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ITRA (5.72) Intraware enters new playing field: Orinda firm hopes Web site draws sports fans to bolster revenue from popular SubscribeNet product [Contra Costa Times, Walnut Creek, Calif.]

Friday, December 28 2007 8:12 AM, EST Knight Ridder/Tribune "Business News "
Dec. 28 --ORINDA -- Intraware Inc. wants to do for sports what Facebook did for the world of colleges and universities.
ZAthlete.com, the software company's new Web site, is designed to create a digital community for people interested in recreational or competitive sports. Anyone who is an athlete or is actively interested in sports is a target audience of the company's online site.
Orinda-based Intraware hopes that if the Internet site, which also is an interactive forum, takes off, zAthlete.com could bolster the company's sales and profits.
The Web site also allows individuals and teams to build Web pages about themselves and their teams. It is a way to fashion sports-oriented networks. People also can share information and statistics, videos, such as team highlights, and photos. All the information can be shared with team members, friends and fans.
"We expect heavy growth in revenue on this in our next year," said Peter Jackson, chief executive officer and founder of Intraware.
One big source of revenue would be from suppliers of sports gear such as Easton-Bell Sports Inc. ; Hillerich & Bradsby Co. , maker of the Louisville Slugger baseball bat; Speedo and Nike.
"We have some significant meetings coming up with manufacturers," Jackson said. "They want to have a deep branding experience with people who are actual users of their products. They see our site as a way to talk to top performance athletes that they can get to right away."
Intraware, which went
public with a white-hot initial public offering in 1999, has depended on its SubscribeNet product as its bread and butter. The system allows technology companies to deliver, track and manage their software. The platform also allows companies to handle software licenses and other digital content that they distribute to their customers.
Although SubscribeNet is a proven product, it is not necessarily a system that will produce gigantic sales, primarily because of the market it serves.
"Enterprise software is a $100 million market for us," Jackson said. "We do business with all the big software companies -- Oracle, SAP, EMC. But the enterprise software world is becoming a market with fewer and fewer companies."
The field appears much more fertile with the zAthlete.com system.
"We think zAthlete is in a billion-dollar marketplace," Jackson said.
As a result, Intraware intends to focus the SubscribeNet core technology on the variety of services and features that the company believes zAthlete can deliver.
"We can take a lot of the SubscribeNet expertise and utilize it for consumers who use zAthlete," Jackson said.
Several industry insiders who have looked at the zAthlete site like what they see.
"This is a sports Facebook," said Rob Enderle, a Silicon Valley market researcher and principal executive with Enderle Research .
The online social networks that capture plenty of traffic, such as MySpace and Facebook, tend to have a broad appeal but very little specialization. That leaves the field open for specialized Web communities, said Tim Bajarin, a Silicon Valley analyst and head of Creative Strategies Inc.
"One of the trends in 2008 will be what we call vertical social networks," Bajarin said in an e-mail. "We believe the next big thing in social networking are sites that are more targeted at people of like minds. Something like zAthlete is a good example of this trend."
Enderle added, "People like to get involved in groups that have people who are like them."
Intraware's CEO appears to have tapped into a market segment that could take off in a big way, said Chuck Esserman, managing director with TSG Consumer Partners , a San Francisco -based firm that invests in consumer-oriented companies.
"Peter Jackson is creating a community for these athletes to come together," Esserman said. "There is a tremendous underlying demographic where kids are increasingly becoming more involved in sports. Athletic endeavors have become more serious for children and teens, as well as their parents."
Chris Clapinski, a zAthlete member, said he likes the Web site and believes he can navigate easily around the online network.
"As an ex-professional baseball player, it allows me to stay in touch with those players with whom I competed and to see the progress of their family lives," Clapinski said in a news release.
Now, the company's sports venture could propel it beyond the ranks of merely being a survivor of the dot-com debacle. It could help the company take a dramatic leap beyond its typical sales and profit plateau. Intraware never has turned an annual profit. But it did manage a three-month profit of $14,000 in the second quarter ended in August.
"This network creates a wider and wider field of people who are connected to each other," Jackson said. "There is constant and growing social communication."
George Avalos covers jobs, economic development, commercial real estate, finance and petroleum. Reach him at 925-977-8477 or [e-mail].
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Copyright (c) 2007, Contra Costa Times, Walnut Creek, Calif.
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