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Russell Horowitz: "Let Us Be the Niche Player" among the Portals Go2Net's chief made his site a star with a few winning service categories. Now a partnership with Paul Allen could help him catch the next Net wave A June 17 special meeting for shareholders of up-and-coming Net portal Go2Net Inc. should be cause for celebration. They're expected to give their blessing to a $426 million investment by investor and Microsoft co-founder Paul Allen. The strategic alliance places Go2Net at the epicenter of Allen's ambitious plans to deliver interactive TV services to millions of households connected to his cable-TV networks. But the Seattle company's CEO, Russell C. Horowitz, doesn't plan on cutting himself any slack just because he has landed a wealthy and powerful ally. With his curly blond hair and T-shirts, the 32-year-old looks more like a surfer than a corporate executive, but he's ultra-serious about turning the company he co-founded three years ago into a player capable of catching the next Internet wave. "VERY SPECIFIC." Today, Go2Net ranks No. 19 among Internet sites -- vaulting into the top ranks from No. 77 a year ago, according to market researcher Media Metrix. Horowitz made the leap by making the site different from big-name portals like Yahoo!, MSN, and Excite. Go2Net focuses primarily on four categories: personal finance, E-commerce, games, and search. In each of those areas, Go2Net goes deep. For example, its Silicon Investor personal-finance channel includes a chat room for investors, financial charts, stock quotes, analysis, and news alerts. Soon, investors will be able to trade stocks on the site. "We are not trying to be everything to everyone. We are very specific," Horowitz stresses. His approach has been successful so far. In the second quarter, completed in March, revenues hit $4.3 million -- up 180% from a year earlier. Net income was $1.1 million. The company makes money by selling ads and by collecting fees from Silicon Investor's 125,000 subscribers. Horowitz has managed to make a profit by keeping his expenses low. Rather than licensing or buying pricey content for his site, he has made a series of strategic purchases of content companies -- trading on his company's stock and prospects. He held off on marketing until the site's offerings were hefty enough to keep viewers' interest.
After high school, Horowitz went on to get a BA in economics from Columbia University in 1988. His first job was as a consultant to startup companies. Then he was one of the founders of Active Apparel Group, a clothing supplier based in New York City. It was in New York that he hooked up with Keister again. The two became roommates and eventually, in 1996, they both headed back to Seattle, where Horowitz saw the Internet as a giant opportunity. He persuaded Keister to quit his job at ViewCom Technology International, a small Seattle software developer. Together, they formed Go2Net in late 1996. "WE RAID GARAGES." Horowitz' vision for Go2Net is get big fast -- but do it by picking a few winning service categories. He took lessons from the TV business. He had watched the networks falter with the advent of cable. "When cable came in, it wasn't the networks that thrived, it was the cable channels like CNN and MTV," he says. "The Net is going to follow the same pattern. Let us be the niche player." Horowitz took the company public in 1997 so he could use its stock to acquire companies and content. Then he went on a tear -- buying search engine MetaCrawler; PlaySite, which offers java-based gaming; and Silicon Investor. "We raid garages, looking for that person with the bright idea but little funding," says Horowitz. Dalton Chandler, an analyst with Needham & Co., believes Horowitz will be successful because of his clear focus and ability to gather content inexpensively. "The common denominator in all of Go2Net's offerings is that they are low-maintenance. They don't cost a lot to produce," says Chandler.
Go2Net's offices are 40 stories above the streets of downtown Seattle in a plush skyscraper. But typical of Horowitz, he was able to land the space for half the going rate because a bank was consolidating and didn't need it anymore. BROADBAND KILLER APP. That kind of resourcefulness in spotting overlooked values is what captured Paul Allen's attention, according to Bill Savoy, president of Allen's investment company, Vulcan Ventures. Allen plans on using Go2Net as the portal for his broadband services. He's the fourth-largest cable owner in the country -- with 5.5 million subscribers -- thanks largely to his ownership of Charter Communications. Horowitz figures the first killer application in the broadband world will be multiplayer games. A person on a PC can play against someone who has a console connected to a two-way cable network. Horowitz is now focused on guiding the business through this transition to high-bandwidth networks. His main challenge is developing content that works both on dial-up access and broadband services. Paul Allen, Go2Net shareholders, and Horowitz' 135 employees are counting on the former soccer player to keep his eye on the ball. Browder reports on information technology and the Internet from Seattle _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ |
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