Growth Only Constant At Hitwise

Growth Only Constant At Hitwise
Hitwise founder Adrian Giles

HITWISE, recently sold for US$240 million, has changed an awful lot since it was founded as a search marketing consultancy by Adrian Giles and Andrew Barlow 10 years ago.

But there has been one constant – growth; Hitwise just keeps getting bigger. It now has 200 staff and is forecasting sales to increase by 40% over the next 12 months, leading to pre-tax profit of US$12-15m.

It has become one of the great success stories of Australia’s Internet industry, ruling its niche in numerous markets, including the UK and USA.

Present management will remain intact and be largely left alone by new owner Experian to run the business, according to co-founder Adrian Giles, who put A$5000 into the company, then known as Sinewave Interactive, back in 1997.

“Our first products were SEO products then in ’98, ’99 we started research and development into Hitwise, which was launched in 2000,” he said.

The Hitwise business model – to collect and analyse website visitor data from Internet Service Providers – has proved both resilient and transportable.

Expansion rapidly followed “because we wanted to get into as many market as possible” before the competition did.

“However, in hindsight we haven’t had many competitors come along at all – even to this day….”

“There are great barriers to entry through the technology – what we do is not easily replicable.”

The long-term relationships Hitwise has with ISPs also cannot be duplicated.

From small beginnings, Hitwise now reports on almost one million websites every day for more than 1200 clients.

Giles said he was extremely pleased with the sale to Experian and will be staying on to oversee the company’s continued evolution.

“We’re pretty happy and excited about it,” Mr Giles said.

Hitwise had originally planned to list on NASAQ in the second half of this year but received a lot of trade sale interest once stories started appearing in the finance media.

“So we thought we’d better formalise the process,”

“NASDAQ would have been a great thing but but would have taken longer than we wanted and come with greater risk.

“Experian was deemed to be a good result for shareholders who were able to get a great return immediately.” Major outside investors include Allen & Buckeridge and Insight Venture Partners.

Giles said Experian was the most logical fit of all the suitors.

“It’s a marriage made in heaven from a product point of view. Everyone is pretty excited about it because we have a great opportunity to grow in new markets with new products.”

Experian’s core business is aggregating, cutting, dicing, analyzing and selling business information. In some ways, Hitwise does the same thing online for websites and online businesses.

“The good thing about these guys is that they saw Hitwise as a fast-growing, scalable organization- a good brand in a niche area.”

He said Experian want to keep Hitwise focused on what it does best and generate growth through geographic expansion.

“They have offices in lots of different countries – in Western Europe and Asia, for example – and we can leverage off that.”

Search Engine Room
May 8, 2007

 

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