Inform provides media websites with a technology solution that automatically searches, organizes and links content to provide the site with depth with the aim to win and retain more readers. The easy-to-implement technology automatically creates links to relevant information on the site, in archives and anywhere on the web, to create a more detailed reading experience for the viewer.
The more time a reader spends on the site, the more pages he views, thereby increasing the revenue opportunities and ad impressions. Publishers of these sites are able to enhance their brands as a result of using Inform and in turn able to position themselves against competition.
Founded in 2004 by Neal Goodman, Inform is based in New York and India. It has around 70 employees some of who are mathematicians, linguists, programmers, taxonomists and library scientists. In February 2006, Inform received $10 million in a series B round from Stephens Group, an Arkansas based group with a stronghold in the media industry. They were joined by the GFI Company as well as Roger Hertog, Chairman of The New Republic, with traditional VCs completely absent. An early portion of the financing for Inform came from the sale proceeds from Neal’s Capital IQ, pegging the total amount of funding at approximately $15 million.
The company targets publishers and information providers whose aim is to maximize the value of their content. Some of their bigger clients are The Washington Post, The New York Sun, CNN, CondeNast and others. They now also target smaller clients (like blogs), with a smaller budget, by offering a simpler model. Their main competitors are enterprise search companies like FAST and Convera or widget-based offerings like Pluck, Daylife and Sphere.
Inform uses two business models – one is a fixed recurrent fee that has a consistent revenue stream. The other is a revenue-share, ad-based model which is more in line with the lighter implementation of their products. 90% of their revenues come from the fee-for-service model.
In an interview series I did with Jim Satloff, CEO of Inform, we discussed their future prospects in detail. Revenues last year, were in the range of $2 million, with companies like The Washington Post paying between $2,500 to $40,000 per month. According to Jim, within a short period, the company’s revenues have grown rapidly and are expected to grow at a faster pace with the introduction of the newer, lighter models.
They currently have over 40 clients and multi-millions of dollars in annualized contract value. When asked about the likelihood of an acquisition, Jim said they were more interested in the possibility of growing Inform into ‘an independent, highly profitable company’.
Inform and its competitors offer an interesting service that can increase the number of pages of content offered by any media company by a good 30-50% by dynamically packaging the archives and related web content from all over the web, thereby making it a rather useful value proposition. I know from experience that today I am doing all of this “packaging” manually, and it is very time consuming.
Thus, I suspect, if the hundreds of thousands of serious bloggers out there were offered the service at a reasonable price-point, Inform would get a good response. That price-point is more like a few hundred dollars a month, not a few thousand.
Of course, there is a question about whether the technology has reached a level of automation that makes it scalable across thousands of customers. For example, I may want to index my content and package it in a certain way, while Om or Kara may want to do so differently. Inform doesn’t yet offer such a possibility, but if there is another service that does, I would be very interested in knowing about it.
This segment is a part in the series : Deal Radar 2008