Business Review Goldman Sachs Internet Conference
Douglas W. McCormick Chairman and Chief Executive Officer
May 22, 2003 Safe Harbor Statements
FORWARD-LOOKING STATEMENTS During the course of this presentation, representatives of iVillage may make forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning iVillage's business, operations and financial condition, particularly in the “Financial Performance” section of the presentation. The words or phrases “can be”, “expects”, “may affect”, “may depend”, “believe”, “estimate”, “project” and similar words and phrases are intended to identify such forward-looking statements. Such forward-looking statements are subject to various known and unknown risks and uncertainties and iVillage cautions you that any forward-looking information provided by or on behalf of iVillage is not a guarantee of future performance. Actual results could differ materially from those anticipated in these forward-looking statements due to a number of factors, some of which are beyond iVillage's control, in addition to those discussed in iVillage's public filings, press releases and other statements made by iVillage management.
All such forward-looking statements are current only as of the date on which those statements were made. iVillage does not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after the date on which any such statement was made or to reflect the occurrence of unanticipated events. Safe Harbor Statements
Regulation G The financial, statistical and certain other information contained in the Company’s presentation will also be available on the iVillage Investor Relations Web site, under the “Presentations” section, beginning at 4:45 PM (PDT) / 7:45 PM (EDT) today for a period of one year. Please also refer to the Company’s Form 8-K furnished to the Securities and Exchange Commission on May 7, 2003, which is also available on the iVillage Investor Relations Web site under the “SEC Filings” section, for certain information required by the SEC’s Regulation G in connection with this presentation. The only media company dedicated exclusively to providing solutions for every stage of a woman’s life iVillage Today: Solid Position, Solid Asset Base
A leading women’s media company Number one source for women’s information online Best and fastest track to women online Multi-media platform for in-depth messaging Online and offline marketing machine Network of branded communities and Hearst Magazines Valued Assets Hearst Magazine Websites
• Redbook • Cosmopolitan • Marie Claire • Victoria • Country Living • Good Housekeeping • Town & Country • House Beautiful The Internet delivers women
62.7 million Women Online
51% of the Online Population are Women
Source: comScore Media Metrix, December 2002 Women Are Accessing the Internet Wherever They Can
At Home:
78.0 minutes per day 16.7 days per month
At Work:
95.9 minutes per day 19.2 days per month
Source: comScore Media Metrix, March 2003, Online Population Wm 18+ Women use the Internet to help make better informed decisions
Over 60% of women believe the Internet is convenient and saves time 78% of women say they use the Internet to obtain product information before making a purchase More than 60% of women click on banners to acquire more information, and 34% go back to an advertiser’s site after viewing the ad online
Source: MSN / Millward Brown IntelliQuest 2003 iVillage Solves Advertiser’s Problems: Today, it is more challenging than ever to reach women with traditional media
Television: Higher clutter, higher prices, lower recall
Users are multitasking
Fragmented audiences
Personal Video Recorders (TiVo)
More media, more choices
Source: TV Dimensions 2003, Newspaper Advertising Bureau (1965 - 1986); Nielsen (2000) When It Comes to Targeting Women on the Internet, iVillage is #1 in Reach, #1 in Average Visitors & #1 in Total Minutes Spent iVillage: #1 in reaching women!
Unique Visitors PROPERTY Women 18+ iVillage: The Women’s Network 9,215,000
About – Primedia Network - Women 4,568,000
AOL TimeWarner Women 4,754,000
MSN Women Central 1,894,000
Yahoo - No Women’s site an unqualified database of links
Source: comScore Media Metrix April 2003 iVillage Dominates the Women's Market: #1 in Average Visitors, #1 in Usage!
MSN About AOL Martha Women Network Lifetime Oxygen Women Stewart iVillage Central Women
Average Unique 800 Users 600 871
per Day 400 346 (thousands) 257 234 200 102 51 34 0
300 Total 250 199 Usage 200 Minutes 150 per month 100 36 (millions) 50 19 4 15 13 5 0
Source: comScore Media Metrix – April 2003 – Women over 18 Deep User Engagement & Mass Appeal
Nearly 30 Million Unique Visitors/ #1 Women’s Site Quarter #1 Women’s Community Site
#1 Astrology Site #7 Content Site
#1 Beauty Leading Content Site Leading Health Parenting Site Site
Source: comScore Media Metrix April 2003, Wm 18+; and IBM Internal Statistics, Q1 2003. Performance Metrics
22nd largest U.S. digital media/web property More than 17.6 million unique visitors per month More than 12% reach of online population Nearly 15% reach of women online 18+ Nearly11 million registered members Over 3,000 individual communities (led by community leaders who control the message boards) Visitors return an average of 2.7 times per month
Source: comScore Media Metrix April 2003, IBM SurfAid and internal iVillage statistics. Internet Industry Poised for Growth
Paid content expected to grow at an annual rate of over 20% through 2007
US online spending is estimated to grow 12.5% by 2005
Online spending estimated to account for 6.1% of the offline ad market by 2007, more than double that of 2002
As always, brand names will help guide the consumer experience
Sources: Jupiter Research, October 2002, eMarketer, October 2002, IDC, March 2003 Revenue Growth Initiatives iVillage Now: Subscription Services Update
eMeta Implementation Complete • Provides turn-key solution to offer new subscription and for-pay products
For-Pay Online Courses • Awaken Your Sexual Self, first such course • Beta average price point of $30.00 • Nearly 4,000 paying registrants during February 2002 beta test • May 19, 2003 re-launch at $34.95 per subscription • Provides ongoing revenue stream
Reviewing our online search opportunities
Pipeline of subscription-like offerings “…If your problems are with the mechanics of sex, a sex therapist may be a good choice. These professionals are trained to help people who aren't functioning sexually because of physiological problems, such as low sexual desire in an otherwise loving relationship or sex-hormone deficiencies.
Erotic materials or sexual activity aren't part of mainstream sex therapy; rather, therapists use educational materials and talk therapy. They may also refer patients to physicians for prescriptions or medical care. Fees are roughly $60 to $120 an hour. Therapists certified by the American Association of Sex Educators, Counselors and Therapists, Richmond, Va., have had psychotherapy training and supervised clinical practice.”
- The Wall Street Journal, May 15, 2003 Subscription Services Subscription Services
Quizzes • Perricone Interactive Skin Assessment, $17.95 • Relationship Tester, $14.95 – $49.95 • Dewey Color System Personality Test, $19.95
Hearst Magazine Subscriptions • iVillage receives revenue from each subscription sold to an iVillage visitor • Nearly 50,000 subscriptions sold in Q1 2003 • Nearly 300,000 subscriptions sold to date
Astrology Chart Sales • Over 165,000 digital products sold in 2002 License Fees to iVillage
Newborn Channel • Introduction of carriage fee • $1.3 million in multi-year contracts signed to date • Less than 10% of potential customers closed Tesco/iVillage UK • Tesco purchased iVillage’s ownership interest in iVillage UK • Entered into an up to 20-year licensing agreement for iVillage content and intellectual property • iVillage to receive the greater of a set monthly fee or percentage of gross revenue iVillage TV (in development) • In conjunction with Berman/Jacobs Media • Brought to iVillage by the William Morris Agency, Inc. • Focus on Internet Dating phenomenon • No upfront cash investment by iVillage Strategic Imperatives for Broadband
“We believe the proliferation of content that is enabled specifically by broadband will be a key determinant of the future mass market appeal of broadband.”
The Broadband Battle - Credit Suisse First Boston – April 2003
“57% of dial-up users are content to stick with dial-up access.”
John Horrigan – PEW Internet & American Life Project – March 2002
“’Dial-up ISPs are pinning their hopes on the one thing broadband providers have yet to master: content.” Wall Street Journal – May 20, 2003 Broadband Future: A potential source of additional revenue for iVillage
iVillage can help broadband providers differentiate their products beyond price wars Offers proprietary unique and fresh content from a community of millions of women Focus on products, applications and advertising that take advantage of broadband iVillage understands both the Internet and the cable industry Advertising Sales/Sponsorship Advertisers Support Us
Amazon.com IBM Avon Intel Bank of America JC Penney Bristol-Myers Squibb Company Johnson & Johnson Campbell’s Kleenex DaimlerChrysler Kraft Dasani Lilly Dell Merck Fingerhut.com Microsoft FirstUSA P&G Ford Motor Company Palm Fuji Film Pfizer GE Sony Pictures Entertainment GlaxoSmithKline 3com GM Unilever Hallmark Verizon Hillshire Farms Warner-Lambert Consumer Group Wells Fargo Recent Ad Sales Highlights
Q1 2003 • Nearly 70 new advertisers and brands added • Over 25 renewals secured • Include Clearasil, GE, Kellogg’s McDonald’s, New Line Cinema and Target, among others
GE • Sponsored online center, bringing authoritative and actionable heart disease information directly to women • Features resources and tools from American Heart Association
Kellogg’s • Sponsored quizzes, topic pages, articles, message boards, newsletters and full screen arrival ad • iVillage produced custom mini-site for Special K “Kick Start Your Diet” challenge Recent Ad Sales Highlights (cont’d)
Wal-Mart • iVillage Parenting Network produced its 4th custom magazine, “That’s My Baby,” as well as a Spanish-language magazine, “Que Baby” • Distributed in Wal-Mart to customers • Developed for Wal-Mart in-store “Baby Days” event in March Financials A note on iVillage Financials: To supplement its consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP) in the United States, iVillage uses non-GAAP measures of operating results and net income, which are adjusted from results based on GAAP to exclude certain expenses. These non-GAAP adjustments are provided to enhance individuals' overall understanding of the Company's current financial performance and its prospects for the future. Specifically, iVillage believes the non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses that are not indicative of the Company's core operating results. In addition, since iVillage has historically reported non-GAAP results to the investment community, the Company believes the inclusion of non-GAAP financial measures provides consistency in its financial reporting. Further, these non-GAAP results are one of the primary indicators management uses for planning and forecasting in future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Financial Performance Q1 2003 • $12.6 million revenue • $6.1 million net loss, or ($0.11) per share • $3.5 million EBITDA loss • $27.3 million cash, cash equivalents and restricted cash Business Outlook • $12.6 – 13.2 million revenue, Q2 2003 • $7.5 million in annualized cost reductions expected by the end of Q2 2003 • EBITDA profitability projected by Q4 2003 Well Positioned for the Future Undisputed leader in women’s space online Media and subscription-focused business model in growing market Diverse revenue streams Revitalized market Experienced management team Strong partners Over $27 million cash in bank Business Review Goldman Sachs Internet Conference May 22, 2003