Intense. Ask anyone to describe iVillage chief executive Candice Carpenter, and they'll use that word in the first sentence. Some say it with admiration, some with dread. But they all say it.
"There's a bit of fear of her in the company," says one executive close to the company. "But there's security, too, because you know she'll do whatever it takes to move the company forward."
Even at play, Carpenter is fierce. Last summer, she threw a party for a handful of her staff. At one point, according to a co-worker, the obsessively athletic Carpenter decided to take her guests for a bike ride.
After they saddled up, Carpenter shot off on what turned into a 30-mile thigh-burning odyssey. Her wheezing staffers peddled desperately to keep their CEO, and her respect, from disappearing over the horizon.
Carpenter will need all that energy and drive to make iVillage, a network of Web sites aimed at women, into the billion-dollar company she insists it will be. Even though iVillage, based in Manhattan, has accumulated US$65 million in losses -- with no profit in sight for years -- venture capitalists are in love with Carpenter. Institutional investors also are moonstruck with the prospect of an iVillage initial public offering later this month, underwritten by Goldman Sachs. The Goldman name alone guarantees a big pop on IPO day.
"Right off, you know the business model is probably sound, and the management team is solid," says Paul Cook, portfolio manager at the Munder Net/Net fund, which manages about $400 million.
Still, Carpenter's ambition has cost iVillage a lot -- in money and human terms. Some question how long Carpenter can justify burning through $40 million in cash a year, without any sign of return on investment. And her hard-charging style has burned out platoons of iVillage employees.
"The pace and the pressure helped turned me into a better entrepreneur, but it's not for everybody," says Robert Levitan, an iVillage co-founder who left in January to start another company.
A Portal to Women's Pocketbooks
In the real world, women buy most of the stuff that's bought -- about 70 percent. As the Web moves into the mainstream, women will probably do most of the shopping there too. The potential market is enormous.
IVillage's aim is to siphon off much of those purchases. In the short term, it plans to spend its cash on a massive marketing campaign to get its brand known and to draw visitors to its site, stealing a page from Amazon.com's book. Because iVillage reaches a desirable demographic, it can charge advertisers a hefty premium for ad banners and sponsorships. In the long run, it will set up its own online shops and make money from e-commerce.
When iVillage launched in 1995, women made up just 20 percent of the Web audience. Since then, the female audience has more than doubled, and women account for as much as 50 percent of all Web purchases -- more than 60 percent in categories like apparel.
To win women's allegiance, iVillage has built a network of 12 sites dedicated to everything from parenting to finance.
While other sites, like Women.com, spend a lot of money on articles for their sites, iVillage focuses on community and interaction, with guest experts and hundreds of volunteer moderators stimulating discussion in myriad interest areas. The network also includes an online baby store, iBaby.
Analysts give the site kudos and offer much of the credit to iVillage co-founder and editor Nancy Evans. Before iVillage, Evans was president of Doubleday and creator of Family Life magazine.
"Nancy Evans is among the best out there," says Forrester's Delhagen.
Compelling site or not, the Web isn't a field of dreams. "They" won't come just because you build it. It takes a massive marketing blitz to drive readers to a new Web site.
Carpenter knows it. During the past three years, she has cracked the company coffers wide open to get the iVillage brand in front of eyeballs, lining up pricey distribution deals with AOL, Lycos, Yahoo, and Snap, among others. Along the way, she helped redefine the term "burn rate."
Through the first nine months of 1998, iVillage spent more than $42 million against revenues of just $9 million. Through its first three years, iVillage has lost a jaw-dropping $65 million.
Co-founder Levitan says some iVillage executives -- not him -- were wringing their hands over the mounting losses. "Other people are more timid, maybe more realistic. But Candice will say, 'Do whatever you need to do to meet that goal.'"
Competitors Catch Up
It's too bad that somebody else registered Amazon for a commerce site. It would have suited Carpenter better.
"She'll call you at midnight if she has a brainstorm or a question, or if she needs something from you," says a former iVillage executive. "She's thinking and working all the time."
At 46, the Harvard MBA has had stints at American Express, Time Life's video and television unit, America Online, and served as president of Q2, Barry Diller's now-defunct upscale shopping channel. Perhaps it was inevitable that a woman with savvy in content, merchandising, and e-commerce would head iVillage.
She's parlayed her experience into an alliance with America Online, a partnership with NBC, and distribution agreements with all the major portals. By the time iVillage filed for its IPO in December, it was the top women's site, drawing 80 million page views a month. Having the No. 1 spot automatically means billions in market value.
But iVillage's lead was tenuous. In late January, the second and third-biggest women's sites -- Women.com and Hearst Corp's HomeArts.com, respectively -- merged into a site that eclipses iVillage in traffic.
Meanwhile, Geraldine Laybourne, former chief of cable television operations at Walt Disney and ABC, and a close friend of AOL president Bob Pittman, has launched a women's network of her own. Last September, Laybourne, who developed Nickelodeon, announced she would launch Oxygen Media, a hybrid cable-TV and Web network that would compete directly with iVillage.
Worse yet, Laybourne would be actively supported by AOL, iVillage's original investor, and the biggest funnel of traffic to the iVillage sites. In exchange for an equity stake in Laybourne's new venture, AOL sold her three women-centric Web sites -- Thrive, Moms Online, and Electra. The three sites together get about 60 million page views a month.
When the deal was first announced, "there was a gasp" in iVillage's office, one executive recalls. "It was sort of like, 'There's a giant coming, what do we do?'"
In its IPO prospectus, iVillage explicitly states that its relationship with AOL is very important. Under the heading "Our dependence on AOL," the prospectus reads, "If carriage of our channels on AOL is discontinued, our business, results of operations and financial condition would be materially adversely affected."
The contract is up for re-negotiation this month.
Could AOL be shifting its allegiance from Carpenter to Laybourne? A company spokeswoman downplays that scenario.
"From time to time, we will invest in content companies that we believe provide good programming for our users," says AOL's Pam McGraw. "IVillage offers a strong programming set for our customers, and so does Oxygen, and so does Women.com."
Carpenter declined to be interviewed through a spokesman, who cited restrictions before an IPO.
Even if iVillage maintains its AOL relationship, it no longer offers a competitive advantage.
Oxygen's threat to iVillage reaches beyond AOL. Laybourne could have a marketing advantage because she can promote her Web sites through the sister TV network. She has already lined up powerful allies for the cable network, including Oprah Winfrey.
That's part of the reason Carpenter scrambled to line up the partnership with NBC.
In November, iVillage announced that NBC would take an equity stake. In return, the Peacock will promote iVillage on the air, and on its Snap.com Web site. NBC also has options to purchase additional shares of iVillage.
Judging from the terms spelled out in the prospectus, NBC got a good deal. Over each of the next three years, NBC will get 1,228,070 shares of iVillage for just $3.5 million worth of advertising time. That works out to about $2.85 per share. Considering that iVillage's stock will likely be trading at least 10 times that price in two weeks, it's a pretty steep discount.
"An off-line media partner was absolutely vital for them to drive traffic to the sites," says Anya Sacharow, an analyst at Jupiter Communications.
Before, Carpenter's drive had her far ahead of her competitors, threatening to disappear over the horizon. Now, she'll have to pedal faster.
Says Kathryn Kreech, general manager of HomeArts: "I don't think there's room for 20 of us."
