Extreme Makeover

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.

EXTREME MAKEOVER

Perhaps the most important change GlobalSpec has made came in 2004, when Killeen and Schneiter lit on an idea that would take the company to another level: Engineering Web, a vertical search engine that indexes hundreds of millions of pages of engineering content from the open Web as well as from a variety of proprietary content publishers.

Killeen and Schneiter envisioned Engineering Web as a platform that would serve as an online community for engineers—"the place," Killeen and Schneiter called it. This was an ambitious undertaking. The company drew down another $1.5 million in venture money, bringing the total it had received from Warburg Pincus to $31 million. It was also time-consuming in that GlobalSpec had to partner with numerous technical organizations such as Micropatent (now part of the Thompson Group), which retains a large database of patent information, and HIS, which maintains databases on engineering standards, to make their databases available on Engineering Web.

"This is all about building a community over time," Killeen says. "We didn't expect an immediate financial windfall. We also wanted the community to become scaled enough and vibrant enough so our users will say, 'It's a real place.'"

It was a year and a half before GlobalSpec began rolling out its next commercial offering, a suite of product area-specific e-newsletters supported by advertising. It also began selling ads on its Web site. "We went to the community and said, 'Take a look at our newsletters,'" Killeen says. "'Would you object to seeing relevant ads flow through the site?' If we had that at the beginning, it would have been beyond annoying."

By gaining the trust of the community first, GlobalSpec ensured that the newsletters would be readily accepted. In 18 months the company built up to 5.8 million subscriptions including 2.3 million unique subscribers, Killeen says. In June, the company launched Industrial Ad NetworkSM, an online banner ad network designed to reach the manufacturing, industrial, technical and engineering communities.

GlobalSpec has been profitable since early 2006. It has an I/PRO-audited Web site with more than 3.6 million registered users worldwide, a five-year revenue growth rate of 69% compounded annually; a user community that's growing by more than 80,000 new registrants a month; and 225 employees. "People often refer to us as the Google of engineering content," Killeen says. "I can't think of higher praise."

GlobalSpec Base Case

Headquarters: 350 Jordan Road, Troy, NY 12180

Phone: (518) 880-0200

URL: www.globalspec.com

Business: GlobalSpec is a specialized vertical search, information services and e-publishing company serving the engineering, manufacturing and related scientific and technical markets.

CEO: Jeffrey Killeen

CTO: Stephen MacMinn

Financials in 2006: NA (privately held)

Challenge: To be recognized by the worldwide engineering community as the preeminent online research resource

BASELINE GOALS: