had different concerns at different stages of pregnancy and development.

Kids are the most important thing in a parents life so they will spend money to ensure proper development.

Industry & Market Discussion

Significant market opportunity. 4 millions babies born in the U.S.

every year. An average of $7,100 is spent the

babies 1st year.

Market and Industry

1998 U.S. baby product market for newborns to age 2 was $18 billion. $5.6 for apparel $5.5 for baby care $3.5 for nursery and furniture $1.0 for toys $2.3 for food

Market and Industry

April 1999 BabyCenter was the largest information source for expectant parents. 10 million pages views monthly 400,000 monthly newsletters sent 560,000 users 180,000 registered users 1 million e-mails a month

International Market New markets were available for

penetration. BabyCenter wanted to create a powerful

global brand to make it the leading brand of choice for parents around the world, but it involved major risks.

Speed was also a major factor in capturing the market. This could move all their focus on the expansion and ignore their customers to dilute their brand name.

E-zones

There were three geographic regions called E-zones.

Germany E-zone U.K E-zone Asia E-zone Governmental agencies could shut

them down if it threatened a segment in their national economy.

German E-zone

Germany Austria Switzerland Benelux

U.K E-zone

U.K. Ireland Scandinavia

Asia E-zone

JapanJapan ChinaChina TaiwanTaiwan AustraliaAustralia

Demographics

In 1998, 83% of internet users used the internet to gather information and 43% of users gathered health information.

46% of internet users were women and was the fastest growing group of internet users.

Women account for 70% of retail sales. 35% of new parents were connected to

the internet vs. 25% of the general population.

Creating Value

New parents were busy. Online stores made it convenient for them and saved time.

Discreet information during early pregnancy.

Online Community

Blogs Bulletin board Chat Targeted Newsletters of what to expect

during certain stages of pregnancy. Not only could parents talk to experts,

they could talk to other people who are going through similar experiences.

Previously Identified eCommerce Opportunities

Service company that offered online content.

Target by stages of pregnancy. Preconception Pregnancy Baby Toddler

DSIR

Online content attracts users and engages them.

The larger the community the more information available.

The bigger the chat rooms and forums.

Competitive Risks

Brick and Motar stores. Babies“R”Us which had 118 stores.

$4.8 billion market capitalization on April 15, 1999.

100 competitors in the online market. Most of these were home based business

and had a weak infrastructure. Glickman was concerned with iVillage and

Babies“R”Us.

iVillage April 1999 was the most visited women portal. Targeted women from the 25-54. Consisted of 14 channels including: family, health,

work, money, food, relationships, shopping, travel, pets, and astrology.

2 million users and 102 million pages views a month at the end of second quarter of June 1999.

Market capitalization of $2.5 billion by April 15, 1999.

ParentSoup ParentsPlace Ibaby/iMaterinity

Online Baby Content

According to iVillage, ParentSoup is a branded online community similar to BabyCenter.

Family.com Yahoo.com

Commerce vs. Content

Online Baby Retail

iBaby.com BabyBag.com Wal-Mart

Offline Baby ContentOffline Baby Content

Parenting magazine

Offline Baby Retail

Babies“R”Us Wal-mart Target BabyGap

Missed Opportunities

Brick and motor store Merging with eToys Affiliated with eToys

Dilemma

Should BabyCenter merge with eToys. Would it destroy the brand name by

commercialization. Both companies were different. BabyCenter

was content and eToys was commerce. BabyCenter wanted to go IPO which they

talk about with Yahoo, Amazon, NBC, CBS and Disney.

eToys was scheduled to go IPO within weeks.

Dilemma

Some online content sites were forming alliances with commerce sites.

e-Toys could have been affiliated for baby center which, they could have focused on their services and develop a strong brand.

They decided not to merge since Glickman believed BabyCenter could survive on its own.