June 14, 2012 / 2:45 PM / in 7 years

New products to more than double revenue at MyHeritage

* MyHeritage has 63 mln users and 1 bln profiles

* To raise more money to process newspapers, census records

By Tova Cohen

TEL AVIV, June 14 (Reuters) - Family networking and genealogy site MyHeritage expects revenue to more than double this year and in 2013 due to new product lines that help people delve into their ancestry and connect with long-lost relatives.

The website, which was initially based on one product line of family tree subscriptions, has more than 63 million users. The number of profiles on its 23 million family trees this week surpassed 1 billion.

“This is a great achievement for any social network and unprecedented for an Israeli web consumer company,” Gilad Japhet, founder and CEO of MyHeritage, said in an interview with Reuters.

In November, revenue started growing faster due to a second product line - data subscriptions - following the company’s acquisition of WorldVitalRecords and FamilyLink in Utah. In February, MyHeritage opened a third product line of DNA kits, and in July it will introduce record-matching technology.

“Hence we expect revenues this year and next year to continue growing at year-over-year rates above 100 percent,” Japhet said.

One of the company’s main competitors is family-history research website Ancestry.com, which unlike MyHeritage, is not a social network. MyHeritage says its churn rate is only 1.22 percent compared with 3.6 percent at Ancestry.com.

While MyHeritage’s basic service is free, it offers premium features such as access to historical services for a fee. Japhet said the number of paying subscribers at the end of the first quarter was 2.6 times higher than a year earlier.

Though Japhet would not disclose annual revenue, he said it was in eight figures, and in terms of profitability the company is at break even.

“As more content is uploaded to MyHeritage by our users around the world, they discover more family connections and relevant historical documents,” Japhet said.

“Family history is like detective work, piecing together names and facts and dates. The holy grail is to add flesh to a family history, adding colour. This will be our focus in coming years.”

MyHeritage has acquired seven companies, four in Europe and three in the United States.

The company has raised $24 million and it main investors are Accel Partner and Index Ventures, firms that also invested in Facebook and Skype. Japhet said MyHeritage is likely to raise money soon as it will need funds to process newspapers, census records and other documents that have never been online.

The record-matching technology to be unveiled in July compares the profiles on the family trees with historical records to find matches automatically.

“It can find the will of your great-grandfather and it can find your grandmother in a yearbook,” said Japhet.

To ensure privacy, MyHeritage does not disclose information on living people and collaboration on family tree research is by invitation only.

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