Entrepreneurs Move Into Pet Info Space

CHICAGO Thu Oct 2, 2008 1:53pm EDT

A 5-year-old Labrador-greyhound mix named Bambi beats the heat July 13, 2003, by charging sprinklers in a dog run at Centennial Hills Park in Las Vegas, Nevada. REUTERS/Ethan Miller

A 5-year-old Labrador-greyhound mix named Bambi beats the heat July 13, 2003, by charging sprinklers in a dog run at Centennial Hills Park in Las Vegas, Nevada.

Credit: Reuters/Ethan Miller

CHICAGO (Reuters.com) - Consumer spending may be slowing down but people are still indulging their pets and businesses are moving in to fill the fast-growing niche.

The pet industry is generating more than $40 billion in yearly sales of everything from natural foods to doggie daycare. Among the latest trends is the evolution of pet information Web sites. Retailers such as Petsmart have already recognized the marketing value of including tips on pet health as part of their Internet presence. Last November, Iams pet food parent Procter & Gamble Co. and NBC Universal teamed up to launch a portal for pet lovers in Petside.com.

"A lot of competition seems to have entered the space right at the same moment," says Nick Solaro, co-founder of San Francisco-based Petwave, a pet information provider whose beta site launched in April. "It seems that everyone had the eureka moment."

A host of start-ups is tapping into a need for content related to the care of animal companions. Events such as last year's recall of tainted pet food from China have heightened consumer awareness over issues such as product safety.

"(Consumers) were not able to find a trusted source regarding the health and well-being of pets on line," says Hope Schultz, president and co-founder of New York-based WebVet ( www.webvet.com ), which is building an informational site for owners of dogs, cats, birds and small pets.

Schultz, a former advertising executive, says WebVet is modeled on WebMD, which amasses health information for humans. WebVet contracts a team of medical writers to produce its editorial content, which she said is reviewed by veterinary experts. The site also has a partnership with drug company Pfizer Inc., whose animal health division provides access to research and veterinary specialists.

WebVet, which is seeking its second round of angel funding, aims to build revenue through advertising, sponsorships and syndication of its content. Advertising revenue is projected to exceed $1 million in 2009.

CROWDED DOG PARK

As is often the case with Internet start-ups, speed to market is critical; in recent months, rivals in the pet information space have moved to carve out their niche. They include beta sites with names such as Petdoc (www.petdoc.com), which bills itself as "the definitive online network for pet health and care information, and PetMD (www.PEtMD.com), "the pet health authority," among others.

Solaro's Petwave is attempting to stand out with health-related content it pulls together from animal advocacy groups such as the ASPCA and the Canadian Veterinary Medical Association. Just for fun, there are links to amusing pet videos from YouTube. Already Petwave has secured advertisements from flea repellant Frontline and pet food maker Science Diet, among others.

"We really want it to be a health resource," says Solaro, who previously worked for a venture capital firm and has raised seed money from angels, friends and family. "We are basically creating a layman's focused pet health encyclopedia."

Aside from the increasing number of Web sites offering doggy dogma, the pet equivalents of social networking spaces modeled on Facebook are emerging. Perhaps the most well-known is Dogster (http:www.dogster.com), where canine lovers can network and trade information, pictures, stories and best practices about their furry friends.

"It just started with sharing photos and bios of pets," says Dogster founder and self-described "top dog" Ted Rheingold, a former Web developer who launched the site in 2004 . "We started with community - people could have meet-ups and things like that."

The site now has some 750,000 registered users and a feline equivalent called Catster. Its business model has evolved to include advertising and paid subscriptions of $20 per year, which give users enhanced features, virtual currency and other benefits.

If growth in pet ownership and related products is any indication, demand for pet information should remain healthy. According to the American Pet Products Association, a trade group, total U.S. expenditures in the pet industry are expected to reach $43.4 billion this year, up steadily from $32.4 billion in 2003. Some 7.1 million households, or 63 percent, already own a pet.

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