>From snowboards to message boardsJim Johnson and Harvard Business School student Matt Diamond founded Alloy Online in the basement of a Boston apartment in January 1996. The company began by selling snowboarding gear through a print catalog, and later introduced a basic e-commerce web site. When demand grew, the duo quit their jobs in finance at General Electric and starting working on Alloy full-time, expanding the catalog's offerings to include a full range of clothing and accessories for teenagers. While over 90 percent of the fledgling company's revenues were from orders placed in the print catalog, Alloy was simultaneously developing its web site into a virtual community for Generation Y, with chat rooms, message boards, advice columns, and entertainment industry gossip. By May 1999, the date of Alloy's $46 million IPO, Diamond and Johnson's company had moved to a new headquarters in New York City and boasted over 50 employees - not to mention more than $10 million in revenue.
Like, a totally cool database!
Alloy's reach into the teenage psyche is virtually unmatched. Reaching over 10 million teenagers a month, the company has information on teens' likes and dislikes, habits, and behavior - as well as each member's mailing address, birthdate, gender, and e-mail address. Wielding such tremendous influence, Alloy has managed to strike key marketing partnerships with Yahoo!, Excite, Reebok, and Hotmail, as well as shared content agreements with The New York Times and RealNetworks.
Alloy redesigned its site in November 1999, introducing new multimedia features like broadband entertainment (courtesy of Scour.net), voice chat, and MP3 and video downloads. But while the company seems intent on developing its e-commerce arm and increasing its online marketing capability, most of its revenue still comes from its print catalog - an estimated 20 million copies of which were mailed in 1999. And though revenues have been rapidly increasing, so have losses. It remains to be seen whether Alloy will be able to become profitable soon enough to keep investors happy.
Alloy has been intensifying efforts to improve its web site through increased offerings such as more efficient search capabilities, free CDs and concert tickets, live chats with celebrities, and test-taking strategies at its test prep center. These features have been made possible by mergers, partnerships, and acquisitions with companies like Mamma.com, CelebritySightings.com, and Kaplan. Alloy is working with Liberty Digital Inc. on developing interactive television, and in 2000 premiered the first Online Serial Movie with FilmSnacks Inc. Three-minute episodes were released daily for 30 days, and were supplemented with online content such as behind-the-scenes footage, chats, and special offers on products featured in the film. Alloy is also making connections in the more traditional field of paperback books. A new series of teen books by best-selling author Francine Pascal bears the Alloy icon and has a corresponding microsite from which readers can view the main character's e-mails (received, sent, and unsent) and even send instant messages to the character's friends.
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