Changes at Active Network Put Emphasis on Sales, Social Networks

10/10/12Follow @bvbigelow

After San Diego’s Active Network (NYSE: ACTV) disclosed last month that longtime chairman and CEO Dave Alberga would be assuming a new role as “executive chairman,” Alberga says, “The first question from Wall Street was, ‘Are you backing away from the business?’”

Alberga says his answer is “No.” The changes are intended to strengthen the Internet company’s sales operations and to improve the Active Network’s use of social networking tools as part of its evolving online strategy.

When I met with him recently, Alberga told me has no desire to leave the business, which provides Web-based services and media for groups that organize sports leagues, marathons, swim meets, corporate conferences, and other events. The company, which has almost 3,800 employees, reported $121.6 million in revenue for the quarter that ended in June, a 23 percent increase over the second quarter of 2011, when the company posted $99 million in sales.

Dave Alberga

I wouldn’t be surprised, though, if Alberga pulled back on the throttle at least a little. He has been the Active Network’s CEO since 1999 and its chairman since 2001.

“The success of this business in the coming handful of years depends on two things,” he says. “One is our ability to execute—to continue to build out the technology and products that our customers need and to solidify our market and technology base. The other is to ramp up our sales efforts. We’ve kind of undersold our products.”

As Alberga explains it, the executive reorganization formalizes the way he and president Matt Landa already were running the business, except that as executive chairman he can offload some administrative chores (human resources, finance, accounting, and legal) to concentrate on the stuff he’s good at—such as major business initiatives, advocacy in Washington D.C., and executive recruiting.

Landa, who became CEO, gains an opportunity to spend less time managing the business and more time to focus on sales, while Darko Dejanovic, who was hired just over a year ago as chief technology officer, now has more operating responsibility as president.

Alberga told me one problem he’s trying to solve is a “disconnect” between Active Networks’ products and its business. “So by consolidating the business GMs under Darko, where the technology is, I’ve moved the business heads to be as close in proximity to the technology as I could get them.”

The Active Network says it now has more than 51,000 customer organizations, which hire the company to handle their online reservations, sell hunting and fishing licenses, arrange corporate conferences, and other related services. Alberga says the company now handles more than 80 million registrations and transactions a year (in 2009, it was 45 million), which amounts to about 6 percent of the North American market. In other words, as much as the company has grown, there is still plenty of room for more growth.

Accomplishing this, as I reported previously, required the company to overhaul and replace its software infrastructure with a more sophisticated, cloud-based, Software as-a-service (SaaS) platform called ActiveWorks.

Still, Alberga says the Active Network is not like any other SaaS business because its customers—the organizers planning marathons, tennis tournaments, and other events—are typically not using sophisticated enterprise software systems to manage their operations. So it’s not a matter of selling a CIO or CTO on what amounts to an upgrade of their existing system.

“The vast majority of [our customers] never could have gone for automated service if they’d had to install their own networks,” Alberga says. “It would never have been cost-effective without the kind of really low-cost tools that we have now.”

As the new executive chairman sees it, the Active Network is creating a whole new industry around activities and events reservations. “We’re automating an industry and defining an industry at the same time”—and that is a fundamentally different sale than encouraging a corporate customer to give up their enterprise software system and instead pay a monthly charge to let somebody else provide basically the same service over the Web.

One encouraging trend that makes the job easier is that traffic from mobile users on Active Network websites has gone from 6 percent to almost 20 percent in roughly a year. While that represents a challenge in terms of developing software for mobile users, Alberga says it also represents a clearer added value proposition for event organizers. “We’re better off with more traffic in mobile,” Alberga says, “Mobile is good for us.”

In recent years, the Active Network also has been moving to create online communities for the people who are registering for swim meets and other events. So the company has been working to improve the social networking aspects of its business, and enabling its online communities to move their social networking offline, into the real world.

People who meet online by talking about an upcoming marathon or beach volleyball tournament can meet offline at those events. A recent survey of Active Network users also revealed that the second-biggest reason users give for signing up for an event is that they have friends or relatives who are participating in the same event.

As a result, users who are using the Active Network to register for an event are offered an opportunity to notify their friends through Facebook, Twitter, and other social media.

“We’re taking advantage of every opportunity to have entrants leverage through social media,” Alberga says. “They’re essentially letting their friends and family know that they have registered for an event. By bringing this into the registration process,” he says, “we’re driving really benefits to consumers.”

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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