The Google of Engineering Content?By Anna Maria Virzi Print
The search engine GlobalSpec has faced a lot of challenges, but now has 3.6 million registered users and is profitable. It's a reminder of the good that can sometimes ensue when new management comes in and changes direction.
When Jeffrey Killeen took over as chairman chief executive of GlobalSpec in early 2002, the Troy, N.Y.- based company seemed to be making substantial progress. "It had the potential to become the standard for product discovery, component-sourcing and industrial parts classification," Killeen says.
By end of year, the new CEO promised that GlobalSpec, founded in 1996 to provide a specialized search engine for engineers, scientists and purchasing agents, would have more than a half-million registered users of the company's proprietary database, SpecSearch. GlobalSpec's business model at that point was to build a database of parametrically searchable OEM and distributor catalogs, make them available over the Web, and make money by connecting customers to parts suppliers.
What Killeen didn't mention was that after three years in commercial operation, GlobalSpec still wasn't profitable; it was very small, with only $3 million in sales. That's why Warburg Pincus, a New York-based private equity firm, which had already agreed to invest $20 million in GlobalSpec, had sought out Killeen to join as chairman and CEO. GlobalSpec cofounder John Schneiter would stay on as president and cofounder Thomas Brownell would serve as senior vice president of production and engineering, positions they still hold.
Over the next five years, Killeen would overhaul the company's business model, adding new revenue streams, partnering with vendors that contributed to the company's growth and building GlobalSpec into a thriving midsize company that has become the preeminent online research source for the engineering community. His success and that of GlobalSpec provide valuable lessons to companies seeking to leverage their core strengths for growth and remain highly focused.
Killeen was new to the engineering sector, but had established an impressive track record in the Internet search arena. He had headed up barnesandnoble.com, taking it from a start-up in 1997 with 25 employees to a company with 1,000 employees and $200 million in annual sales by 1999. That's the year it went public, raising more than $500 million. Before taking the GlobalSpec job he served as president of Forbes. com. "When I walked in, it was a fledgling Web site, albeit one with very high potential," he says. When Killeen departed, it had a half-million registered users and was competing on equal footing with CNN.com and other financial business sites.
Killeen and venture partner Warburg Pincus had similar ambitions. GlobalSpec needed a vertical search engine with the scale, robustness and ease of use to hold its own in a world dominated by the giants, Google and Yahoo. But in 2002 the question was how to best accomplish this. That, of course, was the new CEO's challenge.
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