A Talk with the CEO of The Generations Network

It has been a busy 24 hours. While rumors have existed for years, last night a new rumor spread like wildfire that The Generations Network was about to be acquired by another company.

Early this morning, The Generations Network issued a press release describing its acquisition by Spectrum Equity Investors, a private equity firm. The announcement was posted on this newsletter within minutes at http://blog.eogn.com/eastmans_online_genealogy/2007/10/follow-up-ances.html. Lots of comments and e-mail messages followed immediately.

NOTE: The Generations Network is the parent company of Ancestry.com, MyFamily.com, RootsWeb.com, and a number of other web sites. It also produces the very popular Family Tree Maker genealogy program for Windows systems.

In mid-day, I had a chance to talk at length on the phone with Tim Sullivan, President and Chief Executive Officer of The Generations Network. He gave a lot of details about the acquisition and shared his vision for the future. I am indebted to Tim for taking the time to talk with me on what must have been a very busy day for him.

Of course, any time you talk with a CEO of a multi-million dollar firm a few hours after an acquisition has been announced, you can expect that CEO will use all sorts of words and phrases, such as "full value for the stockholders," a "great opportunity for the employees" and all that. Indeed, Tim did use many of those words. However, I was also struck by his bluntness and sincerity.

I don't know Tim well but have met him a few times. I do know him well enough to realize that he says whatever is on his mind. It was obvious during our telephone conversation today that this was no rehearsed speech; he was simply saying what he sincerely believes. I was impressed by his straightforward, even blunt, statements. He openly referred to past mistakes as well as to past successes. He described the changes being made and the plans to reduce the mistakes and to expand the company's offerings, now that financial resources are available. In short, I was impressed.

Tim started the conversation by repeating the major points he had made at a meeting of all employees an hour or two earlier. He stated that he hoped to deliver the same message to the genealogy community. I cannot write as fast as Tim talks, so I cannot offer word-for-word quotes of everything he said. However, I think the following is very close to his words.

First, he emphasized that the acquisition by Spectrum Equity Investors is a good thing.  He believes it is an immediate gain for the company as well as an immediate gain for the employees. It will take a few months, but he believes that the company's customers and others in the genealogy community will also see benefits within a very few months. In fact, several times he stated:

"Spectrum Equity Investors is putting their money where their heart is and is backing what we do. There will be no major changes in what we are doing. Spectrum likes what we are doing and also likes our plans and performance. Spectrum thinks this is a good thing for the community."

It is obvious that Tim also thinks this is a good thing. He emphasized, "There will be no major changes in how the company is operated." At another time he stated, "The Generations Network remains as an independent company serving the same community as we always have." He also stated several times that "our employees are the biggest asset of this corporation."

I asked about the wisdom of a private equity firm taking a controlling interest in the company. Given that Spectrum Equity Investors does not have a lot of experience in genealogy, what could they offer besides money? Tim spent some time explaining that Spectrum Equity Investors is very well connected everywhere. They have contacts and business relationships in Silicon Valley, Salt Lake City, Japan, Europe, and many other places. They are excellent at introducing companies with complementary interests, then stepping back and letting those companies work together to develop products and services that no one company could produce alone. In short, they create a place where synergy exists. ("Synergy" is my word, not Tim's.)

Tim also pointed out that this was not an acquisition performed in desperation. In fact, The Generations Network has been solidly profitable for some time. There were no financial problems staring them in the face, other than the fact that there wasn't enough money to do everything they wanted. With more financing now in place, The Generations Network can grow much faster than was possible before.

I then dove into the details of the acquisition and asked about the future of various products, including RootsWeb, the free online service that is financially supported by The Generations Network. Tim instantly replied, "We will strongly support RootsWeb." He then quickly expanded the conversation to include other, non-profit and for-profit organizations that are not directly associated with The Generations Network. He started first by describing the present and future relationship with the Church of Jesus Christ of Latter-day Saints. He said, "Their efforts and ours are not inconsistent with each other."

He also expanded a bit on the disconnect (that's my word, not his) some months ago between The Generations Network and the Mormon Church. He stated that there were many unfounded rumors floating around at the time, all pointing fingers at one group or another. He reported that almost all the rumors he heard were at least partially inaccurate. However, he deliberately did not comment on them at the time, and he asked his staff to also not comment. The reason is that he and the Board of Directors were in negotiation at that time with Spectrum Equity Investors and there are strict Federal laws concerning what senior executives may or may not say about their company while in negotiation. In particular, there are stringent, although not always clear-cut, prohibitions about making forward-sounding statements. The Federal Government could easily interpret such statements as an attempt to make the company look better than what it really is, a violation of Federal laws.

Tim found that he didn't always know just what he could or could not say. He elected to take a very conservative approach at that time and say nothing. While that may have been difficult at times for him and for his staff, he knew that they would remain legal.

Again referring to FamilySearch and the Church of Jesus Christ of Latter-day Saints, he stated, "We support what they do." I didn't have time to write down his exact words that followed, but he basically said that, given the breadth of activities of both organizations, there are bound to be occasional overlaps of interest and occasional disagreements. As the two largest players in the genealogy community, he fully expects that the two organizations will "obviously bump into each other" from time to time. However, he sees such overlaps of interest as a time for discussion and compromise amongst friends. He doesn't expect to be perfectly happy with every outcome but does believe there is room for friends to complement each other's offerings in the community.

Tim did state at one point, "With more capital available, The Generations Network is now in a better position to work with and to supplement [the work of] the Mormon Church, and others."

Tim stated that one motto he has heard often is one that firmly believes in: "Do well by doing good." He also clearly stated, "Hopefully, with more capital available, The Generations Network can now work with and supplement the work of the LDS Church and others."

I pressed Tim again about the future of RootsWeb. He stated that all the recent reports from Media Metrix (a leading independent firm that measures the popularity of web sites) show that RootsWeb receives roughly the same number of visits as Ancestry.com. Each person who visits a RootsWeb.com page also sees an advertisement for Ancestry.com. Given the (relatively) low expense of providing those web pages, RootsWeb is one of the lower cost and more effective advertising methods the company has. He believes it would be foolish for his company to reduce its support of RootsWeb. Replacing that advertising value alone would be expensive, and there are numerous other benefits as well.

I decided to be a bit more blunt and asked about a couple of recent products that have not been well received in the marketplace. He quickly stated "We goofed on the 'Internet Biographical Collection.'" The product was introduced without sufficient pre-release feedback from the genealogy community. He pointed out that an acquisition by another company and having more financial reserves available would not automatically prevent such issues from repeating themselves. However, additional resources would have allowed for better beta testing, more feedback, and more marketplace analysis. He bluntly stated that not enough study was done on this product before launch. He also stated, "We think we have learned from our recent mistakes."

He also stated that he plans to make sure The Generations Network still continues to introduce new products and services that will leverage the company's strengths and add more power to their customers' time spent online. The one change that he promised is that the company will spend a lot more effort making sure that future offerings will coincide with what the genealogy community wants and appreciates.

One thing that Tim Sullivan stated still echoes in my brain:

"There will be very few changes in how we run the business, and now one of the largest private equity firms in the world is enthusiastic about what we do."

Near the end of our conversation, Tim stated, "I plan to stay here for a long time." I believe him. He certainly sounds like a man who is here for the long haul.

Will this new marriage be perfect and will the two partners "live happily ever after?" My belief is that this is not a fairy tale, and nothing is ever perfect. Their lives together will have a few twists and turns and moments of stress, like any other marriage. Still, at this wedding the two partners do appear to be well suited for each other. I believe that each partner will be better off in this marriage than either would have been alone.

I also suspect the customers will benefit as well.

Comments

[Guy with a cold]

"It also produces the very popular Family Tree Maker genealogy program for Windows systems."

Cough.

[theKiwi]

popular != good

:-)

[Cynical Cindy]

In the meantime, subscribers to anything they own sit and wonder if we've put our money down a rat-hole.
This parent company changes faster than I change my knickers..no wonder they are mistrusted.
What will they dump? What will they keep? What will they acquire?
OGK!

[Penny]

"What will they dump? What will they keep? What will they acquire?"

Good questions. And what's it going to cost the individual subscriber to stay with 'em?

[Dee]

Having been caught in the middle of so many changes, many in mid-subscription, I am worried. My subscription is up soon, and I'm thinking of passing this time around until I see what direction Ancestry goes in THIS time. Many of us are looking for more images of historical documents, NOT just another "social networking" family tree site.

Price becomes a major issue when you think you are paying for good, solid historical information, and the company drops the ball on that side, while chasing after people who post trees as a passing fancy.

[Nancy]

Why so negative? I am certainly old enough to be a pessimist, but I try for optimism. I truly enjoy my subscription to Ancestry.com and am happy to see them flourish. I use their site strictly for research and find that it saves me money in the long run. No, everything isn’t there yet, but I find more every month. The amount of primary documents now available from home is astounding! Now I only need to go to The Family History Library in Salt Lake City once a year. I think they are, and will continue, to try to provide the services we want as that is how they will remain profitable. I wish them well in this new venture.

[Jeff]

Dick, thanks for the great service you provide. Catching up with the CEO the day of the announcement is quite a feat. Without your daily reports in the fast-changing world of genealogy, I'd really be in the dark.

[Marlene]

The announcement of the sale of the Generations Network certainly explains the premature release of Family TreeMaker 2008. I see the potential for the new release, but there are so many features that were omitted and its flaws are scary. I teach FTM classes and I will continue teaching FTM 16 for the time being. FTM 2008 is too unstable and I will not give up the book and reporting features! I hope that the new owners will expidite repairs and restoration of features, but I fear that this will not be their priority.

[Insanitree]

Hi, all, you also can see an interview on the Genealogy Insider at http://www.familytreemagazine.com/insider/Interview+With+Ancestrycoms+CEO+Tim+Sullivan.aspx

[Jeff Davis]

Dear Dick, we live about 2 miles from the MyFamily Building in Provo. What really concerns us, and I think it is well worth an article by yourself, is the price of subscription to Ancestry.com

Now they have new owners, and the new competition is really doing well, like Footnote, Genealogy Bank, etc; Is Ancestry going to keep their high price of $299 for full membership? I know from time to time they have discounted memberships. Can you tell us about them.

With the new competition and the LDS Church in Competition do you think the shareholders got out when the going was good?

Jeff

[Dick Eastman]

---> Is Ancestry going to keep their high price of $299 for full membership?

I don't know. My crystal ball is a bit cloudy on this subject. But it certainly is possible that the company will drop their prices, the same as several of their competitors have done recently (Footnote.com pops to mind, Ancestry.com's own data CD-ROM disks now sell at lower prices than they used to, Family Tree Maker is now available at a lower price than it used to sell for, The Master Genealogist Gold Edition dropped from $99 to $59, the LDS Family History Department lowered the price of Personal Ancestral File from $35.00 to zero several years ago,etc.).

I am not saying that they WILL drop their prices, but it certainly is a possibility. The trend in the industry seems to be trending to lower prices.

---> With the new competition and the LDS Church in Competition do you think the shareholders got out when the going was good?

Who knows?

I do know that competition is a good thing in almost every industry and marketplace I can think of. Whether the shareholders liked it or not, competition is a great thing in the genealogy marketplace. The genealogy consumers certainly benefit from competition.

- Dick Eastman

[Carlos Ruth]

My genealogical society is looking to book a speaker next spring to discuss Family Tree Maker 2008; Tana Pedersen Lord, author of the Official Guide to FTM 2008, would do nicely. Can you tell me how to get in contact with her or suggets a couple of good genealogy speaker's bureaus?

I know this is a bit off topic but this is as close to the topic as I'm likely to get.

Thanks for any help.

[Margaret Rutledge]

This sounds like good news. An infusion of capital will allow Ancestry to expand its online databases at an accelerated rate. I marvel what I can do on it compared at night in the comfort of my own home compared to what my grandmother and great-aunts had to do. They'd stare at microfilm, guessing at the geographic locations while I can do complex searches. I traced lines of descent for their uncles that they spent years trying to find. Hooray for this company.

[Tom Wilson]

I see no change in the "take from Peter and make Paul pay for it" approach Ancestry has used for years. By the way, Peter, in this analogy, never got any break in terms of having access to what the middle man (Ancestry) managed to collect. Peter would even have to pay a fee to see "his stuff" on Ancestry. Once you "passed your material over the wall" to Ancestry, it was theirs. You were not even allowed to make corrections. I am one "Peter" who is planning on waiting to see what exactly shakes out from this buy out.

[Bonnie Schneiderman]

I am looking forward to any changes that should come about in this MARRIAGE. It will be interesting for sure. My main wish is that there was more info on States like New York and Vermont. I also like this website, Dick...keep up the fantastic work, okay? What problems is everyone having with FTM 2008?

[Glen F. Pritchett]

For Bonnie Schneiderman - Here's just one link to what people are saying about FTM 2008.

http://blog.eogn.com/eastmans_online_genealogy/2007/10/family-tree-mak.html#comments

It would seem only a few people have confidence in this version.

[Bob Martell]

Good interview with the CEO but I gagged at the 'Very popular Family Tree Maker program'comment . Version 16 is where I stopped with this company.
What really blows my mind is that no one had the courage to admit to this FTM 2008 fiasco!
Let's just sell the company and blame it on "those guys". I remember someone else who washed his hands to avoid taking blame!

[Dick Eastman]

---> but I gagged at the 'Very popular Family Tree Maker program'comment .

Family Tree Maker has been the best selling genealogy program for years. I haven't seen any recent numbers but I suspect it is still the best selling or "most popular."

Family Tree Maker has never been THE BEST genealogy program but it has been the most popular for years. The two terms are not the same. I believe the article I wrote is correct: "... also produces the very popular Family Tree Maker genealogy program for Windows systems."

- Dick Eastman

[Dino (All Dino, All the Time)]

Dick,

I agree that FTM has never been "The Best" but is "The Most Popular." I think that we will have to wait to see how FTM 2009 sells. We know that there are a bunch of people who bought 2008 that won't be fooled again. So after the dust settles, we'll see (if there are any reliable sales figures to be had.)

[Bob Martell]

I would like to see your fiqures that support your statement Dick.
Since the fiasco I have gone and googled (Yes googled) "best genealogy programs" to choose a replacement program for my Martell files and get Legacy as no 1 not family tree maker. If I google "most popular genealogy programs" then I get 1.- Rootsmagic v3.0 2.- Legacy v6.0 3.- The Master Genealogist v6.0 4.- Genbox v 3.63 5.- Family Tree Legends v5.0 6.- Family Tree Maker (2006) v5.0 (Hardly the most popular Dick) A good reporter check his facts before he/she contradicts critics. Regarding FTM 2008. A lot of us also know a little about genealogy and programs. Too bad the makers of Family Tree Maker didn't ask the questions before putting out this great money maker. PS I finally got credit for this worthless Beta program after returning it (and the book). I sure would like to see someone step up (someone like you) and confront this problem with the CEO or the ones responsible for this fiasco.

[Beryl Blickstein]

The biggest fiasco was the premature release and almost immediate withdrawal of FTM 2008 Service pack 2, which was supposed to solve many of the horrible performance problems and provide some of the reports and other features missing from the original release. Does TGn even have a Quality assurance group? what kind of process do they follow to convince themselves that a product release is ready fro prime time? Are they simply being pushed to prematurely release new software by the parent company? If not, are there any responsible individuals in the FTm software development group with professional and technical integrity?