Women’s online network, Glam, fastest growing on the Web

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We finally “get” Glam, the network of Web sites for women’s fashion and lifestyle.

Last month, VentureBeat was incredulous when venture capitalists invested in the company at a value of $150 million. Glam is just another new media company, dependent on ads. How could an upstart team of 40 employees produce that sort of value?

The company has just demonstrated why. It is the fast growing of the country’s top 500 web sites, according to Comscore Media Metrix numbers just published — and shared with VentureBeat by chief executive Samir Arora (pictured here) during an interview Monday.

Glam enters 2007 with impressive momentum: Hip social networking company, Facebook, was No. 1 fastest-growing site in 2006 — until December — when Glam doubled its uniques in a single month and blew past Facebook at the last minute. Glam now has more than 8 million U.S. unique visitors per month. Glam overtakes Disney’s women network and CondeNast’s network, jumping to second largest women’s web property, behind only iVillage. (See data below.) Glam has more than 16 million global visitors, Arora says.

Not bad for a company conceived started four years ago in Arora’s Haight-Ashbury Victorian in SF.

There’s a slight caveat. For its traffic, Glam counts visitors to more than 200 partner and affiliate sites, which Glam doesn’t own, but delivers advertising too. On the one hand, these sites could choose to leave Glam if they get large enough. However, they are less likely to do so than VentureBeat originally suspected. Glam has solid relationships with these sites, having spent three years piecing them together. Glam typically contracts with them for two to five years, and Glam requires an exclusive on all prime advertising, in return guaranteeing a minimum payment to the partners. Glam is thus very much in control of the advertising, and so likely to be making a good cut — though it doesn’t disclose exactly how much. He likens the structure to a TV network, where NBC sells advertising for its affiliates, but gets content from them.

Even if the cut with partners isn’t particularly high, Glam would make up for it through its very high banner ad rate for advertisers, which is $12 to $20 per thousand views of a site (CPM). The rates on Glam’s fully-owned sites are $20-$35 for every 1,000 page views — a huge premium over most Web sites get. The reason, says Arora, is because advertisers want to reach women, who have been underserved by Web sites until recently. For email, advertorials and other features, the rate is $50 to $120, he says.

Women are finally catching up online, and the market is rewarding the players embracing them. The Knot was among the top ten Internet stock growers last year (126 percent increase).

Also, Arora points to comparable companies to justify his company’s relatively high value. Leader iVillage traded in 2005 in the $600-700 million market value range, before being acquired by NBC for over $600 Million plus earn outs. Over the course of 2006, as Internet companies became more valuable, iVillage’s value became an estimated $800 million. Other comparables suggest Glam is fairly valued relative to Daily Candy and IGN, a men’s site comparable to Glam, and which was acquired by Fox for $600 million.

Going forward, Arora says Glam plans to use its base in Silicon Valley (it also has an office in New York) to maintain its tech advantage over its competitors — pushing more video and TV content this year. Arora is a great salesman. Closing our hour-long interview, he says the company is headed to 20 million uniques globally. With the market valuing these sorts of companies (iVillage, IGN, etc) at 25 to 32 times unique users, he says Glam’s value is headed to $500 million! And we left believing him.