Spectrum Equity Investors has led a $300 million investment to acquire a majority interest in Provo Utah-based The Generations Network (the parent company of Ancestry.com, MyFamily.com and other sites) according to a source with knowledge of the deal.
The Generations Network competes with a number of new Internet startups that we’ve recently covered. Its Ancestry.com site competes with Geni and MyHeritage. MyFamily.com competes with Story Of My Life, Our Story and others.
Geni’s last round of financing valued the company at $100 million. But none of those competing sites, or even all of those sites aggregated, have caused any financial pain yet for The Generations Network. The company is pulling in $150 million or so in yearly revenue and is hugely profitable according to our source.
This is a liquidity event for many or most of TGN’s shareholders, although it is apparently not a complete buyout. Employees and possibly some outside shareholders still have equity in the entity, which is almost certainly preparing for an IPO or other larger liquidity event.
The most recent Comscore data says TGN had 8.2 million unique worldwide visitors in August. They’ve raised $95 million to date, although the last round of financing was closed in 2001.
The company is not responding to requests for comment.
$300M for revenue of $150M seems like a steal to me. Must not be a full buyout.
Congrats to Ancestry.com!
I have met the guy that started myfamily.com a couple times. Sadly, this buyout will probably put nothing in his pocket since he took so much Venture capital with liquidation preferences that I think, though he still has some stock, the company would have to be sold for around 2 billion dollars for him to see money.
In fact, he said that his biggest regret was he didn’t know the meaning of liquidation preferences, he was too busy trying to change the world to worry about the money. Real nice guy too…
wow that’s a huge sum for that website. don’t you think?
“sadly, this buyout will probably put nothing in his pocket since he took so much Venture capital with liquidation preferences that I think, though he still has some stock, the company would have to be sold for around 2 billion dollars for him to see money.”
That’s the downside for entirely depending on VC money.
any idea of valuation and how many paying subscribers they have?
@3, Jaymon.
The company would have to be sold for a minimum of two billion before the founder can see any money?
“…F’n Bitch”
@6
I really have no idea, that was just something I picked up while talking with him that really stood out to me. He used a large number, but I can’t remember exactly what it was. It was large enough though that he was pretty sure he was never going to see any money…
The valuation of Geni, despite the established presence of Ancestry/MyFamily, is an excellent example that there is still room for competition in spaces that seemingly have already been “conquered” online. I actually brought this example up today when discussing drugstore.com vs 1-800-Pharmacy.
On a personal note, it has been interesting to observe the ups and downs of Ancestry/MyFamily.com through the several friends and family that have worked there. Pretty wild ride
http://fakesteveballmer.blogspot.com
I always liked this site but did not find it too usefull when it came to my people.
I would be very happy if you fix this issue in techcrunch:
When I click on ancestry.com, I want to go to ancestry.com website - NOT your crunchbase page!
When I first saw the title the first thing that popped into my mind was the Mormons. For those of you that don’t know the Mormons believe that you can convert someone after their death, but you need their lineage.
This is why they are one of the biggest dabblers into genealogy.
Reading the article, makes me wonder how rootsweb.com owned by ancestry.com will survive and still be a free site. Wonder if they bought any of the new dnaancestry.com and how that will effect what we DNA-ers hoped would develope into a company not just out for money.. but to do research also… hummmmmm. All we can do is wait and see…
N.
#11
Although it is off topic.
Mormon’s can’t convert someone who is dead but they perform certain ceremonies like baptism for them here on earth. So just in case, IF the person decides to convert after life, he would have had his baptism and other ceremonies performed for him by his (future) family members.
Yes i was thinking of the same thing as well $300 million for $150 million may not look too attractive. I bet the VC’s are happy.
@11 and 13
While ancestry/myfamily was started by an LDS (Mormon) guy, the company is not affiliated with the LDS Church in any way. Although the LDS Church is a major player in the Genealogy world.
Interestingly enough though, the problems genealogists face are numerous and interesting. The biggest problems are duplicate records and disagreements over data (birthdates, etc.). Problems I would assume are pretty common among all the different sites. It is pretty interesting how these are being solved. There are going to be some major innovations in this space in the coming years, none of which will probably come from Geni.
@Jaymon - Paul Allen the lesser? (his name not mine)…. I still think MyFamily so dropped the ball when they had it rolling - they could have been one of the largest current social networks today. They’re not small, but not nearly as big as what their potential was in the late 90’s. I might be so bold as to call them the first solid attempt at (limited & private) social networks.
Something is not adding up here! Unless they sold only 50% (+-) of the company.
$95M in revenue gets you a $600M valuation (if this was an IPO)
Does it show that,
Dick Cheney and Barack Obama are cousins?
(It’s in the news.)
#8 Jonathan Tanner:
Is this you? Just curious….
http://www.excitingads.com/1_800_patches_inc.htm
Jonathan Tanner
Founder, Director, & Exec VP
Mr. Tanner and Mr. Hendrix recognized the need for a service-oriented, technology-focused marketplace for the rapidly growing transdermal patch industry?creating the 1-800-Patches concept. Mr. Tanner, was the Regional Manager of Top Gun Promotions (direct sales) and Salesmen of the Year for Truly Nolen’s (pest control company) outsourced sales force. Mr. Tanner also serves on the Board of 1-800-Pharmacy, Inc. (mail-order pharmacy). He graduated from Brigham Young University with a Bachelor of Science in Business Management, with an emphasis in Entrepreneurship and a minor in Filmmaking, having produced a PBS documentary feature film and a National CINE Eagle award-winning film.
______________
________________
http://www.campcobalt.com/news.....ith-errors
Green Tea Claim is Steeped with Errors
The National Advertising Division (”NAD”) has requested that 1-800-patches.com discontinue many of its advertising claims on its Green Tea 300 product because the claims are misleading.
In one instance, an ad states that Green Tea 300 is “30 Times more potent than regular green tea.” The ad goes on to ask clients to “Join Oprah” in losing 10 pounds. In addition, the ad shows a doctor extolling weight loss virtues of Green Tea and quotes him as saying, “[Lose] 10 pounds in six weeks. I will guarantee it.”
In its defense, 1-800-patches.com stated it based its potency claim on the fact that Green Tea 300 has 30 times more polyphenol than green tea steeped in a testing laboratory (the company did not pay for the study; it merely read the findings). The polyphenol count is the only measure by which 1-800-patches.com makes its claim. The company claims the “Join Oprah” and doctor guarantee portion of the advertising was specifically related to an episode of the Oprah Winfrey Show in which a doctor guaranteed a weight loss of 10 pounds for a diet regimen that included consumption of Green Tea (although not the Green Tea 300 product).
NAD correctly found that advertisers may not make claims using consumer testimonials or expert endorsements that cannot be substantiated by the advertiser. Moreover, advertisers must have appropriate scientific evidence to support scientific claims. The use of Oprah’s name and a quote by a doctor each suggested an endorsement of the company’s product that was not accurate. Ultimately, 1-800-patches.com pulled the questionable advertising.
Practice Pointer: While it was improper for 1-800-patches.com to suggest an endorsement of its product by either a doctor or a celebrity that it didn’t have, it would have been acceptable to have mentioned the television show. For instance, the advertiser could have stated “A recent episode of The Oprah Winfrey Show highlighted the virtues of green tea.” Depending on the size and placement of such a statement, such use would likely not suggest an affiliation between the advertiser and the celebrity.
Agree with others this is probably not a complete buy-out, with those revenue numbers and the growth of Ancestry.com.
What still really aggravates me is the $100M+ valuation of Geni. Geni doesn’t have anything except an application that lets you build your tree online. Big deal, that’s not hard. The value is in the data, the network, etc. You can’t even import the most common Genealogy format into Geni: GEDCOM.
They were valued that after not even being online very long. It makes me wonder what people are thinking, you can just build a web app that lets you build family trees, then hope the people will come and use it, and be worth $100M?
Geni and other new 2.0 websites are not genealogy web sites but only social family networks ! Ancestry is the first English genealogy web site as GeneaNet is the first French one.
I prefer Geni, they have a few things to change, but in general they have a very nice design: http://www.designvsart.com/blo.....mily-tree/
That is an amazing amount of money for a genealogy site. However, the prices be touted for Facebook and MySpace makes this amount seem like chump change.
Comparing Ancestry.com to Geni is like comparing a University to a Starbucks because both have people that hang out at these places. Ancestry has a huge DB of information which they continually add to for finding information about your relatives. Things like land records, census data, passenger logs, etc. Geni has people’s unverified ancestry information.
I too believe they are getting ancestry for a steal!!! Genealogy is second only to porn for internet usage.
additional thoughts …. the half price database subscriptions that Ancestry.com offered back in Jan/Feb 2007 … was that to boost their numbers for a likely investor / buyer …. BIG disappointments are in store, when many don’t renew automatically at the higher “regular price” for the investor “/ and like wise for the few customers who don’t realize that they WILL be renewed automatically if they neglected to block the auto-renewal process “/
but then again I don’t see the hobby of genealogical research declining anytime soon … just the number of players on the field may vary somewhat “/
Ancestry.com has been a prime IPO candidate for years. I had heard rumors from a tech-friend in SF that all the major search engines have wanted to obtain Ancestry at one point or another. I suspect as soon as SEI gains control, the company will have an IPO and/or sold to google or some other search entity. If I had $300 mil, I would buy that company NOW!! Everyone I know is or has done, genealogy research. As baby boomers age, this hobby will only get bigger! If there is an IPO, count me in for a fast buy and hold.
@the Observer, right, they just automatically renewed my $199 or whatever it was membership (if they sent me a notice, it went into my bulk/spam box, as I never saw it - so I’m not saying they didn’t try to contact me but that I only noticed it on my credit card before I realized it had been charged). I probably didn’t uncheck the auto-bill but was still a bit surprised to see the charge since I’ve not even used the site in about a year. [I thought the only one who still did that was AMEX with my magazine renewals that seem to get charged every 5 months.]
Consumer Reports does that too.
As one of the original two founders of Ancestry.com I’m getting emails and IMs from everyone who wants to know my take on this acquisition.
Like Josh Kopelman who posted about how he broke his shoulder so he wouldn’t have to explain it 20 times a day (you’ve got to watch his indoor skydiving video!), I blogged this morning so that everyone can what I think about the Spectrum Equity buyout of The Generations Network.
http://www.paulallen.net/2007/.....y-dot-com/
Here is Josh’s post: http://redeye.firstround.com/2007/10/silence.html
Quote from original post: “This is a liquidity event for many or most of TGN’s shareholders…”
How is SEI’s action of an additional $300M investment in TGN a “liquidity event” for TGN’s small-stake shareholders, since SEI is privately held? Where’s the “liquid” for TGN small-stake shareholders *prior* to an IPO or acquisition, which would now have to be greenlighted by SEI, which I’m sure has “liquidation preferences”. Short question: what happens to the non-preferred shareholders (incentive stock option employees who have exercised and hold shares)?
The MyFamily.cn website is designed to make Chinese family relationship and connection closer under the condition of fast pace life and long distance from other family members, resulted from the economic development and intra-migration in China. It provides families a flexible space to record and share their family daily life. It is designed to let Chinese families “pursue the root (ancestor)” of their families. It is also designed to be a specific environment in which local community, government and business can share information, and in which life quality improved.
The MyFamily.cn comment above is designed to be really really spammy and make Chinese family relationship and connection closer under the condition of fast pace life and long distance from other family members, resulted from the economic development and intra-migration in China. It is also designed to be nearly incomprehensible to anyone reading it.
Congratulations! Nice sum & good job done!!
As an original contributor of family history information to the predecessor organization of Ancestry.com when it was a free site, I was and remain apalled, that genealogical information collected and stored on this and like sites was sold without the contributor’s permission or option to remove personally submitted information. The family history information must now be viewed via a paid membership to access and use, and is at odds with the understanding under which it was originally contributed. The continued corporatization of specialty sites and exploitation of personal and freely submitted information to predecessor organizations before being converted to paid suscription sites should be illegal, and investigated by the FTC for possible fraud and theft.
#33
Are you perhaps referring to Rootsweb.com? If so, the data you submitted are still available FREE at RW, are identical to what appears in any of the family trees in the database at Ancestry.com, and can be deleted by you AT ANY TIME. You will find the same search capabilities as those on Ancestry (for example a wildcard or soundex search), and the results can be printed out without the annoying advertising bar that exists on the right hand side of the Ancestry screen. Just look for the WorldConnect database in the results to your RW name search.
What you have posted simply isn’t true. I say this because I use both Ancestry and Rootsweb all the time in my research.