ANALYSIS: Profile - Terpin: betting the ranch on a wired world

You might not agree with Michael Terpin’s vision of the future, but you can’t ignore him. Fresh off securing dollars 17.5 million in VC funding, Terpin’s Internet Wire is eager to do battle with the big boys of the news distribution market. Craig McGuire reports.

You might not agree with Michael Terpin’s vision of the future, but you can’t ignore him. Fresh off securing dollars 17.5 million in VC funding, Terpin’s Internet Wire is eager to do battle with the big boys of the news distribution market. Craig McGuire reports.

You might not agree with Michael Terpin’s vision of the future, but

you can’t ignore him. Fresh off securing dollars 17.5 million in VC

funding, Terpin’s Internet Wire is eager to do battle with the big boys

of the news distribution market. Craig McGuire reports.





If Michael Terpin is right, many of the tools by which PR pros

distribute news might not be around much longer.



’Postal delivery - which takes three to four days to get there - is

dead,’ says Terpin, 43. ’Faxing media, grossly ineffective and

intrusive, will be dead in a short time. Satellite distribution is

immediate but unnecessarily expensive. The entire industry is headed

towards Internet distribution.’



So confident was Terpin that last year he stepped down as head of his

eponymous PR agency to launch Internet Wire, the leader among a handful

of Internet-based news distribution services that have sprung up over

the last few years.





Placing bets on the Web



The entire fledgling Internet news distribution market - valued at

barely dollars 10 million last year- is a far cry from the estimated

dollars 350 million divvied up by satellite-based news distribution

heavyweights like Business Wire and PR Newswire.



But as with every dot-com story, there’s so much potential that already,

Terpin claims, Internet Wire is valued at around dollars 43 million (10

times the value of his PR firm) following a successful ’99 in which

revenues doubled each consecutive quarter. With 91 employees, 26,000

journalists hooked in and 2,300 clients on its books, the company has

expanded from its LA base to set up shop in New York and San

Francisco.



Flush from an infusion of dollars 17.5 million in VC funding, most of

which will go to sales and marketing, Terpin hopes to build on Internet

Wire’s early foothold in the industry. ’We’ve learned the moves to get

into this market,’ notes Terpin. ’Now we’re learning what it takes to

win.’



Terpin got his PR chops in journalism. After earning a J-school degree

from Syracuse University, Terpin plied his trade in upstate New

York.



But PR was beckoning. After holding a few high-ranking posts at Avatar

Communications and Canyon Studios PR, Terpin planted his own flag in

Manhattan Beach, CA on the first day of 1990. With just a single

employee - a freelancer at that - Terpin set his sights on the video

game and CD-ROM industries.



Soon after, he inked his first deal with Fujitsu.



During the mid-’90s, with the business world rushing to get online, many

in the PR industry were still wrinkling their noses at the Internet.

’It’s really only been in the last year or so that the PR industry has

overwhelmingly embraced the Internet,’ says Terpin. ’Around 1994, the

thought leaders in the industry got really excited but didn’t have any

products. Many tried to set up pages, got frustrated and quit. Some

bought e-mail lists only to find there weren’t many journalists on

them.’



The Terpin Group would become the first outside PR agency to work with

industry pioneers such as America Online, Earthlink and Xoom.com,

according to Terpin, whose firm also did start-up work for Jupiter

Communications, Playboy.com, Rollingstone.com and iPlanet. Terpin

attributes much of the success he’s had with Internet Wire to his

earlier work in PR. ’It was a different type of experience, looking over

the shoulder of clients creating a whole new industry,’ he says. Today,

The Terpin Group, with its hi-tech focus and 30 full-time employees, is

attracting buyout bids from a number of suitors.



Terpin introduced the predecessor for Internet Wire in 1994 - a system

called gina.com (Global Internet News Agency) as a service for

clients.



And by mid-1998, when The Terpin Group was no longer among the top 10

clients of the service and with dollars 250,000 in annual revenues

generated by only three employees, Terpin realized that his agency could

stand alone.



Terpin is frank enough to admit he has stumbled at times. ’Whenever I’ve

opted for excessive caution, I’ve had to watch other companies beat me

to the punch. Conversely, when I’ve taken on too much and not properly

planned for contingency, things inherently fall through the cracks.’



Terpin points to a time just after the launch of gina.com in 1994. ’In

our first year, we launched maybe a dozen services, everything from

search-engine registration to meta-tag analysis,’ he explains. ’What we

probably should have done was instead focus on a few - but one of those

did develop into Internet Wire.’



Terpin eventually stepped down from The Terpin Group to spin off

Internet Wire with dollars 1.1 million in seed funding he received from

NBCi CEO Chris Kitze, as well as three Northern California VC firms

(Osprey Ventures, Montreux Equity Partners and Mondful Partners).



Not surprisingly, hi-tech pioneer Kitze is bullish on his partner’s

prospects.



’I think the market is big enough that all of these companies are going

to do well,’ he says. ’Being solely focused on the Internet, Internet

Wire isn’t dragging along all of the extra baggage that the others

have.’





Spinning plates



Nonetheless, Terpin still has his hands full: ’I sometimes feel like one

of those circus performers that keeps dozens of plates spinning, running

from one end of the stage to the next, keeping everything in motion

before piling on yet another plate.’



But with IPO specialists Sequoia Capital and Hummer Winblad Partners

among the VC firms banking on Internet Wire’s vision of the future, it

may be just a matter of time before the company goes public.



Of course, not everyone sees things Terpin’s way. Business Wire SVP

Michael Lissauer says there’s no question the Internet will have a

profound impact on the delivery of news. ’But it has not, and will not,

supersede satellite transmission in the foreseeable future,’ he

claims.



Adds PR Newswire SVP David Armon, ’PR Newswire’s reach on the Web is

double, if not triple, that of Internet Wire.’



Terpin disagrees: ’We have the largest direct distribution to media via

the Internet.’ Internet Wire claims a database of 26,500 journalists,

while PR Newswire touts nearly 30,000 subscribers to its two online

services - PRN Pressroom and NEWSdesk. Business Wire, meanwhile, says

between 8,000 and 12,000 journalists receive direct online distribution,

not counting the 7,200 registered for its Newstream.com service.



Regardless of what his competitors think of him, Terpin is developing a

loyal following. ’If there’s anyone out there that can take on Business

Wire and PR Newswire,’ says Annie VanBebber, CEO at Dedication Channel,

’I’d say it would have to be Mike Terpin.’





MICHAEL TERPIN - Co-Founder, Chairman and CEO Internet Wire



1984-87: President, Avatar Communications, San Bernadino, CA



1987: President, Canyon Studios PR



1990: Co-founds The Terpin Group



1999: Launches Internet Wire.



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