Community Networks Gain Investor Attention


Community Networks Gain Investor Attention

By Tania Anderson
Staff Writer

An entrepreneur in McLean, Va., thinks she has found a way to make money on the Internet. She may be right. Her company, Women's Connection Online, has caught the eyes of investors and several hundred thousand users since last January.

The company runs a community network on the World Wide Web that has been receiving 300,000 hits per month. Now Susan DeFife, the company's founder, plans to seal deals with investors and corporate partners in the next six months to increase visibility of the network and improve the site's content.

DeFife would not elaborate on the partnerships but said she is actively talking to major Fortune 100 companies that focus on reaching the women's business market.

The company, which was formed in January 1994, will begin generating revenue in the next four months with the help of investments and partnerships. DeFife is in the process of raising a second round of financing worth $2 million. The first round, which is still being finalized, is worth $625,000.

Online community networks are sites on the Web where users with common interests can retrieve information and network with others. There are community networks, for example, for fans of mountain biking and poetry.

Pull up DeFife's Web site, ( and you'll find information on women in politics, women's health, prenuptial agreements, even how to find financing for a new business.

The site targets professional women and women business owners. Since last April, 80 percent of the network's hits have come from this group, DeFife said. The other 20 percent come from women at home or graduate students. Numbers have remained steady.

The content on the site comes from women's organizations and government agencies, including the National Institutes of Health in Bethesda, Md. She also gets information from specialty publications that allow her to reprint the information to the network.

DeFife chose women as her target audience because she said women contribute $2.3 trillion to the U.S. economy each year, and women business owners employ one in four U.S. workers.

"Women have been called the fastest-growing population on the Internet," said DeFife, who now has a staff of four. "We're real encouraged by the number of women that have come online."

DeFife, whose company is not yet turning a profit, developed several revenue models that will be implemented after she receives financing.

Her primary revenue models include advertising, a partnership with an Internet service provider and partnerships with electronic commerce providers.

Other potential advertisers, she said, include financial services companies, insurance providers, software and hardware vendors, and health and fitness companies. DeFife will be sealing a partnership in the next month with an Internet service provider to bring women online through Women's Connection Online. The network will offer special services to users that sign up with the partnering Internet service provider. For example, subscribers will have access to online conferences that would not be available to the regular users of the network.

And she plans to form partnerships with electronic commerce developers that want to target the women's market.

The company's other forms of revenue include online training and education, and Web site development and hosting.

"These are new models, based on what we know about the women's community and what we know about the Internet," said DeFife. "We think we'll be quite successful with them."

DeFife started the company three years ago as a private, subscriber-based service that ran on Prodigy's backbone. Prodigy Inc., White Plains, N.Y., is a subscriber-based content provider similar to America Online. Her objective was to fill in the gaps in online content for professional women. She realized that women were becoming more Web savvy and decided in April 1996 to transfer the service onto the Web.

When she launched her private subscription service in October 1994, only 10 percent of Internet users were women. That number has grown to 42 percent, said DeFife.

The concept of community networks is gaining momentum because users are demanding information that is more valuable than what has been traditionally offered on the Web and offers a networking forum for people of common interests, said Peter Krasilovesky, vice president of Arlen Communications, a market research firm in Bethesda, Md.

Rhonda Abrams may be proof of a successful online community network. She is "chef" and president of Palo Alto, Calif.-based Idea Cafe: The Small Business Channel. The Web site provides information, advice, resources and a networking forum for small-business owners.

Abrams, who writes a syndicated column on the small-business world, launched the advertising driven site in August 1995. She said the company started to generate revenues earlier this year.

Abrams said a successful Web site is one that draws users back to it over and over again rather than receiving a one-time hit. "That's the future of the Web," Abrams said.

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