Investors have been showing a surprising interest in eUniverse Inc., one of the few remaining Web content companies in Los Angeles. eUniverse operates what it calls an “interactive entertainment network,” which is in fact several entertainment Web sites targeted at men and women ages 25 to 50. Its stock was trading at around $3.30 last week, up more than 50 percent since April.
That interest could have been triggered by eUniverse’s recent expansion into fee-based services related to gaming, dating and finance. Last week, the company bought the assets of Funbug Inc., an online platform for gaming and sweepstakes, and it launched a financial subscription service powered by AlphaTrade.com’s Web-based E-Gate financial service. The week before those moves, eUniverse launched a dating site called Cupid Junction.
The properties add to eUniverse’s stockpile of sticky and increasingly fee-based Web sites, which rely less on advertisers for revenue and more on monthly fees.
The company, which employs 90, could use the new revenue stream. It reported revenues of $4.3 million for its fourth quarter ended March 31, down from $4.6 million in the previous quarter but up from $4 million in the like year-earlier period.
It reported a net loss of $17 million (92 cents per share) for the fourth quarter, compared with a loss of $4.8 million (28 cents) in the like year-earlier quarter.
Making things worse, eUniverse finds itself with no cash reserves. According to its most recent SEC filing, the company’s “ability to meet its obligations in the ordinary course of business is dependent upon its ability to raise additional funds through public or private equity financing, establish profitable operations, enter into collaborative or other arrangements with corporate sources, or secure other sources of financing to fund operations.”
One of those “collaborative arrangements” is to be announced this week, according to eUniverse President Brett Brewer, who declined to comment further on the pending deal.
While Brewer said that advertising revenue continues to be “pretty strong,” he is more bullish about the newer fee-based membership models. eUniverse’s online streaming stock information, for example, will cost subscribers $17 per month, plus exchange fees.
Hollywood Gigs
The Internet, for all its disappointments and lost value, has completely changed the world of job recruiting and made the search for talent cheaper and more efficient than hiring outside recruiters or placing traditional advertisements.
Few know that better than Paul Buss, founder and president of Showbizjobs.com, the Pasadena-based job recruitment site focused on the entertainment industry.
Re-launched last week with new features and the capacity to handle increased traffic, Showbizjobs.com is part of a growing number of successful niche recruitment sites. Others focusing on particular sectors and regions include Escoffier.com, CasinoCareers.com and JournalismJobs.com.
The niche sites all have one thing in common: cheaper job posting rates than those charged by larger generalist sites like Monster.com, HotJobs.com and CareerBuilder.com. Posting a job at Showbizjobs.com, for example, typically costs $125 for 30 days, compared to $300 for a similar 30-day ad at Monster.com.
Recent local layoffs by giants Warner Bros. and Walt Disney Co. have sent traffic soaring at Showbizjobs.com, and while that doesn’t translate into immediate revenues, it does embolden Buss’s mission to be the industry’s primary site for recruitment.
Of course, traditional search firms offer relationships and contacts that sites like Showbizjobs.com can’t provide, and the big five media companies continue to use those firms for high-level searches.
But when it comes to mid-level management jobs and below, all the major entertainment companies post ads at Showbizjobs.com. Paramount Pictures, Vivendi Universal and Fox Films are the site’s top clients.
Buss said that job postings are down 25 percent since January, but the number of unique visitors recorded by the site 95,000 last month is up 25 percent. Buss would not disclose financials for the company, but he acknowledged that revenues are down 20 percent from 2000, which was 100 percent above 1999.
With its low overhead, Showbizjobs.com is prepared to weather an extended downturn. Buss is one of just two full-time employees at the virtual company. He contracts out work to designers in Washington, D.C., programmers in Dallas and to a sales force in L.A. That lean approach has generated profitability since the company was founded in 1995.
Buss said he has “no large game plan to expand,” but he is seeking to build a consortium of investors from the major entertainment companies. He has the experience to do so. Before starting Showbizjobs.com, Buss for five years was chairman of the Entertainment Recruiting Network, an L.A.-based consortium of human resource experts from media companies.
Tech Coast Commotion
Fast cars, John Paul Mitchel, Ed McMahon, seductive women and technology leaders? Seems like a strange mix to take center stage, but they all did at the Tech Coast Alliance’s unveiling of its new magazine and initiative held last week aboard the Queen Mary in Long Beach.
Tech Coast’s Chief Executive Chip Parker used the event to launch his annual magazine, which was delivered by several scantily clad women, and to unveil the “mind-blowing” news that “Southern California is the No. 1 top-tier technology marketplace in the world.”
Tech Coast Alliance sponsors Microsoft Corp. and Compaq Corp. sent representatives to the event, but the stage was dominated by hair products guru Mitchell and McMahon, who both used the occasion to tout an environmental organization they support.
Tech Coast Alliance, which hopes to put the behemoth region extending from San Diego to Santa Barbara on the map as the “Tech Coast,” has its work cut out for it. About the only things that truly connect these diverse, technology-rich regions are a few traffic-choked highways.
Maybe that’s why one of Tech Coast’s high-profile sponsors is Symbolic Motors, the Beverly Hills auto dealership that sells high-performance vehicles.
UCLA Launches Fund
The Anderson School at UCLA announced last week that it has raised $550,000 for its first co-investment fund for early-stage technology companies.
The fund will close at $1 million and will return profits to the university. The fund has secured 11 individual investors who are affiliated with local firms such as Redpoint Ventures, Palomar Ventures, Rustic Canyon Group and Trident Capital Partners.
“I think it’s a wonderful time to be able to invest in early-stage technology,” said Al Osborne, director of UCLA’s Harold Price Center for Entrepreneurial Studies. “I think we can get great valuations because of a scarcity of supply of capital. There are wonderful deals out there that need funding.”
The fund will co-invest in seed-stage deals, making investments of $50,000 to $100,000. Osborne said the fund’s investment committee is already looking at deals. He estimated that it will make 10 to 20 deals over the next three to five years.
Tom Unterman, managing partner of Rustic Canyon, is chairing the fund’s investment committee, which will make all co-investment decisions.
Staff reporter Hans Ibold can be reached at [email protected] [email protected] or at (323) 549-5225 ext. 230.
