Building A House At The Click Of A Mouse

Folio: The Magazine for Magazine Management, July 1, 2000 by Jeff Garigliano

Building-Industry publisher Hanley-Wood is setting up an online catalog for residential builders. Company president Frank Anton explains the model, estimates the market's potential and stresses the "fun" of it all.

SURE, A LOT OF PUBLISHERS talk about launching an e-commerce operation, but Washington, D.C.-based Hanley-Wood is one of the few to actually roll up its sleeves and do it. The publisher of 26 trade titles in the home-building and remodeling industry, Hanley-Wood is now starting a site called ebuild (president Frank Anton likens it to an "interactive catalog") that will include interactive features, content, and of course, building supplies. Once it's up and running ebuild will offer between 40,000 and 50,000 separate items to both contractors and consumers.

It's an ambitious project, but Hanley-Wood has some things working in its favor. The company is already the best-know trade publisher in the residential construction business. Moreover, it has already figured out a way to make money on the Internet. Its fee-based Web sites--such as BuilderOnline--are "slightly profitable," Anton says, at a time when most magazine Web sites are still hemorrhaging money. We talked to Anton about the latest developments at ebuild.

Q: First off, how big is the online market for building supplies?

A: The total business, offline, is about $175 billion to $200 billion. That's residential alone. For the online component, it's very hard to pin it down precisely. We've done some math and some estimating that says, for example, if we get one percent of that $200 billion market, that's $2 billion. If we get 1/100th of that in transaction fees, that's $20 million. But those are all rough approximations.

Q: You'll be selling everything needed to build a house from scratch?

A: No, we're going to stick with finished building materials--things like lock sets, windows, doors, flooring, and so on. But not things like two-by-fours. We'll probably have alliances with companies that sell those basic structural materials, but they're more of a commodity, something we don't want to get involved in right off the bat.

Q: When does the site go live?

A: The idea is that by October 1, we'll have certain product categories up. Not all 40,000 to 50,000, but certain groups of items, like maybe kitchens. And the site's capabilities would be fully fleshed out to let contractors and consumers work together, plus a lot of other value-added editorial. So you'd have trend information about kitchen design, for example. You'd have fact sheets about the difference between a convection oven and a conventional oven. You'd have an interactive calendar that tracks how the job is progressing.

After that initial launch, we're planning to quickly build out the rest of the vertical product categories by the housing industry's major trade show, which is the middle of February 2001.

Q: Is the content repackaged from the print magazines or created for the site?

A: It's both, but I would think that more than half of it would be newly created. There is an editorial staff for online, working to create that content.

Q: Speaking of the staff, how many people will it take to run ebuild?

A: The initial phase will require a staff of 50, and we're a little more than halfway there right now. Eventually we believe we'll need as many as 100 people.

Q: Some of them over from Hanley-Wood's print side through an innovative approach to HR--an in-house job fair. How did that come about?

A: We were nervous that the startup of this site would demoralize people working on our print products. It's high visibility and it will represent a very large investment into the company. And we've always had a policy inside the company--I guess not a terribly unusual one--saying that we'd give jobs to internal candidates over someone from the outside, all else being equal.

So instead of just wringing our hands and fretting about the effect this was going to have, I said, let's be straightforward about it. Let's have a job fair. So it really started with a sort of cheese-and-cracker reception, where people could go to get some basic information. And it was completely transparent. There were no surveillance cameras, everybody knew who was going and who was interested.

Q: So how many hires have come from the print side?

A: We're at about 25 people right now, but only 10 of those people have been hired since the job fair. Out of those 10, four of them came from print.

Q: Have the print managers who've lost people complained about it?

A: They've been cooperative. We told them that retribution or threatened retribution against people who went to the job fair would not be accepted. I wasn't really worried that anyone would do that, but I didn't want them discouraging people. And they haven't.

We now have meetings going on between the online folks and the magazine folks, to make sure that a magazine department doesn't get gutted. So maybe after a certain number of hires out of a department there has to be a cooling-off period to allow that department to restabilize. And then if online's got more candidates from down there they can get them. We haven't really figured that out quite yet, but we're thinking about it. The bottom line is that you still have to do magazines, and the core of our business is still magazines.