Today (Friday, March 5th) a new TV series will air that just might cause more people to wonder about their family history.
The stock tie in is with a relatively recent IPO named Ancestry.com (NASDAQ: ACOM – $17) which is the leading online source for individuals and families to build their history and discover information about their ancestors.
Although we didn’t publish a research report on the company with their IPO we have done some preliminary work and came away with a few observations:
1. People pay a nice fee for this service, from $20 to $30 per month. (They offer discounts for annual or quarterly payments.) So this is something that people place a fairly high value on considering this can easily amount to a couple hundred dollars a year.
2. Although Ancestry.com is in part a user-driven story they have a whole other aspect which is the fact that they have obtained licenses (in many cases exclusive) to archival and historical content that is then available online to paying subscribers.
3. There’s a definite strong pull at work in driving this phenomenon which is hard to fully appreciate until one experiences it. For example if you dabble enough on it and discover that your great-great-great-great grandfather was awarded a medal for bravery by a king somewhere and there is a picture of it in one of the archives, tell me you wouldn’t pay to get it!
4. Beyond the documentation and knowledge aspects of the application the ability to discover and link to other living relatives from more diverse branches of your family history can also be profound.
We noted that during the IPO the CEO of the company is a *great* salesman for the story and certainly helped the IPO to be a success.
But as we dug into the story we found more compelling things to like about it. Could Ancestry.com be the “google of the personal and family historical information” segment? It appears that way. Ancestry is actively working to digitize these historical archives and records which are now sitting in boxes and files in small towns all over the world.
The content may not seem “valuable” in aggregate from a business standpoint but from a personal and human angle this is compelling stuff and Ancestry.com clearly has a model to offer investors a way to play it.
[Disclosure: The author has a small position in Ancestry.com]
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