Strategy and Tactics: How Active Network’s CEO Uses Innovation to Fuel Growth
On the day after the San Diego-based Active Network reported its first quarterly financial results as a publicly traded company (NYSE: ACTV), CEO Dave Alberga was looking satisfied as he fielded questions in his office.
The Active Network had just posted its first-ever profit—$5.5 million for the second quarter ended June 30. The company increased its second-quarter revenue to $99 million—a 21 percent gain over the same quarter last year. The company also has accumulated more than $157 million in available cash, and erased its debt of more than $40 million with some of the proceeds from the $148 million the company raised in its May 25 IPO.
Not bad, especially if you consider that this hot growth enterprise was founded 14 years ago—which practically qualifies for AARP membership in Internet years.
The Active Network provides Web-based services for the companies, organizations, and government agencies responsible for putting on triathlons, sporting events, recreation leagues, and other competitions. It also handles camping reservations, hunting and fishing permits, conferences, and major corporate events, providing a range of comprehensive services that range from online registration and transaction processing to marketing and communications. During the just-ended quarter, the company processed 22.9 million online registrations, a 7 percent increase over the same quarter last year.
Increasingly, the Active Network also counts itself as an online media company that serves millions of active people who are looking for things to do. The company not only builds online communities of people who share the same interests, it also amasses data that show precisely how they share their interests. In this way, the company can offer advertisers access to millions of engaged consumers.
“We’re going after a space that we think is a $10 billion space that’s completely unaddressed,” says Alberga, who was wearing blue jeans and a blue bike mechanic’s work shirt—the company’s homage to triathletes and competitive bicyclists everywhere. (Alberga, a former U.S. Army platoon leader and erstwhile triathlete, also has a framed U.S. Postal Service jersey signed by Lance Armstrong hanging on the wall near his desk.)
Yet the $10 billion market that Alberga has targeted has only become apparent in recent years. Before the advent of software-as-a-service (SaaS), Alberga says, “It was impossible to address as large and fragmented an audience as we’re addressing today, with the disparate needs these subverticals have.
“Saas hasn’t been around that long, but we’re kind of launching … Next Page »