Article Excerpt:
TWST: What is j2 Global Communications?Mr. Turicchi: j2 Global Communications provides Internet-based messaging and communications services to millions of customers worldwide. The company offers a variety of services, including fax, voicemail, email, unified messaging, document management and Web-based conference calling. j2 Global currently has four flagship services. The first is eFax, a fax-to-email service that comes in a variety of configurations for individual businesspeople and corporate enterprises. Our second flagship offering is jConnect, a unified-messaging service; the third is Onebox, a robust service that incorporates live voice features such as 'find me/follow me.' Finally, j2 Global has an email business, which is branded Electric Mail. We target business users. The primary sweet spot for us is the small to mid-sized business market, although our customer base ranges from individuals all the way up through large enterprises. We were founded 10 years ago by a German rock musician and his business partner. The first five years were really spent building the company's presence. Most of the marketing historically has been done online. We also have a network today that covers 2,000 cities in 26 countries. So a lot of the early stage development was putting the network in place, building the brands and building a customer base to get the company from that startup phase to profitability. The next five years, from 2001 to the present, has been scaling the company, taking it from what was breakeven status in the middle of 2001 to first profitability. Then, as we've added more customers and increased the revenue per user, j2 Global has shown not only top-line growth, but gross margin growth as well as operating income growth.
TWST: What's the agenda at this point? What would make the next 12
months a success?
Mr. Turicchi: We've launched a number of major initiatives over the last
12 months, which are in various stages of development. Our goal is to
execute against those major initiatives. The core goal of the company is
to continue to grow rapidly at a profitable pace. We've given an initial
outlook for 2006. We think our top and bottom line will grow around 30%
over our 2005 results. We plan to achieve these goals by leveraging four
areas. One is selling our existing set of services globally. We think
of North America as our backyard, our home territory; about 92% of our
revenues comes from North America. But in the last year and a half,
we've begun to emphasize international sales, particularly in Western
Europe. We are focused currently on the United Kingdom, Germany, France
and Spain, and other countries where those primary languages are spoken.
Throughout 2005, j2 Global tested a number of marketing strategies and
marketing partner relationships. The goal for 2006 would be to expand
upon those, both in terms of the breadth, but also the dollars we put
behind it. The second piece that is relatively new for us is extending
the reach of our customer base to include large enterprises. As I
mentioned, our sweet spot historically has been an individual, small
business, mid-sized company user, anyone who'd take a single phone
number up to a couple of hundred phone numbers. About two years ago, we
started to stretch that customer base up to the Fortune 1000.
Unfortunately, we can't generally disclose the names of the customers,
but they are household, well-known names. We've built a sales force that
is relatively modest in size today ' it's 13 reps, mostly in the United
States. That is expanding as we speak, because we now feel comfortable
that we have established the value proposition as well as a substantial
pipeline of potential opportunities there. So now we need more people on
the ground approaching these Fortune 1000 companies. Here the deployment
can be in the hundreds of phone numbers per account up to the thousands.
Our current largest customer today is 10,000 deployed phone numbers.
And the last piece is really in the area of new service offerings. As I
mentioned at the beginning of the interview, most of our offerings today
are in the messaging space. We have been extending the suite of services
into the voice area, specifically voicemail and voice messaging. We
launched the eVoice brand a year and a half ago, had it out as a beta
test, and the second quarter of 2005 began selling the first voicemail
service under the new brand. That's a product that continues to evolve,
continues to be developed. We also have some voice features in our
Onebox platform, j2 Global's unified communications offering. We are
also evolving that suite of services. So those are really our major
goals for 2006 ' execute well in the core marketplace, extend the
distribution of these products into additional non-US based markets and
then develop these new services and put marketing dollars behind them.
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